In its latest Cash Management newsletter, Swiss Life Asset Managers analyzes the start of 2025, which is marked by a resurgence of trade tensions driven by the new Trump administration. Financial markets reacted quickly: risky assets faltered, while investors flocked en masse to fixed income, perceived as safer.
This shift resulted in a significant drop in rates:
The ESTR stood at 2.41% at the end of March, down 49 basis points
The 3-month Euribor fell to 2.34%
On the central bank front, the ECB took advantage of the situation to initiate monetary easing, with two successive rate cuts of 25 basis points. The deposit rate now stands at 2.50%. The Fed, for its part, remains cautious with the rate unchanged at 4.25%, but political uncertainties could quickly prompt it to take action.
Monetary Policy: Apparent Calm and Targeted Opportunities
Despite the prevailing nervousness, the primary bond market has shown signs of recovery following the winter lull. Total issuance volume is up 40% compared to the end of 2024. But investors remain cautious on short-term maturities: issuance with maturities of less than two years has fallen by 24% compared to Q1 2024.
In this context, Swiss Life Asset Managers maintains a pragmatic approach. For Maxime Mura, money market manager, the key is to remain selective:
“The money market acts as a bulwark against global tensions.”
Portfolios are therefore refocused on short maturities and negotiable debt securities, with a strengthened liquidity buffer to absorb any potential shocks. The rate movement observed in January also made it possible to capture attractive levels. As for diversification, it remains a strategic priority in an environment that remains uncertain.
This positioning is consistent with the philosophy of Swiss Life Asset Managers: supporting investors over the long term through resolutely responsible and disciplined management.
The full analysis can be found here
