LCI Monthly – What Shaped September 2025
Economy & Politics
Trump plans 100% tariffs on pharmaceuticals
Starting October 1, President Trump intends to impose a 100% tariff on imported brand-name medicines. Exemptions would apply to companies building new production sites in the U.S. This is particularly relevant for Switzerland, where pharmaceuticals account for about half of exports to the U.S. Roche and Novartis already have a strong presence in America and recently announced further investments, making them likely beneficiaries of the exemption.
U.S. pressure on Europe: digital taxes in focus
After a brief pause following the trade agreement, Washington is again increasing pressure on Europe. Countries with digital taxes are being targeted as the U.S. demands more favorable treatment for its tech giants.
Leadership change at Nestlé after affair
Nestlé has parted ways with CEO Laurent Freixe over a previously undisclosed relationship with an employee. Effective immediately, former Nespresso chief Philipp Navratil will take over as CEO.
France left without a prime minister after failed confidence vote
Prime Minister François Bayrou lost a parliamentary confidence vote over his austerity plan. Proposed savings of €44 billion and unpopular measures faced broad rejection. With €3.4 trillion in debt, France now faces political deadlock as a fragmented parliament hampers solutions.
U.S. shaken by murder of Charlie Kirk
The killing of Charlie Kirk shocked the nation and raised fears of growing political violence. Even before investigations concluded, Donald Trump blamed the “radical left,” while Elon Musk called Democrats the “party of murder.”
Federal Reserve cuts interest rates under pressure
The Fed has cut interest rates for the first time in years. While officially citing risks in the labor market, the move also aligns with President Trump’s demands for much lower rates.
Trump drastically raises visa costs for skilled workers
President Trump plans to raise the cost of an H-1B visa for foreign specialists from a few hundred dollars to $100,000. The measure is part of his broader goal to sharply reduce legal immigration.
Russian drone strike on NATO territory escalates crisis
Russia has carried out its first large-scale drone attack on NATO territory, marking a new escalation. Previously, Moscow had relied on assassinations, cyberattacks, and sabotage. NATO is now reinforcing its eastern flank.
U.S. tariffs slow Swiss economy in 2026
According to KOF, Switzerland’s economy will grow only modestly in 2026. While pharma exports remain stable, industrial exports are already suffering under the 39% tariff introduced by the U.S. in August. Initial data showed resilience through September, but pressure on key sectors is expected to increase.
Suspension of Jimmy Kimmel Live! sparks free speech debate
The temporary suspension of Jimmy Kimmel Live! after a Trump-critical monologue triggered outrage and boycotts in the U.S. Critics warned of attacks on free speech after the FCC chair threatened sanctions and Trump praised the move. ABC resumed the show on September 22, with Nexstar and Sinclair ending their resistance four days later.
Switzerland signs free trade deal with Mercosur
Switzerland and the EFTA states have signed a free trade agreement with Mercosur. After transition periods, 96% of Swiss exports to the four countries will be duty-free. For exporters, this means annual savings of over CHF 155 million. With 270 million consumers, Mercosur is seen as a major growth market; in 2024, Swiss exports there already exceeded CHF 4 billion.
Gold hits record high – silver also rising
Gold has topped $3,600 per ounce for the first time. Prices are being driven by geopolitical tensions, lower interest rates, and strong central bank demand. Analysts expect further gains, while silver also has upside potential thanks to industrial demand and limited supply.
Gold since the year 2000
Markets
Fixed Income
Eurozone
10-year government bond yields were largely stable to modestly higher in September. The German Bund inched up to around 2.75%, while aggregate euro area 10-year yields rose from roughly 3.1% to 3.2%. In France, political turmoil after the loss of a confidence vote and the resignation of Prime Minister François Bayrou revived concerns over fiscal sustainability. With public debt exceeding €3.4 trillion, OAT yields climbed toward 3.6% and spreads widened modestly versus Bunds. Nonetheless, investors’ focus on forthcoming ECB easing in 2026 helped contain broader market volatility.
USA
10-year Treasury yields edged lower in September, reflecting softer inflation data and growing expectations of a Fed rate cut before year-end. Credit spreads stayed exceptionally tight, with investment-grade bonds continuing to attract robust demand despite heavy new issuance. High-yield spreads also compressed, underlining investors’ confidence in corporate fundamentals and the resilience of the U.S. economy.
Equity
Global Overview
Global equities advanced further in September, with the MSCI World Index gaining 3.3%. Optimism over potential monetary easing in the U.S. and early signs of moderating inflation supported sentiment. Corporate earnings remained resilient overall, while renewed confidence in European and Japanese markets added to the broad-based gains.
Europe
European equities posted mixed results in September, with the Eurozone up 2.7% overall. France gained 2.6%, supported by financials and select cyclicals, as investors looked past political uncertainty and took comfort in signs of underlying economic resilience. Germany lagged, down 0.9%, as industrials and exporters came under pressure from weaker global trade dynamics. Italy (+1.1%) and Spain (+3.9%) advanced on the back of resilient domestic demand and strong bank performance. Switzerland fell 0.8%, weighed down by its heavyweight Nestlé (-3.1%) and broader weakness in defensives. The UK rose 1.6% on renewed strength in energy and materials. Overall, market performance was uneven, with Southern Europe and Spain in particular leading gains, while core markets Germany and Switzerland detracted.
North America
North American equities extended gains in September, with the U.S. rising 3.7% and Canada advancing 5.2%. In the U.S., expectations of a Fed rate cut later this year supported valuations, while technology rebounded and communication services outperformed, alongside renewed strength in cyclical sectors such as consumer discretionary. Canadian equities outperformed again, driven by energy and materials as higher commodity prices and solid demand buoyed the outlook, while financials added stability. Overall, the region benefited from broad-based momentum, with Canada once more leading and U.S. gains supported by both growth-oriented and cyclical sectors.
Asia-Pacific
Asian equities showed sharp dispersion in September. South Korea (+11.6%) and China (+9.6%) rallied strongly, driven by tech and semiconductor strength, export momentum, and renewed confidence in policy support. Japan rose 3.2% on resilient exporters and a supportive policy backdrop, while India gained a modest 1.2% as investors turned more cautious on valuations. By contrast, Australia (-1.6%) and Indonesia (-1.2%) lagged, with weaker commodity demand and domestic headwinds weighing on performance.
Latin America
Latin American equities delivered a strong showing in September, with Brazil rising 3.3% and Mexico surging 8.0%.
In Mexico, the rally was driven by renewed investor appetite for attractive valuations and supportive monetary signals. The market rebounded strongly from oversold levels, boosted by Banxico’s late-September rate cut, which raised expectations for a more accommodative policy path. In addition, Mexico continues to benefit from “nearshoring” flows and its deep integration with U.S. supply chains, which provided resilience despite external headwinds.
In Brazil, gains reflected improving domestic sentiment and sector-specific strength rather than broad commodity tailwinds, as oil prices in fact eased during the month. Equities were supported by a firmer Brazilian real, expectations of monetary policy continuity, and renewed investor interest in financials and consumer-related sectors. Valuations remain compelling versus global peers, offering scope for further catch-up.
in local currency
Performance computed in EUR
Global Sectors in USD
