Geopolitically, in the Gaza Strip, Israel continues its ground operations, while Hamas has decided to retaliate. In Turkey, new protests were planned Thursday after the arrest of Istanbul’s mayor, Ekrem Imamoglu. As for the Russia-Ukraine conflict, despite the principle of a ceasefire accepted by both sides, Kyiv bombed a strategic air base in Russia on Thursday, while Moscow continues its drone attacks. Under these conditions, perhaps it is best to stay in cash?
The Swiss National Bank (SNB) continues its monetary easing policy and thus lowered its key interest rate by 25 basis points, bringing it to 0.25% on Thursday. The decision is motivated by weak inflationary pressure and “increased risks of downward revision of inflation,” according to SNB statements. This marks the fifth consecutive cut since Q1 2024. The SNB began gradually lowering its key rate in March last year, from 1.75% to 1.50%. At the last monetary policy decision in December, the central bank surprised markets with a 50-basis-point cut.
The Swiss exception in the markets
In Switzerland, the SMI closed up 0.43%, thanks to stocks like Nestlé and Novartis (+1.6% each). Roche (+0.03%) joined the British lab Oxford BioTherapeutics’ therapeutic antibody discovery platform with an initial payment of $36 million (around 32 million francs).
In Paris, the CAC 40 ended with a -0.95% loss at 8,094.2 points. The British FTSE fell -0.09%, and Germany’s DAX declined -1.18%. The EuroStoxx 50 lost -1.0%, and the FTSEurofirst 300 -0.41%. The Stoxx 600, affected by profit-taking in the banking sector (-1.72%) and industry (-1.03%), ended down -0.43%. The German Bund yield fell 1.8 basis points, to 2.780%. The French 10-year OAT remained stable at 3.472%, as Bercy seeks to raise €5 billion in equity for defense companies. The spread between the Bund and OAT remained unchanged at approximately 70 basis points. The Bank of England unsurprisingly kept its key rate at 4.50% on Thursday. The Monetary Policy Committee voted 8 to 1, with one member preferring a -25 basis point cut. “A gradual and cautious approach is needed regarding further monetary policy easing,” the institution stated.
In the United States, the Dow Jones closed near equilibrium (-0.03%), while the Nasdaq fell -0.33% and the S&P 500 -0.22%. Tesla rose slightly (+0.17%) after recalling over 46,000 Cybertruck pickups, as body panels may fall off due to adhesive failure, the U.S. National Highway Traffic Safety Administration (NHTSA) announced Thursday. In the bond market, the 10-year U.S. Treasury yield remained stable at 4.24% compared to the previous day.
The price of Bitcoin reached a high of $87,453 in early New York trading but quickly fell to $83,655 after U.S. President Donald Trump made a video appearance at the New York Digital Assets Summit. Before the video statement, rumors circulated on X suggesting Trump would announce zero capital gains tax for certain cryptocurrencies or make a favorable statement about the U.S. strategic Bitcoin reserve. Ultimately, his most positive statement was his reaffirmed goal to make the United States a leader in all areas of cryptography.
This morning in Asia
Chinese stocks fell slightly in early trading. Hong Kong’s Hang Seng index dropped -0.68% after a -1% decline on Thursday, as investors became cautious following a tech stock rally and the index hit its highest level in three years on Tuesday. Japan’s Nikkei, however, was up +0.38%, driven by banking stocks.
The U.S. Dollar Index, which measures the dollar against a basket of six currencies, remained stable at 103.84, after rising +0.36% on Thursday. The yen traded at 149.11 per dollar, near last week’s five-month high of 146.545. The yen is up +5% this year on expectations that the Bank of Japan will raise rates again in 2025.
Spot gold fell -0.3% to $3,034.09 per ounce. Silver dropped -0.8%, platinum lost -0.2%, and palladium fell -0.5%.
Copper prices in London edged up today, nearing the psychological $10,000 mark after a report suggested China plans to increase its strategic reserves of key industrial metals, including cobalt, copper, nickel, and lithium, this year. Aluminum rose +0.3%, lead increased +0.1%, zinc gained +0.5%, and tin fell -0.1%, while nickel prices dropped -2.0%.
Chicago wheat fell for the fourth consecutive session, nearing a one-week low, as the market struggles with weakening demand for U.S. cargoes and a stronger dollar. Soybeans gained ground, while corn prices declined.
Brent crude oil futures rose +0.5%, while West Texas Intermediate crude futures increased +0.6%. Both are set to post +2% weekly gains.
