
Are you interested in economic and financial news?
Bank Bonhôte is pleased to welcome you and puts at your disposal its finance experts.
–
USD/CHF | EUR/CHF | SMI | EURO STOXX 50 | DAX 30 | CAC 40 | FTSE 100 | S&P 500 | NASDAQ | NIKKEI | MSCI Emerging Markets | |
---|---|---|---|---|---|---|---|---|---|---|---|
Latest | 0.83 | 0.94 | 12'087.32 | 5'309.74 | 23'499.32 | 7'743.75 | 8'554.80 | 5'659.91 | 17'928.92 | 37'503.33 | 1'138.40 |
Trend | 1 | 3 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
YTD | -8.39% | -0.48% | 4.19% | 8.45% | 18.05% | 4.92% | 4.67% | -3.77% | -7.16% | -5.99% | 5.85% |
(values from the Friday preceding publication)
–
The trade bickering sparked by the Trump administration is still the main factor determining the direction of travel for financial assets. The week began with a further increase in stress levels as the US announced plans to slap tariffs on foreign films and pharmaceuticals. On the positive side, two significant events rekindled investor confidence. The first was the signing of a pragmatic trade agreement between the US and the UK, gesturing an openness to negotiate. Next, bilateral talks between US and Chinese representatives in Switzerland triggered a temporary reduction in tariffs. The US has cut its duties from 145% to 30%, while China has reduced its own from 125% to 10%. But note that the tariff conundrum is unresolved, and the specifics of this initial negotiation phase will be closely examined. Aside from the headline effect, compromises such as this one are being interpreted as the Trump administration’s desire to forge bilateral agreements despite all the tough talk recently. What they do not represent, however, is a genuine shift back towards more liberalised trading.
On the macro front, the US economy is showing some resilience, but the pressures are mounting. The trade deficit soared to a record USD 140.5 billion in March due to direct fallout from its tariff strategy. Watching from the sidelines, the Fed has opted to hold rates within the 4.25-4.50% range as it awaits the next events. Safeguarding a robust job market and growth remain pivotal considerations, but persistently high inflation is making the Fed cautious.
In Europe, Germany’s manufacturing output beat expectations with a 3% increase in March. Exports also gained ground, indicating that businesses are preparing for tougher trading conditions. Internal political tensions also came to the fore last week, as evidenced by the contested appointment of Friedrich Merz as chancellor. This fragility in the ruling coalition could well hinder reform efforts.
–
China has implemented monetary easing measures amid slowing domestic demand, just as the US has been piling on pressure with tariffs. The People’s Bank of China last week cut the benchmark rate as well as the banks’ reserve requirement ratio in an attempt to boost lending. These measures coincided with an 8.1% surge in exports in April, indicating that Chinese companies are adjusting their logistics in response to the trade barriers.
Equity markets, cheered by these signals of rapprochement, eked out a rally towards the end of the week, particularly in the tech sector – buoyed by speculation of looser restrictions arising under the Chip Act. But there are chances that this uptrend is merely a technical rally. Company margins remain under pressure, while political uncertainty from the US is clouding the outlook for the coming months.
In this setting, the S&P 500 and Nasdaq ended the week down by 0.47% and 0.2%, respectively. The Stoxx Europe 600 edged up 0.29%, while the SMI shed 1.36%.
This document is provided for your information only. It has been compiledfrom information collected from sources believed to be reliable and up to date, with no warranty as to its accuracy or completeness.By their very nature, markets and financial products are subject to the risk of substantial losses which may be incompatible with your risk tolerance.Any past performance that may be reflected in this documentis not a reliable indicator of future results.Nothing contained in this document should be construed as professional or investment advice. This document is not an offer to you to sell or a solicitation of an offer to buy any securities or any other financial product of any nature, and the Bank assumes no liability whatsoever in respect of this document.The Bank reserves the right, where necessary, to depart from the opinions expressed in this document, particularly in connection with the management of its clients’ mandates and the management of certain collective investments.The Bank is a Swiss bank subject to regulation and supervision by the Swiss Financial Market Supervisory Authority (FINMA).It is not authorised or supervised by any foreign regulator.Consequently, the publication of this document outside Switzerland, and the sale of certain products to investors resident or domiciled outside Switzerland may be subject to restrictions or prohibitions under foreign law.It is your responsibility to seek information regarding your status in this respect and to comply with all applicable laws and regulations.We strongly advise you to seek independentlegal and financial advice from qualified professional advisers before taking any decision based on the contents of this publication.