Trump tariffs target Switzerland

US President Donald Trump announced wide-ranging tariffs on Wednesday starting with a minimum 10% tariff on all goods imported into the US. As well, the US will impose higher reciprocal tariffs on dozens of countries. Switzerland was slapped with a 31% tariff, which the US says is in response to 61% tariffs on US exports to Switzerland.

The US has warned targeted countries not to retaliate with counter-tariffs, but it's unclear which countries will heed that warning. Trump's dramatic tariff move has sent the US dollar sharply lower today against the major currencies and the Swiss franc has soared to its highest level since October 2024.

The Swissie is a safe haven currency and is benefiting from the massive uncertainty in the financial markets. The US dollar has posted sharp losses today against all of the major currencies.

Swiss inflation stays at four-year low

Overshadowed by the Trump tariff announcement, Swiss inflation was lower than expected in March. Headline CPI rose 0.3% y/y, unchanged from February's four-year low. Monthly, CPI was flat, in line with the market estimate and following a spike in February of 0.6%.

In the US, the ISM Services PMI slipped to 50.8 in March, down sharply from 53.5 in February and well short of the market estimate of 53.0. This marked the weakest expansion since June 2024 as more services managers reported an increase in costs due to US tariffs.

The US releases nonfarm payrolls on Friday. The markets are braced for a decline to 135 thousand, compared to 151 thousand in February. The Federal Reserve is carefully monitoring the labor market, which continues to cool. A sharp deterioration in employment would put pressure on the Fed to respond with a rate cut.