Swiss Market Open Under Pressure as US Futures, Oil Rise and FX Shifts Dominate

Swiss equity indices were set for a modest decline at the start of the week, weighed down by broader market sentiment influenced by US futures contracts, rising oil prices and currency shifts against the dollar. The Swiss Producer and Import Price Index for August, due at 08:30 local time, will also draw attention, though corporate earnings reports were absent. Geopolitical tensions in the Middle East have intensified oil market volatility, with recent attacks on Saudi Arabia and Yemen’s Huthi forces raising concerns about supply disruptions. Brent crude prices surged by 2.6% to $107.33 per barrel, while US WTI crude rose 2.7% to $102.78, reflecting heightened market anxiety over energy security amid the conflict in the Persian Gulf. A planned Oman-mediated dialogue between Iran and Gulf states on the Strait of Hormuz was postponed, further complicating regional stability. Meanwhile, US consumer price data released on Friday fueled expectations of a 25 basis-point hike by the Federal Reserve on Wednesday, with a second hike anticipated in December—a first since mid-2023. JPMorgan’s Michael Feroli predicted the Fed would raise rates twice this year, in September and December, warning that inconsistent policy execution could undermine its credibility. While he favored a temporary pivot, he acknowledged risks of a prolonged tightening cycle, depending on incoming data. Asian indices reflected mixed performance: the Nikkei 225 fell 0.8% to 63,498.61, the broader Topix declined 0.7% to 4,054.89, while Shanghai’s CSI 300 index dropped 0.4% to 4,493.64. The US Dow Jones, S&P 500, and Nasdaq all posted gains of 1.0% or more on Friday, though futures contracts opened weaker. On forex, the dollar strengthened 0.3% against the yen (154.03) and 0.1% against the euro (1.1584), while the Swiss franc weakened 0.2% to 0.8176 against the dollar, marking its largest daily drop in weeks. The euro also fell 0.1% to 0.9472 francs. These shifts underscore the interplay between risk appetite, energy markets and monetary policy expectations shaping global liquidity conditions at the start of the week.