SWITZERLAND: Gov't Does Not Expect 39% Tariffs To Hit Pharma Sector
A spox for the Federal Department of Economic Affairs has told Reuters that the gov't does not expect the 39% 'reciprocal' tariffs to come into effect from 7 August on Swiss exports to the US to include the pharmaceuticals sector. The 39% rate puts Switzerland among the most heavily-penalised nations worldwide under the 'reciprocal' tariff regime, behind only Brazil (with whom's leader US President Donald Trump is involved in a bitter verbal spat), Syria, Laos and Myanmar.
- This comes after the Federal Council posted on X that the tariffs come despite Switzerland's "very constructive stance", adding that Bern "continues to seek a negotiated solution" and "will analyse the new situation and decide on the next steps."
- The US accounted for 18.6% of total Swiss exports in 2024, with the large majority (60%) of this being pharmacueticals, followed by machinery and metalworking (20%) and watches (8%).
- The expectation of a separate agreement on pharma does not necessarily mean a major reduction in tariffs. Speaking to CNBC earlier in the week, US Commerce Secretary Howard Lutnick said, "Basically, if you are not building your plant in America where we pay for pharmaceuticals, you are going to pay a massive tariff, because why should we pay for your drugs? And you make them overseas and you make your money overseas? At least if we’re going to pay for your drugs, you’re going to build them in America." Lutnick claimed that a plan would be announced within two weeks.
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COMMODITIES: WTI Futures Maintaining a Relatively Softer Tone
WTI futures maintain a softer tone following the reversal from the Jun 23 high. Support to watch is at the 50-day EMA, at $64.64. It has been pierced, a clear break of it would signal scope for a deeper retracement. This would expose $58.87, the May 30 low. On the upside, initial resistance to watch is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range. Key resistance is at $78.40, the Jun 23 high. Gold traded lower last Friday resulting in a breach of the 50-day EMA, and a trendline drawn from the Dec 30 ‘24 low. A clear break of both support points would signal scope for a deeper correction - this would expose $3245.5, the May 29 low. The metal has recovered from Monday’s low and for now, this highlights a possible false trendline break. Stronger gains would refocus attention $3451.3, Jun 16 high. The bear trigger is $3248.7, the Jun 30 low.
- WTI Crude up $0.23 or +0.35% at $65.63
- Natural Gas down $0.03 or -0.79% at $3.388
- Gold spot down $4.02 or -0.12% at $3334.12
- Copper up $1.8 or +0.35% at $511.75
- Silver up $0.13 or +0.37% at $36.1475
- Platinum up $0.88 or +0.06% at $1360.76
EQUITIES: Eurostoxx 50 Futures Holding Onto Bulk of Recent Gains
Trend signals in Eurostoxx 50 futures remain bearish, however, the recovery from the Jun 23 low appears to be a reversal and the contract is holding on to the bulk of its most recent gains. Price has traded through the 20- and 50-day EMAs. A clear break of both averages would strengthen a reversal theme. This would open 5486.00, the May 20 high and bull trigger. On the downside, a breach of 5194.00, the Jun 23 low, would reinstate a bearish theme. The trend condition in S&P E-Minis is unchanged, it remains bullish and the contract has continued to appreciate, this week. Short-term resistance and a bull trigger at 6128.75, the Jun 11 high, has recently been breached. The clear break confirms a resumption of the uptrend that started Apr 7. The 6200.00 handle has been cleared too, this opens 6277.50, the Feb 21 high and bull trigger. Key support is at the 50-day EMA - at 5975.80.
- Japan's NIKKEI closed lower by 223.85 pts or -0.56% at 39762.48 and the TOPIX ended 6.03 pts lower or -0.21% at 2826.04.
- Elsewhere, in China the SHANGHAI closed lower by 2.955 pts or -0.09% at 3454.792 and the HANG SENG ended 149.13 pts higher or +0.62% at 24221.41.
- Across Europe, Germany's DAX trades higher by 81.22 pts or +0.34% at 23753.03, FTSE 100 higher by 17.24 pts or +0.2% at 8802.79, CAC 40 up 66.28 pts or +0.87% at 7728.87 and Euro Stoxx 50 up 26.49 pts or +0.5% at 5308.92.
- Dow Jones mini up 57 pts or +0.13% at 44863, S&P 500 mini up 7.5 pts or +0.12% at 6256, NASDAQ mini up 22.75 pts or +0.1% at 22715.
GILT AUCTION RESULTS: 4.375% Mar-28 Gilt results
| 4.375% Mar-28 Gilt | Previous | |
| Amount | GBP5.00bln | GBP4.75bln |
| Avg yield | 3.847% | 4.062% |
| Bid-to-cover | 3.46x | 3.08x |
| Tail | 0.1bp | 0.3bp |
| Avg price | 101.327 | 100.803 |
| Low price | 101.324 | 100.796 |
| Pre-auction mid | 101.311 | 100.788 |
| Previous date | 04-Jun-25 |
