Monday Report


In the United States, the statistics published were mixed. Among the pleasant surprises was the rise in retail sales of +0.7% m/m (vs +0.3% m/m expected) in July, and the stronger-than-expected rise in industrial production (+1% m/m vs +0.3% m/m expected). The rebound in the Philadelphia Fed index from -13.5 to +12 in August was offset by the collapse in Empire manufacturing from +1.1 to -19. Property developers’ confidence (NAHB) fell from 56 to 50 in August, whereas a stabilization had been expected. In the eurozone, industrial production rose more than expected in June (+0.5% m/m). Finally, in China, the accumulation of disappointments (retail sales: +2.5% y/y; investment: +3.4% and industrial production: +3.7% in July) led the PBoC to cut its 1-year borrowing rate, but less than had been hoped.

Planetary Limits

According to the “Aqueduct” atlas published by the World Resources Institute, half of humanity (i.e. 4 billion people) is faced with high water stress for at least one month a year. The worst affected regions are the Middle East and North Africa, where 83% of the population is exposed to a very high risk. The study concludes that 60% of the world’s irrigated agriculture is facing extremely high stress and estimates that by 2050, 31% of global GDP will be exposed to high stress.


Ahead of this week’s central bankers’ symposium in Jackson Hole, 10-year sovereign rates remain slightly bullish (USD: ~+10bp; EUR: ~+2bp). Concerns about the Chinese property market are fuelling uncertainty about growth and are pushing down equities (US: -2.1%; Europe: -2.3% and emerging markets: -3.3%) and commodity prices (oil: -2.3%; copper: -0.5%). The dollar’s appreciation (dollar index: +0.5%) is pushing gold down (-1.3%). Coming up this week: manufacturing and services PMI, durable goods orders and leading economic indicators from the Richmond, Chicago and Kansas City Feds in the United States; manufacturing and services PMI and household confidence in the eurozone.

Swiss Market

Coming up this week: foreign trade and watch exports in July (OFDF), labour productivity 2022 (FSO), public economy account 2022 (FSO) and Q2 employment barometer (FSO). The following companies are due to publish results: Aluflexpack, Arbonia, Intershop, Orior, Sensirion, Autoneum, Peach Property, Alpiq, Evolva, Kudelski, SoftwareONE, SPS, Molecular Partners, Zug Estates, Vetropack and Cham Group.


ALCON (Satellite) has reported another set of strong Q2 results and raised its full year guidance, with turnover growth expected at 9-11% at constant exchange rates and an operating margin of 19.5-20.5% (+180bp y/y). The company is continuing its turnaround and is on track to achieve its 2027 guidance (turnover of $12bn – vs $9.4bn in 2023 – and operating margin close to 25%). We are buying the company.
ALSTOM (Satellite): The Iraqi Ministry of Transport confirmed on Friday that the Baghdad metro project, estimated at USD 2.5 billion, had been awarded to Alstom and Hyundaï. Alstom had signed a letter of intent in 2020; its share of the total is unknown at this stage.
BAIDU (Satellite) will publish its Q2 results on 22.08.2023. Despite the macro uncertainties weighing on advertising and cloud activities, we expect double-digit growth in these segments. In addition, Baidu should also take the lead in standardising AI models in China.
COLOPLAST (Core Holdings): although Q3 results were mixed, still impacted by cost inflation, higher marketing spend and exchange rates, the 2023 targets have nevertheless been confirmed. The improving trend observed in the Ostomy Care and Continence Care divisions (69% of sales) is positive for the coming quarters. We are buying the company.


In the US, rates finished higher for the 5th week running, with the bear steepening continuing in a context where the market is no longer expecting a recession and a higher neutral rate (2Y +5bp/10Y +10bp). EU rates have evolved differently on the “core” side, with the Bund and OAT curves broadly unchanged, while peripheral rates have risen (BTP 10Y +8bp). Interest rate movements are beginning to impact the credit side, with spreads widening on HY (EU&US +17bp) and IG (EU&US +3bp).

Sentiment of traders

Stock markets
After a 3rd week of declines, investor sentiment is not at its best for the start of the new year. With China still waiting to pull a stimulus plan worthy of the name out of its hat, and the central bankers meeting in Jackson Hole, the markets are likely to remain cautious. A rebound is therefore unlikely this week, unless Nvidia’s results published on Wednesday reshuffle the deck.
The EUR/USD support level (1.0912) was breached, boosted by rising US interest rates. Following this move, the dollar remains on an uptrend, with EUR/USD 1.0880 and USD/CHF 0.8820 this morning. Forex traders will be paying close attention to the central bankers’ meeting in Jackson Hole this Thursday. The GBP is consolidating at GBP/USD 1.2730 and GBP/CHF 1.1230. Gold is down USD 30 at USD 1,890/oz.

Today’s graph


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