UBS has issued its first so-called Panda bond on the Chinese interbank market. The five-year bond has a value of 2 billion yuan (240 million Swiss francs) and was issued with a coupon of 1.78 per cent. The financial institution has thus achieved the lowest yield to date for a five-year Panda bond issued by a foreign financial institution, the company stated on Friday. At the same time, it is the first Panda bond to be issued in China by a Swiss bank. The transaction was more than three times oversubscribed, indicating strong investor interest. “Access to the deep and increasingly mature Chinese onshore bond market contributes to the further diversification of our funding sources and improves the efficiency and flexibility of our overall funding profile,” said Chris Chadie, Head of Issuance and Funding Strategy at UBS, in the press release.

On Thursday, the SMI dropped 1.1 percent to 14,387 points. In Switzerland, investors were selling off both defensive stocks and cyclical stocks in equal measure. The SMI was weighed down by the three heavyweights Nestlé (-1.7%), Novartis (-2%), and Roche (-1.2%). Givaudan posted the biggest decline in the index, down 2.9 percent. According to traders, Morgan Stanley had downgraded the shares of the fragrance and flavour specialist. Among the best performers was Partners Group, up 2.2 percent. The company is set to report its second-quarter results on Monday. Among smaller caps, Ams-Osram rose 2.1 percent, benefiting from the strong financial results and optimistic outlook of U.S. chip giant Nvidia. In particular, the company’s surprisingly high revenue forecast dispelled concerns that demand might be waning. In the SMI, ABB (-0.5%) outperformed the market. ABB equips AI data centers; its shares were thus marginally buoyed by the Nvidia figures.

Europe
European stock markets pulled back across the board on Thursday. According to MarketWatch data, the Stoxx Europe 600 index fell 0.7% to 651.9 points. In Paris, the CAC 40 and the SBF 120 lost 1.7% and 1.6%, respectively. In Frankfurt, the DAX 40 gained 0.3%, while the FTSE 100 slipped 0.8% in London. EIFFAGE (-7.4%): The construction and concessions group reported current operating income (ROE) below analysts’ expectations for the first half of the year. Between January and June of this year, Eiffage posted a current operating profit (COP) of 1.02 billion euros, up 2% from the same period in 2025, but below the 1.05 billion euros expected by analysts. PERNOD RICARD (-4.6%): The spirits manufacturer published weaker 2025–2026 results and a cautious outlook. The group led by Alexandre Ricard posted results below analysts’ expectations due to the persistent weakness of its two key markets, the United States and China.

United States
U.S. stocks gained ground as a rosy growth projection from Nvidia mitigated fears about the sustainability of the artificial-intelligence boom. The Dow Jones Industrial Average rose 105.65 points, or 0.20%, to 53569.44. The S&P 500 added 55.29 points, or 0.72%, to 7730.99 and the tech-heavy Nasdaq Composite climbed 411.16 points, or 1.57%, to 26541.35. Nvidia shares surged 8.7%, notching their biggest gain in more than a year after Chief Financial Officer Colette Kress projected 70% revenue growth in the company's 2028 fiscal year. Investors had grown wary in recent weeks about whether hyperscalers' multiyear, multibillion-dollar data-center spending plans would be justified by revenue growth. Salesforce jumped 23% to $252.05. Robust quarterly earnings growth and a joint-venture deal with AI model maker Anthropic defied predictions of the "SaaSpocalypse," the idea that versatile AI agents would render software-as-a-service companies such as Salesforce redundant. Shares of other makers of subscription-based software rose in sympathy. Cybersecurity firm Palo Alto Networks rose 13% to $382.85. Okta rose 29% to $172.91. Adobe shares added 5.7% to $289.15. ServiceNow gained 10% to $138.43. In another sign of a company preparing for a prolonged AI boom, flash memory-chip maker Sandisk struck a deal with partner Kioxia Holdings to invest more than $31 billion in Japan, aiming to ramp up the scale of chip production in Kioxia's home base. Sandisk shares slipped 1% to $1484.95. The memory-chip maker's shares had risen more than fivefold for the year to date before the latest deal.

Asia
Asian indexes diverged for the Friday trading session. In Tokyo, the Nikkei 225 Index is up 0.8 percent, while the broader Topix is gaining 1.1 percent. In contrast, the Kospi in Seoul is down 1.0 percent, weighed down by chip giants SK Hynix and Samsung Electronics, declining 2.1 and 2.3 percent, respectively. On the Hong Kong stock exchange, the Hang Seng Index added 0.5 percent, while the Shanghai Composite Index is holding steady.

Bonds
Long-dated U.S. government debt yields edged higher on Thursday. The 10-year Treasury note yield rose 0.008 percentage point to 4.671%. Yields on U.S. Treasury seven-year notes sold at auction soared to an almost two-year high. The yield on the policy-sensitive two-year Treasury added 0.008 percentage point to 4.230%. Oil prices have been a major driver of recent moves on the Treasury market.

Analysis
Stadler Rail Price Target: Citigroup raises to CHF 30 (21.50) - Neutral
Orior Price Target: Research Partners lowers to CHF 16.20 (16.50) - Hold
Stadler Rail Price Target: JPMorgan increases to CHF 24.50 (22) - Underweight


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