Economy

Not many statistics were published in the United States. There was an improvement in ISM services purchasing managers’ confidence from 50.8 to 51.6 in April (vs. 50.2 est.) and a widening trade deficit in March (from USD 123.2 bn to 140.5 bn), in anticipation of future tariffs. In the eurozone, Sentix investor confidence improved more than expected in May (from -19.5 to -8.1 vs. -11.5 est.). After contracting by 1.6% m/m in March, the producer price index is reassuring (+1.9% y/y). Finally, in China, the PBoC continued its monetary easing by cutting the reserve requirement rate for the major commercial banks by 0.5% (to 9%). The strength of exports in April (+8.1% y/y) testifies to its ability, for the time being, to circumvent US tariffs.

Planetary Boundaries

As a result of the budget cuts to climate change monitoring decided by the Trump administration, the National Oceanic and Atmospheric Administration (NOAA) has announced that it will cease to feed the databases built up since 1980 on climate and climate-related disasters (floods, heat waves, forest fires, etc.). The historical data will be archived.

Markets

In line with expectations, the Fed kept rates unchanged, justifying its decision by the resilience of the economy and a still high level of inflation. As a result, 10-year sovereign yields rose by 10bp in the US (EUR & CHF: +3bp). The dollar benefited (dollar index: +0.3%), without preventing gold from rebounding (+2.4%). Equities were mixed (US: -0.4%, Europe: +0.3%; emerging markets: +0.5%), while oil prices rallied by 4.2%. The de-escalation of the trade war with China will reassure investors. Coming up this week: SME confidence (NFIB index) and household confidence (Univ. of Michigan), consumer price index, retail sales, industrial production and housing starts in the United States; industrial production in the eurozone; consumer price index in China.

Swiss Market

Coming up this week: air traffic statistics for April (Flughafen Zürich), production-import prices for April (FSO), GDP for Q1 2025 (Seco) and accommodation statistics for April (FSO).The following companies are due to release figures: Tecan, PSP Swiss Property, On Holding, Alcon, Orascom DH, Avolta, Lastminute, Züblin, Richemont, Swiss Re and Hilti.

Equities

ANGLO AMERICAN (removed from the Satellite list): the likelihood of the disposal of metallurgical coal assets being interrupted by Peabody is becoming high. Such a move would damage our investment thesis, by delaying the refocusing on copper and iron ore. In view of this uncertainty, which comes on top of a worsening macro environment, we have decided to remove the stock from our list.

SCHLUMBERGER has been removed from our list of satellite recommendations, in the wake of OPEC’s more aggressive stance of accelerating the release of barrels onto the market, which could be seen as Act I of a new price war.

Pharmaceutical sector: Trump said he would today sign an executive order on the introduction of a most-favored-nation (MFN) pricing policy, which would reduce the price of selected drugs by between 30% and 80%. The scope and mechanism are unclear, but such a policy would require an upstream pilot project. Historically, changes to Medicare and Medicaid have had to go through Congress (see IRA).



Bonds

The 10y UST gained 10bp last week, helped by a rise and a higher-than-expected ISM services and continued uncertainty over the progress of tariffs imposed by the US administration. As expected, the Fed kept its key rates unchanged. In Europe, the 10y Bund remained stable (+3bp), after a week marked by the election of F. Merz as Chancellor in the second round. This week will be rich in economic publications in the US, including the NFIB, the CPI and household confidence measured by the University of Michigan.

Sentiment of traders

Stock markets

A weekend of all-out negotiations with the Sino-US meeting (10% and 30% taxes in the end), a truce in Kashmir, nuclear talks between the US and Iran and a peace meeting on Thursday between Russia and Ukraine. On the macro front, we have the CPI, PPI, industrial production and housing figures in the US, while in the eurozone the ZEW and unemployment figures will be released.

Currencies

The new temporary tariffs announced by S.Bessent this morning (30% on Chinese goods and 10% on US goods) have pushed up the dollar: €/$ 1.1136, $/CHF 0.8430, $/JPY 147.40. The ceasefire between India and Pakistan weighed on the CHF and gold this morning: €/CHF 0.9373 and $/oz 3250. Forex traders will be focusing on Sino-US developments, and we are positive on the dollar. Our ranges: €/$ sup. 1.1050 res. 1.1330, $/CHF sup. 0.8270 res. 8560, €/CHF sup. 0.9250 res. 0.9423, XAU/USD sup. 3217 res. 3335.

Today’s graph

US trade balance graph, 2020-2025, sharp 2025 decline

Performances

Market indices and financial data table, May 2025.

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