Kaiser Partner Privatbank - Monthly Market Monitor July 2021

Monthly Market Monitor

July 2021

Table of contents

In a Nutshell

Macro Radar Taking the pulse of economic activity

Our view on the markets

04

Satellite View

06

Geopolitical heat map

07

Asset Allocation Notes from the Investment Committee

Theme in Focus

08

Here to stay? An inflation update

10

ESG: Sustainability corner Green transformation – both a challenge and an opportunity

12

The Back Page Asset classes & agenda

13 Kaiser Partner Privatbank AG | Monthly Market Monitor - July 2021

3

In a Nutshell

Our view on the markets

The Delta wave is rolling in A new, more aggressive Delta variant of the coronavirus is on the march in Europe and large swaths of the rest of the world. It’s increasingly foreseeable that COVID-19 will become endemic and that the coronavirus will lastingly trouble us in the future. But there is reason to assume that economic activity will decouple from the future evolution of the virus in the medium term. The economic upturn in 2021 is unlikely to end so soon, due in part to the ongoing fiscal stimulus.

The momentum effect A speeding train is not so easy to stop. The same goes for equity markets: an established trend must weaken first before it reverses. Strong share-price gains are usually followed by further price advances. In the wake of the MSCI World index’s more than 10% gain over the first six months of this year, stockholders statistically can anticipate a pleasing second half of 2021.

Still risk-on Continual share-price gains and credit spreads on bonds are indicating that actors on the financial markets are relatively unconcerned at the moment. Regardless of whether investment-grade or speculative-grade,

Chart of the Month More growth, more inflation – and higher interest rates?| Federal Reserve forecasts are converging with market expectations US Federal Reserve forecasts (June 2021)

Sources: US Federal Reserve, Kaiser Partner Privatbank 4

Monthly Market Monitor - July 2021 | Kaiser Partner Privatbank AG

spreads on US corporate bonds versus comparable government debt securities are currently the tightest they’ve been since the mid-2000s. Risk is hardly being compensated anymore, and risk-return tradeoff prospects are subdued. Conventional bonds should therefore tend to be underweighted in portfolios.

Inflation update Central bankers (in the USA) these days have been calling the recent high inflation rates “transitory.” Some evidence indeed suggests that inflation will settle back down in the medium term after undershooting in the year of the coronavirus and overshooting this year.

However, one shouldn’t overlook the existing longterm inflation risks.

Green transformation Our global society is arguably facing its greatest challenge ever: CO2 emissions have to be reduced, and we need to contain the devastating consequences of climate change. The urgency and costs of a green transformation are high, as a recent report by the International Energy Agency (IEA) points out, but inaction is not an option. The Herculean efforts required harbor opportunities for businesses (and investors).

The US Federal Reserve’s policy-setting meetings are especially interesting once every quarter when the 18 members of the Federal Open Market Committee submit their expectations for economic growth, unemployment, inflation and the federal funds target rate.

The infamous forecast “dot plots” and the median of all projections are then released to the public. The forecast dots moved noticeably in June compared to the March meeting. The Fed now expects to see even more economic growth and higher inflation. But even more importantly, the dot plots indicate that Fed officials foresee two quarter-point rate hikes by 2023. Back in March they were projecting a zero federal funds rate until 2024. The Fed now is thus hinting that it perhaps won’t tolerate a protracted overshooting of its inflation target forever. But a lot of time (and a number of Fed press conferences) will elapse before the end of cheap money draws nigh.

Kaiser Partner Privatbank AG | Monthly Market Monitor - July 2021

5

Macro Radar

Taking the pulse of economic activity

The coronavirus evidently is giving us only a short time to catch our breath.

Another wave of contagion appears practically inevitable. But the odds are good that adverse economic side effects will stay within reasonable limits.

Alpha succeeded by Delta The Delta wave is rolling in. With a time lag relative to the UK, the number of coronavirus infections is also resurging on the European mainland, albeit with wide regional differences. Although warmer temperatures and advanced vaccination campaigns should cause the virus to spread more slowly than in previous waves and should keep the healthcare system from becoming overstrained, it’s increasingly foreseeable that COVID-19 will become endemic. The Delta variant may be followed by other letters of the Greek alphabet, particularly during darker and colder seasons. But if the coronavirus doesn’t lastingly blindside us, there is warranted hope that economic activity will decouple from the future evolution of the virus in the medium term.

