2023-10-09 14:03:08
In the euro zone, the unemployment rate remained stable in August at 6.4%, but retail sales disappointed.
The statistics published in the United States have been rather reassuring. The manufacturing ISM recovered more than expected in September (from 47.6 to 49) and compensated for the less pronounced decline than expected in its services counterpart (from 54.5 to 53.6). But it is above all the employment report which testifies to the resilience of the economy: 336,000 jobs were created in September, double what was anticipated! In the euro zone, the unemployment rate remains stable in August at 6.4%, but retail sales disappointed by contracting by 1.2% m/m (-2.1% y/y) in the same month . Producer prices rose by 0.6% m/m, but the decline over one year is reassuring (-11.5%). Finally, in China, Caixin’s PMIs are down: manufacturing goes from 51 to 50.6 and services from 51.8 to 50.2, levels compatible with an expansion of the economy at the current unchanged pace.
Planetary boundaries
The 2023 version of the International Energy Agency’s “net zero scenario” indicates that global investments in “clean tech” will reach $1,800 billion in 2023 and will have to be multiplied by 2.5x, to reach 4,500 billion. billion in 2030. In particular, solar capacity installations should reach 820 GW pa in 2030, a figure revised up 30% compared to the 2021 edition of the scenario.
Obligations
In the US, we observed a violent upward movement (10Y +23bp/30Y +27bp) following better than expected economic data (Manufacturing PMI and employment report). The market is expecting a scenario close to the “higher foverer” with expectations of the 2029 Fed Funds rate @4.70%. In Europe, the rate movement was less aggressive in the “core” countries (Bund 10Y +4bp/OAT 10Y +7bp) although the Bund-BTP spread continued to climb (+9bp to 203bp). On credit, spreads widened across all categories in Europe (HY +28p/IG +8bp) and in the US (HY +28bp/IG +4bp).
Sentiment des traders
Bourse
The unexpected return of tensions in the Middle East especially benefits government bonds, oil and gold and might precipitate a decline in stock markets already weakened by rate increases. We will closely follow the publications of the PPI and CPI in the US as well as the opening of the results season with American banks on Friday.
Devises
Forex traders are focusing this Monday on the Israeli-Palestinian conflict, risk aversion supports the $: €/$ 1.0531. A break in the sup. 1.0490 would accelerate this movement, the res. 1.0674 remains valid. The CHF appreciates at $/CHF 0.9112 and €/CHF 0.9600. We anticipate the following ranges: $/CHF 0.9000-0.9250, €/CHF 0.9475-0.9750. The £ consolidates at 1.2183 sup. 1.2011 res. 1.2308. Gold jumps to $1850/oz, sup. 1804 and res. 1947.
Markets
The economic figures, better than expected, are pushing 10-year sovereign interest rates even higher (USD: +23bp; All: +4bp; Fra and Ita: ~+7bp) and directly penalizing bond prices. gold (-1.5%). Stocks are moving in a dispersed order (US: +0.5%, Europe: -1.2% and emerging countries: -1.6%). The sharp decline in oil (-11.3%) is today called into question by the emerging conflict in the Middle East. To follow this week: SME confidence (NFIB index), consumer price index, Fed “minutes”, household confidence (Univ. of Michigan) in the United States; investor confidence index (Sentix) and industrial production in the euro area; foreign exchange reserves, consumer price index, credit, monetary aggregates and trade balance in China.
Swiss market
To be monitored this week: Confederation loan (NBS), September air traffic statistics (Flughafen Zürich) and September production-import prices (OFS). The following companies will publish results or turnover: U-blox, Bossard, Givaudan, VAT, Kuros and Bystronic.
Actions
BYD (Satellites) sold 287,454 NEVs (New Energy Vehicles) in September (+43% y/y) and 2.08 million over nine months (+75.5% y/y) compared to 1.80 million for set of the year 2022.
EDENRED (Satellites): the results of the Competition Authority’s investigation into the meal voucher market should be published in the coming days. If dysfunctions are confirmed, the government might consider introducing a cap on commissions (maximum 3% vs. average of 3.8%). We remain positive on Edenred.
MICROSOFT (Core Holdings) plans to unveil its first chip designed for AI at its annual developer conference (Microsoft Ignite, scheduled for November 14-17, 2023). Although Microsoft doesn’t plan to stop buying Nvidia’s GPUs, the group hopes to encourage cloud customers to use its in-house chips.
Ingredients Sector – Symrise (Core Holdings) – DSM-Firmenich (Satellites): alert on the results of Croda, which lowers its pre-tax profit by 20% in 2023. Over the last 12 months, Croda has been more impacted than its peers by destocking , with a presence in agrochemicals (segment which deteriorated over the last quarter), which makes reading more difficult for the Ingredients sector. Note that the market is already expecting a weak Q3, in line with the first half. As such, the publication of the Givaudan CA (Convictions Suisse) on 12/10 will allow an update on the evolution of destocking.
Chart of the day
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