Kaiser Partner Privatbank AG - Monthly Market Monitor August 2022 EN

Monthly Market Monitor

August 2022

Table of contents Iv Nutshell

Macro Radar Tl]vPRo}(}v}u]]˙

Our view on the markets

04

05

Satellite View (Icy) regards from Moscow

06

Aoo}}v N}(}uRIvuv}uu]' C

TRu]vF}

08

Parity is the new reality for the euro

10

`}`v D P P]Bvl]vPC}v Ov]vG}vv]vG}v˘}v

12

The Back Page Asset classes & agenda

14 Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

3

In a Nutshell

O]`}vRul

WR [Rv]vP`]R}} v]vPM Iv ] }(u}}v}u] v P}}o]o ]lU v ]vP ˘}v }]vP }v ]˙ ulX TR contrast to the reality of stock prices couldn’t be starkXH}`Uvv]vP}}v`]oo.v]o˙R }lo XTR}vo˙ }v]P˙R}`uRMB v`U R}PRU u˙ }}v } P ]v P}}v` ol]v}vuv]v] R P}} o}(]] o˙ ] ]vX Y]o ˘]vR ]`u]} Central banks are currently rushing to raise policy inX vE R E}v Cvo Bvl R vo˙ iu }v R v`P}vX WRR R o v]vP `v .PRvP ]vG}v v vP]v]vP }L ov]vP `]oo ]v[ o ˙ ]v R USAU u Ro˙ }]o ]v R E}}vX G]v R u}vvP ]l } }v}u] ]˙ v R o R }( ]}vU R v]R ]v }v ˙]o u˙ o˙ R]v U o (} R] ˙oX (Icy) regards from Moscow S}]vP vP˙ ] ]v E} (o]vP ]vG}vU ]vP ]v v }vu vuvU v R]vP R }v}u˙ } R ]vl }( ]}vX I( R] }uoo˙ R }+ vo P R]uv ]v

CR }(R M}vR M]v RPn American job conundrum Unemployment rate and job openings rate in the USA 16% 14% 12% 10% 8% 6% 4% 2% 0 2002

2006

2010 Uvuo}˙uv Unemployment rate

S} PBo}}uPUK] P 4

2014 Job Openings»-Rate openings rate «Job

artner Privatbank

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

2018

2022

Rv( UR`}o(R lvv}v}u ]P}`R}o}}lR]o˙Po}}u˙X]( B Vo]u] Pv R]Svo }}vU_R`}o.vR]uo( }vRo}]vP v]vRo}vP vX

-

P]˙] R v` o]˙ TR ]vvo o }( R } ]v[ oo R [ uovP away at the moment like an ice cube in the sun in the (}( }]vP]vG}v XI ˘voo ] o} }v }vvo o]v P]v R ui} ov v] ~`R]R ] ]}voo˙ `}v]vP R ]vG }v }ouX P]˙ ] R v` o]˙ (} R E} v }uu}v v˙X TR R]v ] o ]}v R v oPo˙ o(r]vG] U v v o] v} ]v]PR(} R u ]vPX Ov]vG}v v ]vG}v˘}v Ruv]vG}v]R]vP `}˙o]v}v}R (}R }( }vu v ]v} R o' watch the purchasing power of their assets rapidly get } X H}`U u}]o˙ l˙}lvP ]vG}v R}o v} }i ]v} R ( X M lr v ˙r ]vG}v ˘}v oo `oorvR} v P] }v } v] R o v`]oo˙}] ]vRo}vP vX

TR US uo}˙uv ul ] v o} } }v R ˙ (} vu }( }v X Ov }v Rv U R USF oR ] ]o˙]uouvvP vigorous policy rate hikes to let some steam out of R } ]o }]o]vP o}v } P ]vG}v v }v}oX Ov R }R Rv U } }v }v ]v uo}˙uv ] v vo ( }( ]}vU which economic actors and investors are dreading at R u}uv X TR US uo}˙uv ul ` P]v } ]v Jv `]R U v` i} U the number of job openings has been on the decline oo˙ v o˙}+ vv}vuv R v }v R ] X TR F }v[ R uR uv ]vP }}u (} ] v }X A }]vP } R SRu Ro U R US economy has consistently slipped into a recession in the past when the three-month moving average of R v}vo vuo}˙uv o]u ˙ ~ u Ro( }( vP }]v X

Macro Radar

Tl]vPRo}(}v}u]]˙

}E PTRv}((}`P]v Rv ˙}( RvPUv vo vlXTR](}`P]v]v}o}vPo]oUv S]]vrR]l_R}uRv`v}uX TR}v E vo C vl B U (}˘uoUvv.vv ]oul`]R]PPrRvæ r r]r}]v R]l]Jo˙}o]˙uvPXIvR(}(}]vP ]vG}vUR(}uu}v˙r}o]˙R`l vo˙ ` }}}vP}r}]v oi] ]vXH}`UR}Ro}P}'v}uv` (}PR[B Cv` E Tvu]]}vP}}vIvuv ]]u}vPRv}(u}v˙}o]˙} v}uoUv]vo]u]}ou]o]lo˙} ul]v +uv}(vP(Puv}v}vR}E v}vulXIu]v}vUR}PRU`RR ]`]oo}}v}R˙o}X

