The SNB reduced the interest rate to 0%. The Norges Bank cut its interest rate for the first time in five years

The US stock indices did not trade yesterday due to a public holiday.

The Mexican peso (MXN) weakened to 19.1 per US dollar, down from a ten-month high of 18.886 reached on June 12, as the US dollar regained strength amid expectations of easing by the Bank of Mexico and renewed geopolitical risks. The US Federal Reserve’s decision to keep rates at 4.25–4.50% and Chairman Powell’s warning that US tariffs could cause inflation boosted demand for dollars. At the same time, markets began to price in an earlier-than-expected rate cut by the Bank of Mexico, even though Mexico’s benchmark rate remains at 8.5%, which negates the carry premium that had been supporting the peso.

European stock markets were mostly down on Thursday. Germany’s DAX (DE40) fell by 1.12%, France’s CAC 40 (FR40) closed down 1.34%, Spain’s IBEX35 (ES35) lost 1.28%, and the British FTSE 100 (UK100) closed down 0.58%.

At its June meeting, the Bank of England (BoE) voted 6-3 to keep the bank rate at 4.25%, focusing on the complex backdrop of heightened global uncertainty and persistent inflationary pressures. Three members of the bank voted to cut the rate by 0.25 percentage points to 4%, although investors had expected the split to be 7–2. The Central Bank noted that consumer price inflation is likely to remain broadly at current levels until the end of the year and return to target next year.

The Swiss National Bank (SNB) lowered its key interest rate by 25 basis points to 0% in June 2025, as expected, setting the cost of borrowing at zero for the first time since the introduction of negative rates at the end of 2022. This decision was made against the backdrop of easing inflationary pressures and a deterioration in the global economic outlook. Consumer prices in Switzerland fell by 0.1% in May, the first decline in four years. The SNB currently expects average inflation of 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027. In the first quarter of 2025, Switzerland’s GDP also showed strong growth, partly driven by exports to the US ahead of the introduction of new tariffs, although the underlying momentum was more modest.

At its meeting in June 2025, Norges Bank lowered its key rate by 25 basis points to 4.25%. This is the first rate cut in five years. Policymakers said that inflation had slowed since the March meeting and that it was appropriate to ease financial conditions and support economic growth. However, the Monetary Policy Committee emphasized that borrowing costs should remain sufficiently tight to prevent a resurgence of inflation. According to the latest expectations, the rate will be around 4% at the end of the year and 3% by 2028.

WTI crude oil prices slowed their growth at the start of Thursday’s session and are trading below $75 per barrel, just slightly below their five-month high, after President Trump’s statement that he would decide on US involvement in the Israeli-Iranian conflict “within two weeks” allayed fears of an immediate supply shock from the Middle East.

Asian markets were in sell-off mode yesterday. Japan’s Nikkei 225 (JP225) fell by 1.02%, China’s FTSE China A50 (CHA50) lost 0.64%, Hong Kong’s Hang Seng (HK50) decreased by 1.99%, and Australia’s ASX 200 (AU200) showed a negative result of 0.09%.

The Philippine Central Bank cut its benchmark interest rate by 25 basis points to 5.25% at its June 2025 policy meeting, the lowest level in two and a half years and in line with market expectations. BSP Governor Eli Remolona said the decision reflected a more moderate inflation outlook and the need to support growth with a more accommodative policy. Annual inflation in May 2025 fell to 1.3% from 1.4% in the previous month, matching market expectations and reaching its lowest level since November 2019. The inflation projections for 2025 was revised downward from 2.4% to 1.6%, reflecting easing price pressures.