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Swiss Blue-chip Index Blinks Red; Swiss National Bank Holds Rate

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The Swiss Market Index slipped into the red on Thursday, closing 0.36% lower, as investors digested the details of the 14-point initial agreement signed by the US and Iran amid a busy day of economic data releases and monetary policy decisions across key markets.

The Federal Government Expert Group on Business Cycles downwardly adjusted its 2026 sport event-adjusted gross domestic product growth estimate for Switzerland to 0.9% from the previous 1% forecast, mainly due to increased energy prices caused by the war in the Middle East and continued uncertainty related to international trade and economic policy. For 2027, the Swiss economic growth forecast was trimmed to 1.6% from 1.7%.

Meanwhile, Switzerland's trade surplus stood at 5.64 billion francs in May, up from the revised 3.28 billion francs in April, data from the Federal Office for Customs and Border Security showed. Seasonally adjusted exports jumped 13.4%, while imports rose 3.4%.

In regulatory news, the Swiss National Bank (SNBN.SW) maintained its policy rate at 0%, as expected, saying medium-term inflationary pressure remains "virtually unchanged" despite an increase in inflation over the last few months due to higher energy prices.

"While early-year deflation concerns have eased, the risk of a significant inflation pick-up in the coming months appears limited. The SNB now forecasts inflation at 0.6% in both 2026 and 2027, and 0.7% in 2028 - each revised up slightly by 0.1pp compared to March projections. Inflation is expected to reach 0.8% in the first quarter of 2029," ING said in a note. "Overall, the outlook remains benign, with inflation comfortably within the SNB's target range. In our view, this points to an unchanged monetary policy stance in the coming quarters. We expect policy rates to remain at 0% for at least the next two years."

On the corporate front, AlphaValue/Baader Europe raised its price target for Belimo (BEAN.SW) to 858 francs from 776 francs, with the stock rated sell, viewing the Swiss heating, ventilation, and air-conditioning control devices company's addressable market as larger than previously anticipated. Belimo's shares were up 0.52% at closing.

"Our target price increases as we have revised upward our assumptions regarding AI-related capital expenditures, particularly in the US, where data centre investments continue to accelerate," the research firm said. "In addition, we view the current trade environment as becoming more constructive than previously feared. While Belimo remains exposed to tariffs and trade-related uncertainties, we believe the recent EU-US trade agreement reduces the risk of further escalation, and provides a more stable backdrop for cross-border industrial activity."

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