Monday Report


Last week’s US statistics were lacklustre. Consumer confidence, expected to rise in May, fell from 117.5 to 117.2. After bouncing back very strongly, leading economic indicators stood still, with the Chicago Fed index down from 1.71 to 0.24 in April, the Richmond Fed index up from 17 to 18 in May and the Kansas City Fed index down from 31 to 26 in May. Capital goods orders climbed higher than expected in April, up 2.3% MoM. Lastly, home prices were up 1.4% MoM in March. In the eurozone, EC confidence indicators all rose in May, with the services indicator in particular up from 2.2 to 11.3. In China, the services PMI rose from 54.9 to 56 in May, while its manufacturing counterpart was unchanged at 51.1.


On 26 May alone, (i) a Dutch court ordered RD Shell to cut its CO2 emissions by 45% by 2030 and held the group liable for emissions arising from products sold to its customers; (ii) shareholders at Exxon’s AGM approved the appointment of two directors representing “environmental activist” shareholder Engine No.1; and (iii) 61% of Chevron’s shareholders voted in favour of a substantial reduction in the group’s Scope 3 CO2 emissions, which is tantamount to asking the group to lower its fossil fuel sales.


All assets gained ground, in particular commodities (with oil up 4.8%, copper 3.9% and agricultural commodities 3%). Equities also rose (up 1.3% in developed countries and 2.4% in emerging countries). Falling 10-year sovereign yields (down 4 bps in the US and 6 bps in Germany) pushed up gold prices (up 1.1%), with the dollar holding steady. To be monitored this week: ISM Manufacturing and Non-Manufacturing indices, vehicle sales and jobs report in the US; unemployment rate, CPI and retail sales in the eurozone; and Caixin manufacturing and services PMIs in China.

Swiss Market

To be monitored this week: FOH reference mortgage interest rate, FSO April retail sales, SECO Q1 GDP and May PMI. In company news, Aryzta is due to report its Q3 sales and Burckhardt its 2020/21 results.


EATON (US Satellites and b-Transition) has set itself a target, approved by the Science Based Targets initiative, of lowering CO2 emissions from operations by 50% and those from its products and supply chain by 15% by 2030.
NESTLÉ (Core Holdings): the FT reports that 63% of the group’s food portfolio is considered unhealthy. But the memo on which the report is based does not include 56% of the group’s food business (nutrition, coffee and pet care), reducing to 28% the less healthy categories… which, unsurprisingly, are those offering less profitable growth such as frozen pizza, Nesquik and ice cream. Timely pressure for the group to up the pace of rationalising its product portfolio.
SALESFORCE (Satellites) has upgraded its full-year sales and earnings guidance on the back of continuing strong demand for its cloud-based software. More broadly, the company is targeting annual sales of $50 billion by 2026.
VOLKSWAGEN (Satellites): Europe’s two top-selling battery electric vehicle (BEV) models in April were the ID.4 SUV (7,325 cars) and the ID.3 family hatchback (5,735 cars), ahead of the Renault Zoe and the Peugeot 208.


US yields moved lower the length of the yield curve, with 10-year yields ending the week down 2.5 bps at 1.59%. The fall was even sharper in Europe across both core and peripheral yields (with 10-year Bund yields down 5 bps and Italian 10-year yields down 12 bps). Moreover, some ECB governors suggested that asset purchases should continue at their current pace (€18bn a week) in Q3. In credit, all indices posted gains last week, with HY leading the way in Europe (up 0.33%) and IG in the US (up 0.47%).

Sentiment of traders

Stock market
After a quiet start, with both the US and the UK markets closed today, it will be a busy week for statistics, with US and European inflation numbers, US jobs and the G7 meeting in London at the weekend. Commodity prices continue to stoke inflationary fears but market liquidity should support indices.
After testing resistance at EUR/USD 1.2263, EUR corrected to 1.2140; if it breaks through this support level, the pair could fall as far as 1.2060. Forex dealers’ attention this week will be on central bank comments (Fed and ECB). The spread of the Indian variant of Covid-19 in the UK and the potential for it to delay further easing of restrictions could put a stop to sterling’s bullish trend: EUR/GBP 0.8597; GBP/USD 1.4180. Gold has climbed to $1,905/oz; upcoming resistance: $1,950/oz. EUR/CHF: 1.0930-1.1119; USD/CHF: 0.89-0.91; GBP/USD: 1.4018-1.4340.

Today’s graph


This document has been issued for information purposes and is exclusively supplied by Bordier & Cie SCmA in the framework of an existing contractual relationship with the recipient of this document. The views and opinions contained in it are those of Bordier & Cie SCmA. Its contents may not be reproduced or redistributed by unauthorized persons. The user will be held liable for any unauthorized reproduction or circulation of this document, which may give rise to legal proceedings. All the information contained in it is provided for information only and should in no way be taken as investment, legal or tax advice provided to third parties. Furthermore, it is emphasized that the provisions of our legal information page are fully applicable to this document and namely provisions concerning the restrictions arising from different national laws and regulations. Consequently, Bordier Bank does namely not provide any investment services or advice to “US persons” as defined by the Securities and Exchange Commission rules. Furthermore, the information on our website – including the present document – is by no mean directed to such persons or entities.


Thank you !