Fiscal tailwind In spite of the coronavirus contretemps, our expectation for a strong summer rebound in economic activity in Europe stands firm. Although tourism in southern Europe could suffer a renewed setback, growth momentum looks set to stay high apart from in some service sectors, as June sentiment surveys have reconfirmed. A tailwind for Spain and Italy is also likely to come from the EU recovery fund, which will soon make its first disbursements. Meanwhile, fiscal-policy support in the United States as well hasn’t run dry (yet).

The infrastructure bill promised by President Biden is taking on ever clearer contours. Even if it turns out to be “only” a USD 1.2 trillion instead of a USD 2 trillion infrastructure package, it will give the US economy another (small) boost over the next five years if it passes.

Monetary-policy tailwind | Medicine withdrawal doesn’t loom until next year Net securities purchases by G4 central banks (Fed, ECB, BoJ, BoE) in USD trillion

Interest-rate expectations US Federal Reserve officials aren’t the only ones who regularly issue a dot plot of their policy-rate forecasts. In the future, US macroeconomists will also be asked to provide their “dots” in the context of a new bimonthly survey launched in June by the Financial Times. In the inaugural survey, a majority of the 52 economists polled predicted that the federal funds rate would be two or more quarter-point steps higher than today by the end of 2023. They rated inflation the most relevant deciding factor for the Fed. Central bankers and economists evidently are thus relatively in agreement in their analyses at the moment. For the financial markets, however, the crucial factor will be not only the final interest-rate destination, but also the pathway to there.

Consensus estimates 2020

2021

2022

GDP growth (in %) Switzerland

-3.2

3.5

2.8

Eurozone

-6.8

4.5

4.2

UK

-9.9

6.7

5.4

USA

-3.5

6.6

4.1

2.3

8.5

5.5 0.5

China Inflation (in %) Switzerland

-0.7

0.4

Eurozone

0.3

1.9

1.4

UK

0.9

1.6

2.0

USA

1.3

3.5

2.5

China

2.5

1.5

2.3

Kaiser Partner Privatbank interest rates view Last

3M

12M

Key interest rates (in %) Switzerland

-0.75

→

↗

Eurozone

-0.50

→

↗

UK

0.10

→

↗

USA

0.25

→

↗

China

2.95

→

→

Switzerland

-0.23

→

→

Eurozone

-0.22

→

→

UK

0.72

→

→

USA

1.42

→

→

China

3.08

→

→

10-year yields (in %)

Sources: Bank of America, Kaiser Partner Privatbank 6

Monthly Market Monitor - July 2021 | Kaiser Partner Privatbank AG

Quellen: Bloomberg, Kaiser Partner Privatbank

Satellite View Geopolitical heat map

USA vs. China At the end of May, US President Joe Biden ordered his intelligence agencies to reopen a thorough investigation into the origin of COVID-19 in China. Meanwhile, Biden’s diplomatic coordinator for Indo-Pacific affairs proclaimed that the era of dialogue with China is officially over and has been replaced by a new paradigm of competition. These examples illustrate that six months after the change in leadership in the White House, the question of whether the Biden administration will take a hawkish or dovish stance toward China can unequivocally be answered with “hawkish.” The “cold war” between the two great powers is and remains the biggest geopolitical risk on our heat map.

The Iran challenge Following the election of hardliner Ebrahim Raisi as Iran’s new president, it appears to have become a bit more doubtful whether an agreement will soon be reached in the nuclear negotiations. Although Raisi does not reject a return to the nuclear deal in principle, it is unclear whether he is prepared to make the necessary compromises. A nuclear deal with Iran remains a foreign-policy priority for US President Joe Biden, in large part to enable him to turn his attention after-

wards more toward other challenges such as China and Russia. Scaled-back US engagement in the Persian Gulf region is bound to have repercussions, though. Israel and the Arab states are likely to form a de facto alliance to position themselves against Iran. The Middle East looks destined in the years ahead to remain a geopolitical hotspot that, from the perspective of the financial markets, could particularly cause oil-price volatility.

A green(er) German government The Green Party has lost some support in recent polls ahead of Germany’s Bundestag elections on September 26, but the probability that the Greens will co-govern in the next legislative period is still greater than 80%, in our opinion. The extent to which they will be able to push through their agenda will depend on the makeup of the coalition in which the Greens co-govern.

On the foreign policy front, the Greens advocate taking a clearer and tougher stance toward Russia and China.

