SWITZERLAND: US-Swiss Trade Deal Would Be Moderate Plus; Limited Impact On SNB
A potential Swiss trade deal with the US should see a moderate upward revision of 2026 GDP forecasts, but is unlikely to sway SNB rates this year or the next.
- "I haven’t said any number [...] we’re going to be working on something to help Switzerland along. We hit Switzerland very hard. We want Switzerland to remain successful" US President Trump added to earlier sources reports, touting a 15% tariff rate to potentially be agreed within two weeks.
- Note that following the US's August 1st 39% tariff announcement on Swiss imports, the Swiss government downwardly revised its 2026 GDP forecast by 0.3pp to 0.9%, while leaving its 2025 forecast of 1.3% intact. Inflation forecasts were materially unchanged following the tariff announcement.
- The SNB meanwhile appeared not overly concerned about the 39% tariff rate, with President Schlegel calling its overall impact "limited" while agreeing the tariffs will tend to dampen economic activity. "Around 4% of Swiss firms will be hit by the US tariffs directly. We are acknowledging that this represents a large challenge for these firms. However, we think the net effects on aggregate GDP will be limited", Schlegel commented in the September press conference.
- A potential US - Swiss trade deal should thus be a marginal hawkish development for the SNB - but for the (rather unlikely) prospects of a cut into negative territory, realized inflation (0.1% Y/Y lastly) and, as a function of that, the SNB's conditional inflation forecast, remains key.
- The November Swiss KOF index should be the first dependable data release quantifying the impact of an emerging deal on Swiss sentiment; the release is scheduled for November 28.
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US: Trump Oval Office Announcement Underway Shortly
US President Donald Trump is shortly due to deliver an announcement in the White House Oval Office. LIVESTREAM The announcement is expected to relate to drug pricing and could follow a similar template to a recent pledge from Pfizer.
- The announcement will be Trump's first press remarks since a market-moving Truth Social statement earlier today in which Trump suggested calling off a meeting with Chinese President Xi Jinping and raising tariffs on China in response to new export controls from Beijing on rare earths. See earlier bullets here and here.
RATINGS: Moody's Completes Periodic Review Of Belgium, No Rating Action
No ratings actions for Belgium from Moody's, which is quoted in a press release on Bloomberg: "Moody's Ratings (Moody's) has completed a periodic review of the ratings of Belgium and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 2 October 2025 in which we reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), and recent developments. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future."
- There had been some speculation there could be a ratings action - MNI wrote Thursday: "* Moody's on Belgium (Current rating Aa3, Outlook Negative): We expect Moody's to maintain their current stance in the absence of 2026 budget details."
MACRO ANALYSIS: US Macro Week Ahead: No CPI, But Plenty Of Pre-Blackout FedSpeak
Below is the week’s data schedule, with MNI’s annotation of whether or not data will be postponed.
- As we went to press, the Fed announced that next week's Industrial Production data will be postponed (was due to be published next Friday Oct 17) as the data “incorporate a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.”
- We won’t be getting September CPI as scheduled on Oct 15, but at least the BLS announced it will publish the data on Oct 24.
- As such next week we’ll be looking at some under-covered data points, including the Redbook weekly and Chicago Fed’s CARTS retail sales data (in lieu of the Census Bureau retail sales report), with a little more focus than usual on regional Fed manufacturing indices (NY, Philadelphia).
- Once again, the dearth of tier-one data leaves Fed commentary in focus ahead of the pre-FOMC blackout period: highlights for us are Philadelphia Fed President Paulson making her first comments on monetary policy on Monday since being appointed in the summer, while as always Chair Powell bears watching on Tuesday (we also hear from Bowman, Waller, Collins, Miran, Schmid, and Musalem).
- Additionally we get the latest Beige Book which was already key given the FOMC was already increasingly focused on anecdotal information as it attempts to navigate murky economic waters.