USAPTR˙]o or} TRUSFoR`oo}vv}}vR Po]}vu}v˙}o]˙}v}uoU v]PRvR]v`r}vu}R - v}(Jo˙XTRF[+}}Pl}]v(}v}( Rv}}R]vPLulo}uv ovo˙}]}XH}`UR]u}Rvu P]vo]lRRF]}]vP}}uR}}ov`]oo o˙R}l(`u}vR(}uv}`XS}u }]vo˙]v]vPR]vG}v]ov ]vPo]PRo˙`R]o]vv}vu}v.vv vuv}vRoor]u}vR}]vPul ]o˙ ]uu]vPXTRUS˙]oRo˙]}P( - u]v]r]v]}v]v]o A URr˙lr˙T˙ o]`oo]v}vP]}˙]vJo˙XW]RR] }]oo˙R]PR(}R}`]vP˙UR˙]o P]P}}}v}˘]}v ]vRUSA˙ RoX

C}vv u 2 01

20

20 3

GDPP}`R~]v9A Switzerland

3.6

2.5

1.5

u E rozone

5.3

2.7

1.1

UK

7.5

3.4

0.6

US A

5.7

2.0

1.3

China

8.1

4.0

5.2 1.3

Iv(o]}v~]vA9 Switzerland

0.6

2.6

u E rozone

2.6

7.5

3.6

UK

2.6

8.6

5.0

US A

4.7

8.0

3.6

China

0.9

2.3

2.3

aK iser Partner Privatbank interest rates view 3M

12M

- 0. 2 5

AR

AR

u E rozone

0.0 0

AR

AR

UK

1.25

AR

AR

US A

2.50

AR

AR

China

2.85

AP

AP

0.4 4

AP

AP

u E rozone

0.85

AP

AP

UK

1.86

AP

AP

US A

2.67

AP

AP

China

2.73

AP

AP

10 -year yields (in )% Switzerland

-

-

R]v C PG}`RP˙}vR M}}]v(}uR]v C u]v˘uo˙}ooX WR]oR}v˙[}vrGDP P}`R .P ]}]v ˙r}vr˙}( i= A X9A U} v}u](}Jv~]ooU˘}U]ov]vP ( ˘˘}vU R}PR R ` '] o u}}vruv+LR]vP }(OVID C rıo}l}`vRv}PvovoX R]v C [}PPRv}}rCOVID}o]˙vR }v˙[}ou}oRRR P}vuv[æXæA9P}`RP]v}RR˙]v `R]]Po˙vRoUv`]R(R]v( }iX

-

-

Soo}}}u]n G}`Ruv}] Consensus growth estimates for 2022

L ast Key interest rates (in )% Switzerland

-

While the inflation trend continues to point upward, economic growth estimates for this year are swiftly being revised downward. Central banks are still behind the curve, and the risk of monetarypolicy errors is mounting.

6%

5%

4%

3%

2%

S}PBo}}uPUK]PvP]vl Global

USA

Eurozone

Switzerland

United Kingdom

China

S}PBo}}uPUK]PvP]vl Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

5

Soo]V]`

(Icy) regards from Moscow

Soaring energy prices in Europe are fueling inflation, depressing business and consumer sentiment, and pushing the economy to the brink of a recession. If Russia completely shuts off natural gas shipments in the near future, that would further darken an economic growth outlook that is already gloomy. But if Vladimir Putin uses this “nuclear option,” he would find himself on the losing end in the long run.

Yv}RR}l(}uPv TR`]vUl]v.v(}u}]]vPRuv +]vPU]~]v]}vvo}]vo looming famine catastrophe in several developing coun] v }]vP vP˙ ]U oo˙ ]v }E X Sl˙rR]PR vP˙ ]oo Ro˙ Ruu]v v }vu vuvX vA v}`U R R]PR }( u]uuUR]vP]vVo]u]PvRo yet another shock to this already tense economic situa}vPR]voPR]uvR}PRRN} Su ]o]v ˙ 9A ]v u]rJvX Uv]v } R vo P o˙ ]}v (} R }u]vP `]v}vPu]o˙U ]voP] XTRvRul}v E voP( }]vPR]L`˙æ}Xu]vP A ˙]o }vu}v R]} 'vU R ] ]v ]uo] v ˘P]oo u}vvP } UR E u]oo]}v (} R}}v E ~o} XæA9 }( R UE [v vo}v}u]}(}Rv˘`ou}vRX Pv[ }v } Wv v}v ]v[ R]vP v](}uo˙]}v ˙`R ]v }E X u}vP A R oP }v] ]v }E U ][ u]vo˙ } v}u]}`R}Guv˙vIo˙R]o o˙˘}R˙}Rol}(R]vo P]u}(}u R]X T} }o `]vv} v }}v }P ]v R uv(]vP }U}o]˙uloo˙]vR}}v] }]vP˙R]vPR˙v}vRP}vv } G}` } v}uv } R]}v ] R}lX }A ooU R}PRU P}vuv ˙]vP R}}

Rv`]n TRvoPul]v]vPR}P Terminpreis und Terminkurve für europäisches Benchmark-Erdgas (TTF), in €/MWh 250