With regard to Europe, meanwhile, the current trend toward a more free-spending fiscal policy would continue under a governing coalition involving the Greens.

This would likely tend to benefit the euro. Aside from that, we don’t expect the elections in Germany to have notable implications for the financial markets.

Geopolitical developments do not stop at the gates of the financial markets.

On the contrary, they have become an increasingly important influencing variable in recent years.

Our Satellite View takes a look at the major hotspots at the moment.

Kaiser Partner Privatbank AG | Monthly Market Monitor - July 2021

7

Asset Allocation

Notes from the Investment Committee

A speeding train is not so easy to stop. The same applies to equity markets, where strong shareprice gains are usually followed by further price advances. Against this backdrop, stockholders can anticipate a pleasing second half of 2021 from a statistical standpoint.

Asset Allocation Monitor -

+

-

Cash

Equities

Fixed Income

Global

Sovereign bonds

Switzerland

Corporate bonds

Europe

Microfinance

UK

Inflation-linked bonds High-yield bonds

+

USA 05/2021

Emerging markets

Emerging-market bonds

Alternative Assets

Insurance-linked bonds

Gold

Convertible bonds

Real estate

Duration

Hedge funds

Currencies

Structured products

US dollar

Private equity

Swiss franc Euro British pound

Equities: Momentum effect reflation trade. However, we have fundamentally • With a year-to-date gain of more than 14% for the seen a continual improvement in earnings projecS&P 500 index (and around 12% for the MSCI World tions for cyclical industries relative to defensive index), the performance of the equity markets has sectors. Cyclical stocks therefore look set to regain been very good so far in 2021. Now that the first upward momentum in the months ahead in step six months are in the books, data enthusiasts can with a mild uptick in bond yields. The equity market serve up some impressive statistics. The S&P 500 in Europe, where corporate earnings appear poised has gained more than 10% in the first half 27 times to rise by 50% in 2021, should benefit over proporsince 1928. In 20 of those 27 years, the US bluetionately from this. chip index continued to climb higher in the second half (by an average of 5.9 percentage points). The Scorecard + index lost more than 10% in the second half only Macro three times (in the last 50 years), and it was unable Monetary/fiscal policy to largely recoup its drawdown by the end of the Corporate earnings year only once in 1987. In short, the quintessence is Valuation that strong upward momentum usually propels susTrend tained share-price advances. An established trend Investor sentiment typically has to weaken first before it reverses. This presents good prospects for stockholders for the second half of 2021.

Fixed income: Credit spreads at new lows • The strength of the equity market in the first half of • US long-term bond yields continued to drift sidethis year owed in large part to a continuous sector ways to mildly lower in June. The yield on 10-year US and investment style rotation, which enabled difTreasury notes has dipped since March from 1.75% ferent market segments to take a breather now and to below 1.5%. This drop seems astonishing in light then without causing the overall market to suffer of the intermittent alarm over elevated inflation much. Cyclical stocks were the latest ones to take figures, but it’s not so surprising if the positioning a timeout while defensive sectors (and technology of market participants is factored into the analysis. stocks) outperformed. This recent trend is attributThey were predominantly positioned short in reable first and foremost to the pullback in long-term cent months and were betting on further declines market interest rates and the related hiccup in the in bond prices (and on further increases in yields).

8

Monthly Market Monitor - July 2021 | Kaiser Partner Privatbank AG

of monetary-policy course, real interest rates rose As so often happens, the consensus bet didn’t pan a bit in recent weeks, raising the opportunity cost out in this case. Another explanation on top of this of holding gold. The recently restrengthened US is the anticipatory nature of the market: the high indollar also put downward pressure on the price of flation rates in the second quarter were foreseeable gold. A volatile back-and-forth between USD 1,700 and ultimately already old hat when they arrived. and USD 1,900 per ounce appears to be the most The market has already looked beyond the inflation plausible scenario for gold for the third quarter. hump. But in the wake of the consolidation that has taken place, we now see renewed potential for a mild uptick in long-term market interest rates in the Currencies: Nothing new from the SNB • EUR/USD: Who will taper first, and by how much? medium term.

