LIVE MARKETS-In free fall: tariffs dent Swiss watch exports
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IN FREE FALL: TARIFFS DENT SWISS WATCH EXPORTS
Swiss watch exports in August fell by 17% in both value and volume as U.S. import tariffs kicked in, while demand from the rest of the world remained subdued.
"It is consistent with the Swiss Watch Federation's previous downbeat outlook comment that global Swiss watch exports should decline again in 2025," writes Citi analyst Thomas Chauvet.
It was particularly bad in the U.S., where exports declined by 24% last month as Trump's 39% tariff rate on Swiss imports became effective on August 7.
RBC notes this is likely a normalisation following strong exports in April (+150%) and July (+45%), where there was likely some front-running of tariffs.
But it wasn't just the U.S. where exports dropped.
China (-35%), Japan (-22%), Singapore (-14%), UK (-20%), France (-10%) and Germany (-25%) all saw big declines.
RBC says this may be a function of lower product flows at the expense of front-loaded U.S. inventory build up.
"There is also ongoing demand weakness in Asia Pacific, and tepid demand trends in Europe based on our observations," RBC analyst Nikolaos Lafioniatis writes.
Stocks most exposed to the watch category are London-listed Watches of Switzerland WOSG.L and Swiss-listed Swatch Group UHR.S, Lafioniatis notes, particularly the former given the key declines in the U.S. and UK.
(Samuel Indyk)
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EARLIER ON LIVE MARKETS:
EUROPE BUOYED BY FED RATE CUT CLICK HERE
EUROPE BEFORE THE BELL: FUTURES HIGHER AFTER FED RATE CUT CLICK HERE
THERE ARE FED WEEKS WHERE DECADES HAPPEN CLICK HERE
US federal funds target rate https://www.reuters.com/graphics/AUTOMATED-20250918/US-INTEREST-RATE-10Y/egpbqwrzevq/chart.png
European shares buoyed by Fed cut, Wall St futures higher https://reut.rs/3I6H81z
RBC swiss watch
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