PKB's Market Espresso
November 12, 2025

US/CH – Is 15% the Magic Number?

Switzerland is close to securing a 15% tariff on its exports to the US, a massive improvement from the 39% that was assigned by the US Administration in August

• The deal has yet to be finalized but could be concluded within the next two weeks – President Trump directly confirmed that his administration is working to get tariffs to Switzerland lower
• The turning point can be narrowed down to last week’s meeting between Trump and a group of Swiss billionaires and corporate executives met at the Oval Office – Trump subsequently ordered his Trade Representative to step up negotiations
• A potential 15% levy would match that of the neighboring European Union
• The SMI rose on the news led by stocks that have direct exposure to the US (Richemont, Lonza and Partners Group) – the Swiss Franc also strengthened against the US Dollar

Weaker ZEW index in Germany

Investor confidence in Germany unexpectedly slipped in November dampening optimism on some turnaround hopes

• Expectation index by the ZEW institute dropped to 38.5 in November from 39.3 in October and well below analyst expectations of 41.0
• The reason for such a weak number is the fall in confidence in the capacity of Germany’s economic policy to tackle important issues
• Analysts still expect German output to rise in the fourth quarter as the government plans to spend billions of Euros on defense and infrastructure and this will translate into stronger growth
• Soft data (business confidence and Ifo index) has recently offered assurances that such expectations will come to pass while hard data has been less convincing

US Shutdown Nears End

A record-setting 42-day US government shutdown is on a path to end after the Senate passed a temporary funding measure backed by a group of eight centrist Democrats

• Reopening the government now depends on the Republican-controlled House, which plans to return to Washington to consider the package. It would keep most of the government open through Jan. 30 and some agencies through Sept. 30
• Speaker Mike Johnson said he expects the funding will pass quickly. If approved, the bill goes to Donald Trumpfor his signature and the president has already endorsed the legislation

Source: PKB Elaboration on Bloomberg Data

FTSE Mib hits highest level since ‘07

The Italian flagship index, the FTSE MIB, has climbed to level not seen since 2007, reflecting renewed confidence in Italy’s equity market and economy, signaling a milestone moment for domestic sentiment. The next midterm technical target at this stage would be the 50,000 level, last seen at the beginning of the century.

• The index represents around 80% of Italy’s total market capitalization and is composed of the 40 largest and most liquid Italian stocks
• The largest constituents are Intesa Sanpaolo, UniCredit and Enel, followed by Ferrari and Generali
• Among the best-performing stocks are Telecom Italia, Iveco and Leonardo, whose share prices have almost doubled this year, although the main drivers of the index remain the strong performances of the two major banks.