FX.co ★ Swiss 10-Year Bond Yield at 2-Month High

The yield on the Swiss 10-year government bond has climbed to approximately 0.29%, reaching its highest point since October 8. This increase comes as traders around the world adjust their expectations for rate cuts. Despite the anticipation of a forthcoming third rate cut by the US Federal Reserve, the outlook for 2026 remains uncertain, clouded by policy ambiguity, persistent inflation, and inconsistent economic data. In Switzerland, it is anticipated that the Swiss National Bank (SNB) will maintain its interest rate at 0% during its meeting on December 11, marking the third consecutive decision to keep rates unchanged, a stance likely to extend through to the end of 2026. Inflation has moderated, approaching the lower threshold of the SNB's target range of 0-2%, with November's figures unexpectedly lower. Although the Franc's strength and reduced domestic activity have alleviated some price pressures, officials deem it improbable they will implement negative rates, though they have not entirely ruled it out if warranted by future conditions. The SNB also predicts a slight increase in inflation over the coming quarters, bolstering the rationale for upholding its current policy.