SWITZERLAND: KOF Sees 0.3% - 0.6% Negative GDP Impact Of Announced US Tariffs
Aug-01 09:30
The Swiss KOF institute has given a first view on the potential impact of the 39% tariff rate announced overnight by the US administration on Switzerland:
- The "impact would depend largely on whether the pharmaceutical industry, which accounts for by far the largest share of exports to the US, would also be affected by tariffs of a similar magnitude."
- "With reciprocal tariffs of 39% on Swiss goods exports to the US (excluding pharmaceuticals) and 15% on exports from the European Union (EU), as well as a 10% tariff on pharmaceutical products from Switzerland, a significant reduction in gross domestic product (GDP) is to be expected. Depending on the possibility of trade diversion and the time horizon, these would range from 0.3% of GDP to 0.6% of GDP per year. A decline in GDP of at least 0.3% is therefore to be expected."
- KOF acknowledges, however, that the announced tariff rate might be used as a threat scenario, and thus calls for "every effort [to be made] to reach a deal" with the US administration.
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ITALY AUCTION RESULTS: Buyback Results
Jul-02 09:24
The MEF has bought back E5bln of the following BTP//CCTeus:
- E1.25bln of the 3.80% Apr-26 BTP at 101.334.
- E1.00bln of the 1.60% Jun-26 BTP at 99.696.
- E0.89bln of the 3.10% Aug-26 BTP Short Term at 101.188.
- E0.62bln of the 1.25% Dec-26 BTP at 99.074.
- E1.24bln of the 0.50% Apr-26 CCTeu at 100.437.
GREECE T-BILL AUCTION RESULTS: 13-week GTB
Jul-02 09:23
| Type | 13-week GTB |
| Maturity | Oct 3, 2025 |
| Amount | E500mln |
| Target | E500mln |
| Previous | E500mln |
| Avg yield | 1.70% |
| Previous | 1.85% |
| Bid-to-cover | 2.53x |
| Previous | 1.78x |
| Previous date | Apr 29, 2025 |
GILTS: Lower & Steeper, Finding A Base After Solid Demand At Auction
Jul-02 09:21
Gilts trade to fresh session lows before finding some support following solid demand and pricing metrics at this morning’s Mar-28 supply.
- Little of note on the news front since the London open, with the presence of this morning’s gilt and EGB supply, alongside fiscal concerns in both the UK & U.S., providing some pressure.
- Futures as low as 92.98, with yesterday’s opening gap higher closed.
- Bulls remain in technical control.
- Initial support at the 20-day EMA (92.78) untouched.
- Initial resistance located at yesterday’s high (93.76).
- Yields 2-4bp higher, curves biased steeper.
- Major curves pare a little of the Tuesday flattening that followed comments from BoE Governor Bailey, after he flagged the potential for a slowing of QT and suggested that related adjustments would be influenced by the recent steepening of the curve.
- SONIA futures lower and steeper given cues from the long end, last down 0.5-5.0 on the day.
- BoE-dated OIS through year-end is little changed, showing ~54bp of cuts through December.
- With only 4 meetings left in the year, further dovish cues, most likely via a further deterioration in the labour market, are probably required to generate a meaningful extension of the recent dovish move.
- Comments from BoE dovish dissenter Taylor due from 11:30 London (more to follow in due course).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Aug-25 | 4.006 | -21.1 |
Sep-25 | 3.934 | -28.4 |
Nov-25 | 3.759 | -45.8 |
Dec-25 | 3.674 | -54.3 |
Feb-26 | 3.544 | -67.3 |
Mar-26 | 3.509 | -70.8 |