200

150

100

50

0 Forward gas price (TTF) 2019

2020

2021

Current forward curve 2022

Term curve on June 1 2023

S}PBo}}uPUK]PvP]vl 6

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

2024

] uR o]( }]o (} ]R}R}oU `R]R o˙ PPo]vP } }vv `]R ]vG}v ]XvB ](R]vv}vo}o}`R ]uu] ]v]v vo P ]U R]PR } `]oo .v]o˙ }u U ]( v} (} }˙[}vuU Rv v }v (˘˙X R] ] ]vP }E [vP˙ vv˙ } ] }o]]˙ `]R Ul]vv}vR}}(R}o]]˙}]vPX W]ooPvvR(}RSvo}}v_}}vMI( R}v}]Pv].vo˙u PR]uvP]v R}PR R N} Su ]o]v }}v v}` R R u]vvv `}l }v ] R v }uoU R] would further darken an already gloomy economic ac]˙}o}}l(}}E Xo}uv D ]vRo`l }(Jo˙}v}}`oo]vR]PX

Bvv`}v]} A }( u]rJvU R }v E Uv]}v v Guv˙ ` `oo }v l } .oo R] vo P } P oo }( 9A v ı9A }( }o } P]˙XI(R˙]v}]vPRU]`}o }]o } P R}PR v˘ `]v `]R} R]vP } - }v PU v ]( R] }uoo˙ R }+ R P - o ]vP R } }( R `]vX I( N} Su uo]]vPP}(o9A }(] v}uo]˙LRuuURUE `}o ooo}PR}PRv˘`]v`]R}v˙] }o˙]8oU`}oR}˙~˙R]PR ]X B o}vP] R] o˙ v]}U R }v R v `}X I( N} Su ] - started with a much smaller volume of gas in the weeks R } ] v lv }+U vo P ]v R UE }o }uoo˙ o }` R v}(v˘`]vXT}˙}vR(]UvoP `}oR}}v`oo(}Rv]u]o˙]v ]v˙U R}PR o (} ] R}R}oX I( R] o} R }`v }R ]o]v } }E U R }v v `}o v u}X S}u ]v]o gas customers would probably have to completely halt }}vX Iv R] `}U R UE `}o o] ]v} ]}v ~GDP }v}v ˙ } 9A v Guv˙ `}o ovP ]v} vv }v ~GDP }v}v ˙ } 9A X Iv R }( Guv˙U R Ru]o ]v˙ v R uo }}v v } ]vP}U`R]RRoo˙R]PR]u}v (} R }v˙[v}vo }v}u˙U `}o oo˙ R R]X B v} }vo˙ ]v˙ `}o +X A (RRvP }( ]vG}v `}o o} ]PP v ]v }vu v]vPX P]v A R

l}}(Rv]}]}URv }vvu(} }v}u] P}`R ]v R}E }v Po]vPo˙ o}}l ˘]vPo˙ }u] v } v} o˙GRR]PRv]l}(]}v]v R}}v E UR}]o]˙}(`R]R`v}`u æ9A }u}~`]R]vRv˘`ou}vRXMv `R]oUu(}R]vG}vvU`R]R ] }}]v ]U`}oR} i(R `X

-

R]vvP˙}Yn …as a weapon Daily volume of natural gas supplied via Nord Stream 1 in millions of cubic meters 175 153 131

-

109 88 66

G}}o]o }vv v ]}v (} u}v˙}o]˙ WRR Pv }v R }u`R o v]} }}E u]v } vX TR Wv } nothing other than prepare itself as well as possible } (R `}rv]}X Ov R]vP R[oU R}PRU ] R R] ]o( `]oo o} ˙ R]PR ] (}]}vXTRUE ]]vPvvP˙v]}v `˙(}uR]vvoPv]}]vPR]lo˙ v}`X I( Pv l R P o v }+U R UE `}o}o ]+}v `}o }}v }uoo˙ } ]u} R]v P o}PRX R] `}o lose important revenue for good because the country’s voPvv}}}˘}v˙`Ro }vu]o}vM}}`[`R]uXTRu}v˙r }o]˙ }o}}l (} R }}v E U ]v }vU ] Ro˙ o]lo˙}RvPuRv]vRv]}XTR }v E vo C vl B ]vv}u}} .voo˙]]}o]˙}}}]vSuU ]RR]v]`]ooX TR }(R]lL` vR.vooo}(R}o]˙o]lo˙}R }vo˙ uo ]o ]( vuv }oo (R P]vRl}}(PR}+]vuvX

44 22 0 January

March

May

July

2019

2020

2021

September

November

2022

S}PBo}}uPUK]PvP]vl

Woo}vl}n T}}((}Pv~M Fill level of natural gas reserves in Germany 100%

80%

60%

40%

20%

0

03/22

09/22

06/22 2022

average 2017-2021

lowest level

12/22 highest level

S}PGIv(}E UK]PvP]vl

vE R]PR]vG}vUvo}`P}`RMn C}vvuoo}o˙}u] Bloomberg estimates for growth and inflation in the Eurozone, annual rate G}`R

IvG}v

3.5%

8%

7%

3.0%

6%

2.5%

5% 2.0%

4% 1.5%

3% 1.0%

2%

0.5%

1%

0

0

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q4 23

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q4 23

S}PBo}}uPUK]PvP]vl Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

7

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N}(}uRIvuvC}uu]'

In spite of macroeconomic and geopolitical risks (and thanks to the energy sector), earnings expectations are soaring on equity markets. The contrast to the reality of stock prices couldn’t be starker. However, an earnings correction will definitely take place.

