USA: Housing starts surprise positively – Bordier Monday Report

In the euro zone, unsurprisingly, industrial production rose in February and manufacturing and services PMIs remained solid in April.


US statistics remain satisfactory. Promoter confidence deteriorated in April to 77 (-2), but was in line with expectations. Housing starts (+0.3% m/m) and building permits (+0.4% m/m) surprised positively, as did the manufacturing PMI for April at 59.7 (+0.9). That of services at 54.7 (-3.3) vs 58 expected, on the other hand, is disappointing. In the eurozone, unsurprisingly, industrial production was up 0.7% m/m in February and the manufacturing PMIs at 55.3 (from 56.5) and services at 57.7 (from 55.6) remained solid in April, despite the context, and consumer confidence deteriorated less than expected at -16.9 (+1.8). Finally in China, Q1 GDP progressed more than expected (+4.8%), but retail sales disappointed in March (-3.5% y/y) due to confinements.


According to the US Oceanic and Atmospheric Administration, the concentration of methane in the atmosphere, responsible for c.30% of warming, has been accelerating sharply since 2007, to 1880 parts per billion by the end of 2021. The International Energy Agency estimates that a 30% drop in methane emissions would have the same effect on the rise in temperature by 2050 as a neutralization of global CO2 emissions from land, sea and air transport.


Rate volatility remains very high and investors continue to raise their rate hike expectations. In the US, Jerome Powell opened the door to multiple rate hikes of 50bp, which caused short rates to surge (2Y +21bp) with a market now pricing in 10 rate hikes in 2022 (Fed Funds @2 .77%). In Europe, yields also rose (Bund 2Y +24bp) and the market believes that the deposit rate will be in positive territory by the end of the year.

Trader Sentiment

Sotck exchange

The sell-off initiated last week continues this morning, while quarterly publications will be legion (Microsoft, Alphabet, Apple, CS, Exxon, DB, etc.) and also macro (durable goods orders, real estate sales in the US and CPI in eurozone). Between rate hikes approaching in the US, war in Ukraine and the return of the Covid in China, there is not much good news.


Risk aversion is pushing the € and the £ sharply down: €/$ 1.0722, £/$ 1.2737, €/CHF 1.0269. We anticipate the following ranges: €/$ 1.0640-1.09, £/$ 1.2512-1.3148, €/CHF 1.0087-1.04. The $ strengthens taking advantage of the upcoming rate hikes: $/CHF 0.9585, next resistances 0.9664, 0.9902, support 0.9345. The oz of gold is at 1919 $/oz, sup. $1880/oz, res. $2000/oz.


The acceleration of expectations for Fed rate hikes and the confinements in China are raising fears about growth, revised downwards by the IMF (from 4.4% to 3.6%), in addition to a upward revision of inflation (from 3.9% to 5.7%). Commodities (-2.4%) and oil (-4.7%) corrected, like equities (emerging -3.3%, US -2.9%, Europe -1.4%), while bonds (US -1.5%, corporates -1.3%) continue to suffer from rising yields. Only safe haven asset: the dollar (+0.9%). To be monitored this week: regional leading economic indicators (Dallas Fed, Chicago Fed, Richmond Fed), house prices, durable goods orders and consumer confidence in the United States; IFO index in Germany; industrial profits in China.

Swiss market

To be monitored this week: foreign trade/watch exports March and Q1 (OFDF), Q1 results of the SNB, March retail sales (OFS) and April economic barometer (KOF). The following companies will publish turnover figures or results: Roche, Kühne+Nagel, UBS, Idorsia, Novartis, Temenos, Ems-Chemie, Credit Suisse, Airesis, Bucher, Straumann, Clariant and Swisscom.


This week, the focus will be on the publication of cloud providers AMAZON, MICROSOFT and ALPHABET (Core Holdings). Given the context of inflation and macroeconomic instability, the rate of growth in turnover will probably be less strong than expected (on average +45% in recent quarters).

ANGLO-AMERICAN (Satellite) announces that the Chilean environmental authorities recommend the rejection of the Los Bronces extension project (copper mine). The project meets the environmental conditions but questions remain in terms of public health. The final decision is expected soon. This project will not impact Anglo’s results in 2022 and 2023 but is part of the longer term catalysts.

ROCK (Core Holding) published good turnover for Q1, up 10% (+3% vs consensus), driven by diagnostics (+22%) and to a lesser extent pharma (+5.3%). The 2022 objectives are confirmed. But, the publication is offset by the failure of giredestrant in a form of breast cancer, reducing the clinical news expected over the year. Consensus expectations for this asset were limited, however.

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