This question is not irrelevant at the moment for • Credit spreads, i.e. yield differentials between bonds currency traders because the answer to it could of different credit quality, have also continued to deliver the next directional impetus for the EUR/ trend downward in recent weeks. Spreads on highUSD exchange rate. A lot suggests that the Fed will grade US corporate bonds with investment-grade tighten the monetary-policy reins before the Euroratings stand at less than 90 basis points versus compean Central Bank does. In expectation of this, the parable government debt securities and thus haven’t US dollar already appreciated by more than 2% in been this tight since 2005. Meanwhile, the differenJune. In the big picture, though, the currency pair tial between high-grade and high-yield bonds no lonremains stuck in a trading range. We are keeping our ger amounts to even 2%. This means that investors neutral stance as long as the EUR/USD cross stays are hardly being compensated anymore for taking on rangebound. higher risk. The market is thus reflecting the good economic prospects for the quarters ahead, but is also • GBP/USD: The British pound also lost ground against the greenback in June. However, the Bank of Engmirroring the dearth of decent investment options land (in contrast to the ECB) looks poised to be one caused by the glut of money initiated by central banks. of the central banks that will head for a monetaryWe see only subdued risk-return tradeoff prospects policy exit comparatively soon(er). Alongside monat the moment and recommend mildly underweightetary policy, vibrant economic growth dynamics and ing conventional government and corporate bonds. the intact uptrend channel also suggest that any further dips in the GBP/USD exchange rate will remain Alternative assets: Up-and-down gold price limited in the near term.

• A glittering May for the price of gold was followed by a pitch-black June. We have thus seen the yel- • EUR/CHF: The Swiss National Bank adjusted its inflation forecast only slightly in June and sees inflation low precious metal already trace out its third proin Switzerland staying below 1% even at the start nounced swing this year. An initial downslide was of 2024. As things currently stand, one can safely followed by a subsequent ascent, but gold has reassume that negative interest rates in Switzerland cently gone downhill again. The breakout above the will outlast their tenth anniversary. The Swiss franc medium-term downtrend channel in place since Auis thus unattractive for the long term from an intergust 2020 thus turned out to be a false signal from a est-rate perspective. But this continues to apply to technical analysis perspective, which fundamentally the euro as well, so there are no reasons for major leaves a bitter aftertaste. But the fundamentals also movements in the EUR/CHF exchange rate for the explain the recent price declines. After the US Fedtime being. eral Reserve began to gird the markets for a change While equity markets have slowly but steadily risen since the start of this year, other asset classes have registered much more volatility. US lumber and Bitcoin dynamically surged near exponentially, only to both recently plummet by more than 50%. Their price trajectories depict the different stages of a typical stock-market cycle, though not over a customary period of several years, but rather over a few quarters like in a time-lapse film. After going through the emotional states of optimism, euphoria and panic, capitulation recently is likely to have been reached. This means that a retracement rally could soon be in the offing. But whether there will be a veritable depression afterwards depends on supply and demand in the housing market (for lumber) and on investor risk appetite (for Bitcoin).

Chart in the Spotlight What goes up… | …must come down US lumber and Bitcoin

Sources: Bloomberg, Kaiser Partner Privatbank Kaiser Partner Privatbank AG | Monthly Market Monitor - July 2021

9

Theme in Focus

Here to stay? An inflation update

Central bankers (in the USA) these days have been calling the recent high inflation rates “transitory.”

Some evidence indeed suggests that inflation will settle back down in the medium term after undershooting in the year of the coronavirus and overshooting this year.

However, one shouldn’t overlook the existing longterm inflation risks.

Transitory?!

Every (US) central banker appears to have added the unassuming word “transitory” to his or her vocabulary at least since this year. Because at the moment, nothing is preoccupying economists (and the financial markets) more than the question of just how “temporary” the recent elevated inflation figures are in actual fact and whether they are being caused mainly by one-off factors that central banks should largely ignore and how such effects can be distinguished from the underlying inflation trend, which must ultimately be addressed by monetary policy. Inflation rates, by the way, are raising question marks not just in the USA, where they spiked to as high as 5% in May. Inflation in the Eurozone will likewise climb this summer to unaccustomed heights well above the May level of 2%. In Germany, a year-on-year comparison of the consumer basket of goods could even put a three in front of the decimal point by August because from July onward, the very dynamic growth in economic activity and the increase in prices for products and services in heavy demand (such as vacation packages, for instance) will be joined by a positive base effect due to the temporary lowering of the value-added tax in the second half of 2020. Such a development is probably already setting off alarm bells in Germany, a country

At the peak | The price upsurge for used cars is ebbing Manheim US Used Vehicle Value Index

Sources: Bloomberg, Kaiser Partner Privatbank 10

Monthly Market Monitor - July 2021 | Kaiser Partner Privatbank AG

supersensitive to inflation. But what is to be made of the present situation, rationally speaking? Could we be facing a lasting pickup in inflation in the years ahead?