The only question is: by how much?

A Aoo}}v M}v]} r

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USA

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Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

]}]vUvo]vP}vR}o}}o oo(}uRv]ovo˙]XM}}U uoo}(R]o]v˙r}rX ]v}u˙}}v]}}vv.}(}`v]vP S]v]vG}v ]˘}]vuvR the yellow precious metal – namely as a hedge against ovP]vRu}vvP]l}}v}u] ]}vX G}o] P}}R}o ]v] ]˙vRo]l}(]}vUR˙]o˘ ooX u˙o˙R]vUo(}R]˙oXIvR USAUR]u]vP`}o.`]RRR]}]o'vU v] C P}E o}`]˙ o](}vuRRUSFoR`]oo • UR E lUSDPv` A }`v`Rlv}lR o˙R}u}}o}`]v v˘˙U UR E lUSD˘RvP}]o}`oo]v˙ Rulvo˙v]vPXTRu]vP ]v Jo˙X Ov} `v `}R oRv }v US `}ou}vo(}}E U`RR}E }oo(}uXTR]vr]+voU`R]R vvo C vl B R}vo˙ ivo˙v R]vP}`v}XævP}]vRR} u]R]lXvE R}PR]vuvrP}v v}(RUu]vR]PP]R]v oov}}+]vPo˙˙]o ' ˙U the euro’s downtrend and looks set to tend to widen cially not when real-interest-rate aspects are factored (R ]v R vuX TR} ]˙ ]v˘v ]vU R˙ }o }}v }u u}v.]o P]v ]o˙ov]v}R}Rv˙U (}}}o]} ]].}v vR(}R}o v} RRv[RoR} uR}X H}`U o}vP~o˙v`]PRXMv`R]oU}v vo }o }]( ul˘}v `]R o}`]vP Rul}v]vP } u}v˙r}o]˙ u]l˙ R US Fo `]RR]PR]vU]vR}v}u] R}uX v]}U]]vR]Puvo]lo˙}`] - • GBPlUSDP S}]vP ]vG}vUo˙}v}u] P}`R v(RU}}vR}oR}o}+}vP]vPR} and a near-certain forthcoming recession – further }v`]R}RRv(}v}`X ]vrR]l˙Rvl B }(vPov E `]ooo]lo˙} o]'o i }RvPR]v` ] ]uu]v ov A P]D ]v}uu}] ]`]oo~L}] B J}Rv}vX [ TRu} • TR u}vvP ]l}}v}u]]˙ ]v R USA u]˘u]v}˘](}R]R B }vUv(}R v}E vR}vP US }ooRv u]vPv˙]}v(}o]vPo]lo˙} G]vv`lo} }v}uu}]˙ ulU }}vo˙u}˙X `R]RRo]v]Pv].vo˙}}(}v • UR E lCHFPTR(}˘]vRo]}( ]vR}(JvX}]o C vvu}(P] M}vRo˙MlM}v]}RRUR E lCHF˘RvP oo}uu}]]vu]'vo˙ool}} `}o}}v}}o}`]˙]lo˙u below price levels seen prior to the outbreak of the o]˙XTR}ovPo˙]o}`R]˙R} u}vG]]vUl]vXTR]}(P}oRo} o}P]oo˙]u}voo]vJo˙Uv]v}`ulR o}ooo}(]]vPo]vXTR .]voo ]vRv}(}vX IvG }v ]v (v uvP[ (}]}v v }v]+vovRS`]N}vovl B [o ov}o}`(}uP}oTF E `}v u}v˙}o]˙vP]}v}˘R(v indicators of waning investor interest in the precious }vPRv(R]vRu]uuXM uoXTRP}o]}(}u}o}` ]vu}(R]vP}`]˙URS`](v] USDU}vXG}o]`oo}R ((}u}oX

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CR]vRS}o]PR TR]˙ul]o]vP]v]}Yn Qv.vG}}(}}v}u]]˙} Average performance of the S&P 500 before and after US recessions 120

115

110

105

100

95

90

85 -12

-11

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

10

11

12

M}vR (}nM}vR Monate davor L| Monate danach

S}PBo}}uPUK]PvP]vl

Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

9

TRu]vF}

P]˙]Rv`o]˙(}R}

The internal value of the euro isn’t all that’s melting away at the moment like an ice cube in the sun in the face of soaring inflation rates. Its external value is also on a continual decline against the major alternative currencies (which is additionally worsening the inflation problem). Parity is the new reality for the European common currency. The causes behind its value depreciation have been largely self-inflicted, and a trend reversal is not in sight for the time being.

