Swiss Equities Close in Red Amid Inflation Spotlight

The Swiss Market Index closed 0.11% lower on Monday’s close as investors assess the latest set of inflation reports from major European economies and their potential impact on the rate cut timing.

Inflation in Germany, the eurozone’s biggest economy, stalled at 2.2% year over year in April, slightly below the consensus estimate of 2.3%. On the other hand, the annual harmonized inflation rate inched up to 2.4% from 2.3%.

“Today’s increase in German headline inflation is a good reminder of how difficult the last mile of bringing inflation sustainably back to 2% will be for the European Central Bank. Still, given the ECB communication over the past few months, a rate cut at the June meeting still looks like a done deal,” ING said. “However, looking beyond June, the path for the Bank is anything but clear,” analysts added.

For Switzerland, the inflation figures for April will be released on Thursday, alongside the latest manufacturing PMI and retail sales.

In corporate news, Zurich Insurance Group ZURN recorded an annual decline in its group Swiss solvency test ratio due to its 2023 dividend, a proposed share repurchase, debt redemption and certain acquisition deals. The stock was up 1% at closing.

Roche RO added 0.50% after a European Medicines Agency committee recommended the approval of its multiple sclerosis drug Ocrevus’ subcutaneous formulation. If authorized, Ocrevus is set to be the first and only twice-a-year injection for the autoimmune condition.