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Swiss inflation falls towards zero

Swiss inflation dropped to nearly zero in October, reinforcing expectations the Swiss National Bank (SNB) will keep rates steady, while the Swiss equity market posted little change at the start of the week. European stocks advanced on Monday as euro-area manufacturing stabilised, but US equities were mixed, with technology shares gaining despite a contraction in the US ISM Manufacturing PMI. In Asia, markets traded sharply lower on Tuesday after the Reserve Bank of Australia left rates unchanged and persistent US-China technology tensions weighed on sentiment. Gold was down slightly to start the week, trading just under USD 4000 per ounce, while the US Dollar Index continued to slowly creep higher.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Swiss francs
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Swiss annual inflation moderated to 0.1% in October, down from 0.2% in September, according to Swiss Federal Statistical Office data released on Monday. Consumer prices dropped 0.3% from the previous month, with lower hotel and package holiday costs cited as the main drivers. Core inflation and domestic goods inflation each held at 0.5% on the year, while prices for imported goods fell further into negative territory at -1.3%. The market expects subdued, but positive, inflation to persist, with the SNB likely keeping its policy rate unchanged at zero despite the possibility of short periods of negative inflation. The Swiss Market Index was little changed to start the week, posting a marginal gain of 0.1%.

Euro-area manufacturing steady as output expands

The manufacturing Purchasing Managers' Index (PMI) for the euro area registered 50.0 in October, up from 49.8 in September, indicating stable conditions in the region according to data released on Monday. Output grew for an eighth consecutive month, but new orders remained flat and job losses accelerated, with subdued demand causing ongoing reductions in inventories. Greece (53.5) and Spain (52.1) recorded the strongest improvements, while Germany (49.6) and France (48.8), the largest economies in the euro area, continued to contract, though at a slower pace than previously seen. Most major European equity markets advanced on Monday. The Euro Stoxx 50 rose 0.3%, Germany’s DAX climbed 0.7%, while France’s CAC 40 slipped 0.1%.

Asia stocks fall as US-China tensions persist

Asian markets declined on Tuesday as investors weighed the recent US-China trade truce and ongoing technology export controls, following the Reserve Bank of Australia’s decision to keep interest rates steady at 3.6%. The central bank cited elevated inflation, resilient consumer demand and a rebound in housing prices as reasons for a cautious approach to further monetary easing. Seoul’s Kospi led the losses, sliding 2.4% after a prior period of strong gains, while Japan’s Nikkei 225 dropped 1.6% and Australia’s S&P/ASX 200 fell 0.9%. US President Donald Trump announced Monday that Nvidia’s advanced Blackwell chips would be reserved for US use, highlighting persistent tech tensions despite the tentative trade agreement last week between Trump and Chinese President Xi Jinping. Investors remained wary of lasting resolutions, noting continued disputes on critical issues such as technology, Taiwan, and human rights. Hong Kong’s Hang Seng Index was down 0.8%, with mainland China’s CSI 300 off 1.1%.

US tech shares gain, Dow Jones slips

US equities ended Monday mixed as the Dow Jones Industrial fell 0.5% to 47,333.68 points, while the S&P 500 edged up 0.2% and the Nasdaq 100 climbed 0.4% amid sustained enthusiasm for artificial intelligence. The Nasdaq 100 neared its recent record, boosted by AI-related announcements including a USD 38 billion partnership between OpenAI and Amazon Web Services for access to Nvidia’s hardware, lifting Amazon shares by 4%. Nvidia shares rose 2.2% on Monday after Microsoft announced it had been granted US export licences to supply advanced Nvidia chips, including GB300 GPUs, to the United Arab Emirates (UAE) under tighter technology safeguards. This marks the first such approval under US President Trump’s administration, reflecting a deepening partnership between US technology firms and the UAE as the Gulf nation accelerates its ambitions in artificial intelligence.

US manufacturing contraction accelerates in October

The manufacturing sector in the US contracted for the eighth consecutive month in October, with the ISM Manufacturing PMI falling to 48.7, a decline from 49.1 in September, according to data released on Monday. While new orders, exports, and employment all remained in contraction, some indicators such as backlogs and supplier deliveries improved slightly, but production dropped back into contraction territory after brief growth in September. Input prices rose, though at a slower pace, and inventories fell at an accelerated rate, reflecting persistent economic uncertainty and ongoing tariff pressures. The separate S&P Global US Manufacturing PMI – also released on Monday – increased to 52.5 in October, up from 52.0 in September, contrasting with the ISM's September value and signalling a solid improvement in operating conditions.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from AMD, Amgen, BP, Eaton, Ferrari, Pfizer, and Uber Technologies.

Economic data in focus: ECB President Christine Lagarde speaks (08:40 and 11:00), US trade balance (14:30), Canadian trade balance (14:30), US JOLTS jobs report (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.