TRv`o]˙ F}u oL}o}`]PRXv˙}v A `R}]l]vP Ri}˙}(R}lUS}oo}}lS`](v ˘RvPR˙v i]l v the same corner of his or her monitor screen because parity has become the new reality for both currency ]U v ] R Rv uR }}v Rv u} (}˘ vo˙ ˘X vE } }`v o˙ ]R v }v R UR E lCHF ˘RvP vP l to November of last year has now been overtaken by o]˙(Rv`R}PRXTRUR E lUSD˘RvP R ouu ]vu]'vo˙ ˙ } 9A v RUR E lCHF}R(oov˙u}RvæA9]vR }(R]˙o}vX

R]l~]v}(Rær]r}]vR]lRRBCE R oPR v u} } R ˘X vE RS`]N}vovl B ~SNB}}l`]L}v v ] (`oo } ]}ro}` vP}o]˙ ~WXæA9l ]v JvX S}U ]v R `l}( RBCE R]lU R } u]v R o ' ui} v˙}R]v}E vPo˙`}o`]~`]RR ˘}v }( R Jv ˙v (}u v ]vr U ]oo˙ `Rv ]vG}v ] lv ]v} }vX TR o ]vr ]+vo `v R S`] (v v R} ~S`] v}u]vo ]v u]v S`] ]vG}v u]v }}v E v}u]vo ]v u]v}}v E IvG}v]oo˙]l]vPU (}˘uo W ]}`}˘]uo˙ ævP }]v~JRu}uvX

-

-

-

Ivr]vPY Increasingly divergent monetary policies have been one Yvo(r]vG]}ou of the biggest causes of the euro’s weakness in recent ]B ]vr v ]vG}v ]+voU R u}vRX TR US Fo RRo˙]] ] oR} }( }R (} `lv]vP R }U }o]˙˙XævP}]vR]˙]vR( vu }( Ru ]vP So(r]vG]_ }ouX TR] }(}]vP]vG}vXvA ]vR`l}(o`l[ }( R}uu }ou oo˙ ]vo R o]]vG}v]~ıX9A Uv}R}] R˙vv˙ }(o}}v E }v]R rate hike of at least 75 basis points is on the agenda for }v}u] R˙`]PR Guv˙ v Io˙ }v R R v˘ FOMC uvP }v Jo˙ X F R]uv C J - ]v vo PX R]v P]vVo]u] Pv ]˘ }u P}`oo u˙v }˙ Rv˘o}] ˙ R o}]vPR]vv}vP˙v}v}u] vl B }(vC v]R (o (v˙ v `}vX TR }}v E }˙ ] o˙ ]vP }v v vP }]vX TR }v E vo C vl B RP}(]}vXI(Pv}v[}vRP ~E}] BC (]o]˙U]v}vUvi9A ]P}}o]vu]v]uuG}`}}vU v L R] `l[]]vPo˙ oP ær]r}]v ]}v`}o]v]oXTR]vru}vvP]l }( } ]} }( PG}v ]v R }}v E X SR v]} `}o ]uvo } v˙v˙U ˙E }}vn Ov}(R(`v.}(R}[o]}v v ] ] Po˙ }vo˙ oo˙ ] ]v} R} Euro vs. US dollar and euro vs. Swiss franc Ru}uvXS}Uo}vP]R]vr(}UR }v}u] ]˙(}o]l`]P]R}(R 1.50 }`v` o`˙ X M}}U R }uu}v v˙[ 1.45 fundamentals have already deteriorated markedly as 1.40 `ooX TR }}v E [ ovU (} ˘uoU 1.35 vo˙ `vP } .] (} `} }v u}vR 1.30 ~v} o } l˙}lvP vP˙ ] (} R 1.25 .u]vXIvr}vo]] 1.20 o}`oo ]v U v (}]Pv ] ]vuv 1.15 ]vR}}v E v r˙o}`X]D (` 1.10 }] ˘}vU R } v˙ ]vo˙ 1.05 v'}vR`R}o}]v}X 1.00 0.95 2010

2012

2014

2016 EUR/USD

2018 EUR/CHF

S}PBo}}uPUK]PvP]vl 10

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

2020

2022

TR }[ ]o]˙ } }o]o ]v]o]˙ ] o} Ro˙ Ro(o (} Rv˙X ]oo˙ E ]v}˙[]v ]vPo˙uo}o`}ov]vRu]}(˙vR} v} RoovP ˙ R Ul]v }vG]U u v]vG}vvRv}}}(vv]vP v o R vP˙ v]}vU ] } }vo˙u'}(uvov]}v`v}]ov }o]ooo}R(u}}vo˙UR R}(}} vv]u]˙ `v}v E Uv]}v uu} uoU v R v]˙ }( R v˙v}v}u]}u]v}}vP]vX TRo]]}(P}vuv]vIo˙}v}˘o˙ ]o}v.v]vR]}v˘Uv]uou]`} }( R (vuvo }ou oP]vP R }P R }v}u]]Pv`vR}}v E uu vRP}`]vPu}v]v}(XTRuo ](}R}BCE }vi˙v}Rv`vr ]]}}oooSvu]]}v}}v]vuv_ ~TPI]o}o]˙uvP]v}((}]vP}o o˙}v]o]]vPRo}(R}X]D R]v` }}oU BCE }8]o `]oo o]lo˙ R ]8o˙ ]]vP R }o]˙ oo ]Pv].vo˙ } 9A ]v R RXB](]]Ro˙}]o}]vo˙]]v ]vR}}v E }R]PRoo}} o]o}v]}v}R}vv(}Ro] P}(R}v]}vR}Rv]R˙U]v the longer term this would cement the euro’s status as o}`r]vv˙vRS}Lv˙_ RuuX CRvo}v}v[Ro TRu]v]vP}}u]voP]uo˙]`} }] (} }v R }uu}v v˙ [] R u}uvXIvu}(R]vP}`]˙UR} ] v}` ~]Pv].vo˙ voU o R }] US }ooX M}}U R }[}`vv is so well established by now that many speculators v}` R}vP R } v R v˙ ] R v]oo˙ S}}oX_ B oR}PR R o `} }]v }o l u}˙ uv v˙ uU R Rv Puv } v} o˙ v (}v }v (} ]vo v (} R 'X TR } o}}l } (}u }}o˙ . P]v R Pv l ]v R u]u uU v ]( ]}v ]v R USAu}R(}uu]l}P]uo]˙XI`}o l]vR(o(vU`R]R}o }u o]˙ ˙ o˙ v v]} }( v}r]u}o u}v˙ }o]˙ } ˙ R FU }vo} }}˙X

