Monday Report


Last week’s US statistics were something of a mixed bag. Disappointments included February retail sales, which fell more sharply than expected (down 3% MoM), though the January number was revised upwards. Year-on-year growth was a very satisfactory 6.3%. The other disappointment was industrial production, which fell 2.2% MoM in February. Conversely, regional leading economic indicators surprised to the upside, with the Empire Manufacturing (NYC) up from 12.1 to 17.4 in March and the Philadelphia Fed indicator surging from 23.1 to 51.8. In the eurozone, price inflation remained weak in February (at 0.2% MoM and 0.9% YoY). The January trade surplus was disappointing (€6.3bn), reflecting continued disruption to global trade from the pandemic.


In its March 2021 report, the International Renewable Energy Agency (IRENA) estimates that sticking to the desired carbon trajectory will require 30% more than the currently committed level of investment: $131trn between now and 2050, or an average of $4.4trn a year. Investment will need to be focused in particular on energy efficiency, carbon-free electricity generation, greater electrification of buildings, industry and transport, and green hydrogen.


Despite publishing 2021 and 2022 growth and inflation outlooks well above its December estimates, the Fed tried to maintain a very accommodative bias. This was no easy task. US 10-year sovereign yields ended up rising 10 bps. Equities took a breather (up 0.1% in Europe and down 0.8% in the US and emerging countries). The dollar benefited as spreads widened in its favour (with the dollar index up 0.3%). Lastly, gold gained 1.7% despite rising yields and US dollar appreciation. To be monitored this week: confidence indicators from the Chicago, Richmond and Kansas Feds, manufacturing and services PMIs, durable goods orders and household income in the US; and manufacturing and services PMIs, consumer confidence index and M3 growth in the eurozone.

Swiss Market

To be monitored this week: SNB 2020 annual report, monetary policy assessment and Q4 balance of payments and KOF spring forecasts. The 2020 results season is drawing to a close, with results due from Santhera, Investis, Cassiopea, Cham Group, Helvetia, SoftwareONE, Aevis and Cosmo.


APPLE (Core Holdings) is set to roll out App Tracking Transparency (ATT) in version 14.5 of iOS. Much is at stake, with Chinese internet companies trying to find ways around Apple’s new data protection rules.
ASTRAZENECA (Core Holdings) has reported interim data from the US trial of its COVID-19 vaccine. The vaccine proved 79% effective for the whole population with two injections administered four weeks apart, and 80% for over-65s (20% of the trial population). It proved 100% effective in preventing serious illness and hospitalisation. On the safety front, no increased risk of blood clots was identified.
ENEL (Satellites and b-Transition): on reporting its (strong) annual results, the Italian group upgraded its 2030 renewable electricity capacity installation target by almost 50% to over 200 GW on a total budget of €150bn.
SAINT-GOBAIN has been added to our European Satellites with the b-Transition label. The group, trading at a discount to its peers, claims that 60% of its sales derive from products that help lower CO2 emissions. The appointment of Benoit Bazin – currently COO and Deputy CEO with responsibility for the “Transform and Grow” plan – as new CEO should see some value finally realised.
VISA (Core Holdings) is being investigated by the US Department of Justice for anticompetitive practices in the debit card space. The share lost 6% on the news.


At its last meeting, the Fed confirmed that it expected to hold interest rates unchanged until at least the beginning of 2024 while reaffirming that its monetary policy was “appropriate”. However, interest rates remained highly volatile, with the market still expecting the Fed to tighten monetary policy earlier and US 10-year Treasury yields climbing 10 bps to 1.72%. Against this backdrop, high-yield credit spreads widened in Europe (up 5 bps) and the US (up 9 bps), with all credit indices posting negative returns.

Sentiment of traders

Stock market
Markets lacked fuel to rise any higher last week, with the Fed withdrawing support for US banks. This week will see European and US PMI numbers but will be fairly quiet in terms of figures. With yields still stretched and indices at peak levels, we remain cautious.
Following the Fed’s decision to maintain the status quo, USD tested major support at USD/CHF 0.9220, EUR/USD 1.1980 and GBP/USD 1.3970 before rallying to end the week at EUR/USD 1.1880, USD/CHF 0.9305 and GBP/USD 1.3840. With EUR under pressure as a result of fresh lockdowns, we expect the following ranges this week – EUR/USD: 1.1836-1.2010; USD/CHF: 0.92-0.94; EUR/CHF 1.0950-1.1110. After a 2% rise in interest rates and the sacking of the governor of Turkey’s central bank, the Turkish lira has plummeted 18% against the dollar. Gold has consolidated at around $1,729/oz.

Today’s graph


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