SMI: the Swiss stock market is gaining ground

SMI: the Swiss stock market is gaining ground
SMI: the Swiss stock market is gaining ground

The Swiss stock market took advantage of the disappointing US employment report to rebound

The price of the SMI has rebounded strongly since the publication of the American employment report last Friday. The flagship index of the Swiss stock market has gained a little more than 3% since the publication of the report which came out slightly weaker than expected on several aspects.

Job creation and wage growth increased less than expected while the unemployment rate rose unexpectedly, easing the Fed’s expectations/fears of status quo. The probability of a first cut in the Fed’s key rates this year therefore increased, from 87% to 90% after the publication of the report, with a first cut expected in September, compared to November previously.

The fall in bond rates gave a breath of fresh air to the stock markets. Risk appetite is once again dominating while awaiting the first figures on US inflation for April which will be published next week. Given the resilience of inflation figures since the start of the year, these new figures will be of paramount importance for the markets. Figures higher than expected would reinforce fears of more persistent inflation than expected, which would put pressure on bond and stock markets. Conversely, lower-than-expected inflation figures would reassure the inflation trajectory, which would be beneficial to the markets.

SMI Price Daily Chart – Key Levels

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