B'}+]v(RvM AP]v R S`] (vU R}`U R Ro˙ v˙ o] v]} R `}o P] }v } ˘ }ul ˙ R } ]v R u]u uX TR SNB proved its independence again this year and demon] (} }v R (v[]o]˙X TR SNB o]lo˙ `]oo }vv } o˙ R (v ]v R u}vR R }}o (} u]PvP ]vG}vU } }vP (v ] vo˙ ]v R SNB[ ]vX TR }v `]R R } }ov[ lX TR (v o}}l to stay strong on the back of these monetary-policy ]uv v S`]ov[ ' vo˙]vP u}}v}u]}v]}v~XPXvuPovP˙ ]vv]v ]v S`]ovU (} ˘uoV u]u } o}vPuP]vR]PRvr}v o v o}`o]UvREURlCHF˘RvPo}}l v } v (R }R`X I R(} may make sense for investors who have the euro as R] (v v˙ } R]vl R] v˙ ˘ }v}i]](v XWR}v]v the idea of doing that should be aware that alongside R S`] C}v(}vU R P]v]o]˙ }( L]Rv ]v o]l`] v. (}u R ]o]˙ }( R S`] (vv}+R}}(}R vP}}}X

Learn more about the advantages of the Liechtenstein financial center

Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

11

`}`v D PP]vl]vP B }v C

Ov]vG}vv]vG}v˘}v

Rampant inflation continues to etch worry lines onto the foreheads of consumers and investors as the latter watch the purchasing power of their assets rapidly get eroded.

However, temporarily skyrocketing inflation rates should not be projected into the future.

Market- and survey-based inflation expectations are still well-anchored and give reason to anticipate that real returns will stay positive in the long run.

Iv(o ]}v v o v H]PR U R]PR W ]v(o ]}v R v v]vP ` ]v v u}vR U R}}]vP vo˙ [ v v o vl [ ˘ ]}v `]R v vv˙ Po ]˙X Inflation is relevant not just for weekly shopping trips } R u l } (} ˙} v˘ v P˙ ]oo U also has to be taken into account in financial investuv X B ]( v]v } [}i ] ] } o preserve or even increase the real purchasing power }( R] } R U Rv R v }v R] } R } (}o]} u ~ R o ˘ R }( ]v(o ]}v X B `R ]v(o ]}v R}o ( } ]v} }v [ }v]vP M I `}o u] l U ]v v˙ U } ˘ }o R v } rR]PR ]v(o ]}v vu ]v} R ( X D ]P u R ]v(o ]}v from a current bond yield or a projected stock-market return and accordingly imply a deeply negative real return are therefore misleading even though R˙ Po o˙ P o]R ]v R ~}]o u ] X TR [ R vv o ]v(o ]}v U `R]R }u pares the current price of a basket of goods with its ] `o u}vR P}U ] v} P}} ]v] } }( o ( ]v(o ]}v U ]oo˙ v} ]v ]u }( u } ]o˙ l˙}l]vP ]v(o ]}v X TR] ] ] v ˙ o}}l R ]v }R R USA v E } X Iv R o˙ ı ı U l vv o ]v(o ]}v }( X A9 ]v

OvR]vl}(Rv˘ln N}P}}]v(}v}i}v Inflation and 10-year averages, example USA

10%

Peak?

8% Peak @ 6.3%

6%

Peak @ 5.6% 4%

2% Ø 10 years: 2.9% (S&P 500: 17.7%)

0

-2% Ø 10 years: 1.6% (S&P 500: 11.2%)

-4% 1985

1990

1995

2000

2005

2010

S}PBo}}uPUK]PvP]vl

12

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

2015

2020

R USA U X A9 ]v G uv˙ v X A9 ]v S`] ov were actually followed by a decade of much lower ]v(o ]}v ]v R} }v ] P]vP } } X ıA9 U X A9 v X A9 U ] o˙X TR o ]v(o ]}v l ]v l o ]u]o ] P ]vv o }( æ X A9 U X A9 v X A9 U ] o˙U ]v R USA U G uv˙ v S`] ov ` (}oo}` ˙ P v v o ]v(o ]}v ]vP }( X A9 U X A9 v A9 (} R v˘ v ˙ X R o] o v (} v ]v } ]v R } }v]vP ]˙ u l ~ v ˙ R S P æ U D A X U SMI ]v] ` R }v] ently well in positive territory in both nominal and o u } v r˙ ]} X TR USA[ S P æ ]v ˘ U (} ˘uo U o] v P vv o v}u]vo v }( }˘]u o˙ X A9 v v P ˙ o˙ o v }( }v ı X A9 (} R ]} (}u Jo˙ } Jo˙ ~( } ]vP R l ]v(o ]}v }( æ X A9 X I R (} ul o] o v also today to use the currently observable inflation }( o} } A9 ~˘ ]v S`] ov ] (} ]]vP o v ˘ ]}v (} ]v]] o o } u]˘ } (}o]} X

TR o v ] ~ B `R }R `˙ R } }u `]R R S]PR _ ~o}vP r u ]v(o ]}v ˘ ]}v (} o}vP ]v uv R}]}v v } }v]vP o}vP r u ˘ v (} M Ov `˙ ] } }uo˘ statistical models with a multitude of (economic) ] o } }u v ]v(o ]}v (} X TR }u puting power of today’s computers places practically v} o]u] }v `R ˙} v } R X H}` U R]PR }uo˘]˙ } v [ v ]o˙ P v } u} o X A } ]vP } `}l]vP (}u R E } v C v o B vl U u lr v ˙r u (} ]u ]vP ]v(o ]}v ˘ pectations have significantly greater reliability and ]} ] ] }`X S ˙r ]v(o ]}v ˘ ]}v v ] (}u }oo }( (]vv]o ˘ } }v u X TR S ˙ }( P}( ]}vo F} U `R]R ` ]v]] ]v R USA ]v ı v R v }v }v o˙ ] ˙ R F o R B vl }( PR]o oR] ]v ı ı U ] considered to be arguably the oldest regularly con}oo }( u } }v}u] X TR E C B R v conducting a similar survey of financial pros for the E }}v ]v R u R˙Ru ]v ı ı ı X L}}l]vP at the surveys conducted by the world’s two biggest v o vl ]v R }v }( U }v v} ] ]l]vP ](( v ` v (]vv]o ˘ [ o}vP r u ]v(o ]}v ˘ ]}v v R v o˙ } o r]P] v ]v(o ]}v ]v R USA v R E }}v X A } ]vP } R} ˙ U v P v v o]v(o ]}v }( X A9] ˘ ]v R USA} R v˘ (] ˙ ~}u } R Jv ]vP }( ı X A9 v }( X A9 ] ˘ (} R E } }v } R v˘ (} ˙ ~}u } R o ]vP }( X A9 X TR E C B `}l]vP ] } attests good informative value and predictive power } R S ˙ }( P}( ]}vo F} ]v(o ]}v }oo X I ` l U R}PR U ] ] o}` ( v˙ `]R i (} }]v ˙ X An even better alternative way to derive inflation ˘ ]}v ] } u l r u } } } X F] r˙ U (] r˙ ~ æ˙ æ˙ ]v(o ]}v ` R o]R Ru o vRu l R X TR] measure first gained widespread attention at the vv o u ]vP }( v o vl ]v J l}v H}o ]v U `Rv Rv rE C B P ] v M ]} D PR] ˘ plicitly cited the overly low 5y5y inflation swap rate }v (} R v ]vP }( u}v ˙ }o]˙X TR æ˙ æ˙ ]v(o ]}v ` ˘ R (] vv]o u l [ ]u }( ˘ P ]v(o tion over the five-year period that begins five years (}u } ˙X I ] ] (}u (] r˙ v v r˙ ]v(o ]}v ( X TR æ˙ æ˙ ]v(o ]}v ` ] R }v o v ]}v U (o u l ]] v [ ˘ ]}v S]v o ]u _ v ] ]o o }v ]o˙ ] X C v æ˙ æ˙ ]v(o ]}v ` o o}vP r u ]v(o ]}v ˘ ]}v }v X æA9 (} R USA v }˘]u o˙ A9 (} R E }}v X

Although those figures have risen significantly since R }}v ] R}l ]v M R U R˙ }vo˙ o]PRo˙ } R P (} R o v ˙ X M} } U v r u ]v(o ]}v ˘ ]}v R moderated a bit as a result of the recent pullback in commodity prices and in view of slowing economic ]]˙X TR˙ o u]v ]v }u(} o v (u]o] vP (}u v ]v } [ ] X TR˙U o v} o U R o} ]v ] }v(] v R positive real return can continue to be earned over R v˘ (] } v ˙ `]R `oo rR}PR r} ]v uv P˙X

Iv(u]o]o]un Mlr]vG}v˘}v~oo`oorvR} 5y5y inflation swap rates 4%

3%

2%

1%

0 2006

2010

2014 USD

2018

2022

EUR

S}PBo}}uPUK]PvP]vl

BCE W}l]vP P •æP IvG}v (}P A ulrv˙ru]v(}uM

Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

13

TRBlPP oA Pv

P(}uv

as of 31 July 2022

Asset class

YTD

CR

M}vR

-0.3% -0.3% -0.3% -0.3%

CHF

-0.2% -0.2% -0.2% -0.2%

UR E

0.7% 0.7% 0.7% 0.7%

USD

1 Year

3 Years

X A9

r X A9

rXıA9

X A9

r X9A

rX9A

X A9

X9A

XA9

0 000

F]˘Iv}u -6.8% -6.8% -6.8% -6.8%

S}]Pv}v Corporate bonds

-0.3% -0.2%

-13.1% -13.1% -13.1% -13.1%

0.7% 0.7% 0.7% 0.7% 0.7%

Microfinance Inflation-linked bonds

-6.8% -8.0% -8.0% -8.0% -8.0%

H]PRr˙]o }v uP]vP E rul}v

0

-8.0% -8.0% -8.0% -8.0%

-18.2% -18.2% -18.2% -18.2%

-13.1% 0.7% 0.2% 0.2% 0.2% 0.2%

S`] ov

-11.7% -11.7% -11.7% -11.7% 0.2%

-16.5%-12.7% -12.7% -12.7% -12.7% 0

UK USA uP]vP E ul

-19.3% -19.3% -19.3% -19.3%

A o v]

rX9A

X A9

XæA9

rX9A

XA9

r æX A9

X9A

X A9

rX9A

X9A

X9A

rX9A

X A9

XæA9

X9A

X9A

rX9A

X A9

rX9A

r X A9

X9A

XæA9

æ X A9

rX9A

rX9A

XıA9

r XæA9

0 00 00

-10.1% -10.1% -10.1% -10.1%

-3.5%

-6.2% -6.2% -6.2% -6.2% -10.1% -4.6% -10.1% -10.1% -10.1%

rXA9

ıX9A

r X A9

ıX9A

22.8%

rXæA9 XæA9

-12.1%

GBPlUSD

X A9

rıX9A

X A9

rX9A

-12.1% -12.1% -12.1% -12.1%

C v] UR E lCHF

22.8% 22.8% 22.8% 22.8%

-3.5% -3.5% -3.5% -3.5%

-4.6% -4.6% -4.6% -4.6%

EUR lUSD

r XıA9

0 000 5.5%

-19.3%

X A9

X A9

ıX9A

-14.0%

HP(v

X9A

rX9A

Commodities Ro S`]ov

5.5% 5.5% 5.5% 5.5%

-11.7% -14.0% -14.0% -14.0% -14.0% -12.4% -12.7%

G}o

X A9 r X A9

00 00

-12.4% -12.4% -12.4% -12.4%

}E

X A9 XıA9

X A9

-8.0% -18.2%

Go}o

r X A9 r X A9

XæA9

-8.0%

-16.5% -16.5% -16.5% -16.5%

r X A9 ræX9A

X A9

Insurance-linked bonds Convertible bonds E ]]

X9A X9A

r X9A

rXıA9

rX9A

rıXæA9

rX9A

rXæA9

X9A

0

Ov}APv

-10.1%

-6.2%

APæPIvv}vo˙BD Mv˙R]vPP«vPu}˘v]W]voXA}vro]]v}(R]˙ [Ol }(]vMv]R`]oo}`vEURXvEURXU}væA9u}RvRo (o]vıXTR]vRo]vo]lo˙}(]v}(RR]vR(}uovP Ivv}vo˙BD }vR.F]˙}(APX -10.1%

APæPL]Rv]v[v}voR}o]˙ L]Rv]v`]oouovP}o˙R]˙}vAu}v˙D XALROVID C rı vu](}L]Rv]v[v}voR}o]˙o}v}Ro]vu}].(}uRo `}˙U]}voouvo]lR]P(}ol(ov.`}l˘R]]}v`]ooul }ulR]˙X SuæPL}˙D Ovoo}vP`lvRR}]vRu}v]vUv}vT˙l}R}8~}R}u }8XL}˙D ulRv}(uuvRo]vP}v]vN}RAu]XA]˙}v R.vv]ouloo˙o}]lP]vLL}˙D X

14

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

-

Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

15

Notes

Y}]vPv}

16

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

Kaiser Partner Privatbank AG | Monthly Market Monitor - August 2022

17

TR]}uv}v]v]R(]vv]ovo˙]v}v]uvXI] ]vv }oo˙ (} ]v(}u]}vo }X N}v }( R ]v(}u]}v }v]v R]v}v]}o]]]}v }}uuv]}v˙ K]PvP]vl GA }R}oo(]vv]o]vuv}}lv˙}R]}vP]vP v˙(]vv]o]vuvXFRu}UR]v(}u]}v}v]vR]v}v} }v]]vuv]Xv˙ A (v]vR]}uv(}uv } v} Pv }( }]] ((}uvX K] Pv P]vl GA u v} o]]o]˙ (} R }uovU }v } vv }( the information contained herein or for any losses or damages arising from any ]}vlv}vR]}(R]v(}u]}v]vR]}uvXoo A }vv}(R] }uv}˙]vooo}˙o`U]oo˙˙}˙]PRo`X The reprinting or reproduction of all or any parts of this document in any way or (}u(}o]}}uu]o}]˘o˙}R]]vo]}`]v }vvRv˘o]]o˙Pv˙K]PvP]vlGA X

18

Monthly Market Monitor - August 2022 | Kaiser Partner Privatbank AG

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