More a long-term risk…

There is, in fact, a host of reasons why inflation in the medium to long term could end up at a somewhat higher level than the one during the past decade, which saw inflation hold more (Europe) or less (USA) steady below the 2% target pursued by most central banks. These predominantly structural factors include, for example, globalization and its reversal. Under the influence of ongoing trade disputes and reinforced by experiences during the pandemic, more and more companies are repatriating their production to reduce the vulnerability of global trade chains. There are demographic developments to consider on top of that. When (wealthy) baby boomers in Western societies enter retirement in the years ahead, they will continue to consume prodigiously (even if they’re “only” spending on healthcare), but will no longer produce economic output. If the ratio of consumption to production increases, which looks destined to become a worldwide phenomenon, this could likewise fuel inflation.

The same problem – aggregate demand outstripping supply – looms because productivity growth in many industrialized countries has tended to regress in recent years. But arguably the most important reason why the risk of inflation may loom in the long run is of human doing. No central banker currently in office has ever had to deal with excessively high inflation numbers during his or her tenure – quite the contrary in fact. The US Federal Reserve, however, has now explicitly committed itself to allowing inflation to overshoot by letting economic activity and the job market overheat. An ensuing pickup in wage growth and a resulting wage-price spiral and rising (consumption) demand could generate inflation.

…than a near-term problem Although these structural inflationary forces undeniably exist, we are still a long way from a genuine overheating of economic activity (on both sides of the Atlantic). This can also be convincingly expressed in numbers, taking the USA as an example. In May of this year, there were still 4.4% fewer Americans employed than in January 2020. Meanwhile, the employment-to-population ratio in the prime working age bracket of 25- to 54-year-olds stood at 77.1%, 3.4 percentage points lower than before the outbreak of the pandemic. However, a record 48% of US companies in May reported difficulty in filling open jobs. The total number of unfilled jobs in the USA is likewise at an all-time high. The various reasons behind this labor-market conundrum range from very generous unemployment compensation to date and virus-induced school closures to a decrease in immigration from abroad and 1.5 million early retirees.

Income support payments for unemployed workers, which here and there may very well have incentivized people to stay home instead of take a new job, have already been terminated in some states and will expire completely nationwide in September.

Many of the other frictions cited above are also in fact likely to prove transitory. This means that the current bottlenecks in many sectors should ease in the quarters ahead. The same goes for various production input factors like construction lumber, steel, soybean, corn and semiconductor chip prices and for the more volatile components of the consumer basket of goods and services such as flight tickets, travel and, in particular, used cars (in the USA) – rates of price increase here look set to retreat significantly in the months ahead and are likely to even turn negative in some cases. If we strip volatile elements out of the inflation equation, as the methodologies of some regional US Federal Reserve banks allow, little remains of the specter of inflation. Inflation temperatures could ultimately also be cooled by China, where the government is already actively braking economic activity and the credit impulse is slowing markedly. This is bound to exert a damping effect not just on metal prices, but is also likely to cause a (deflationary) weakening of economic growth dynamics in the USA and Europe as well in the quarters ahead.

Although our baseline scenario does not foresee a sustained increase in inflation in the coming quarters, we think it’s possible that central banks will have to confront the issue of rising inflation later on this decade.

The “core” of core inflation… | …remains in neutral territory US inflation metrics

Far from overheated | Employment market conditions should not exert a lasting inflationary impact Employment-to-population ratio among 25- to 54-year-olds

A slowdown foretold | China’s loss of momentum will soon spread to the West China credit impulse (year-on-year change)

Sources: Bloomberg, Kaiser Partner Privatbank Kaiser Partner Privatbank AG | Monthly Market Monitor - July 2021

11

ESG: Sustainability corner

Green transformation – both a challenge and an opportunity

Our global society is arguably facing its greatest challenge ever: CO2 emissions have to be reduced, and we need to contain the devastating consequences of climate change. The urgency and costs of a green transformation are high, but inaction is not an option. And the huge efforts required also harbor opportunities.

It’s five minutes to midnight As the 2020s get going, it’s five minutes to midnight from the perspective of climate change. “Green consciousness” admittedly has expanded throughout society lately not least partly as a result of the coronavirus pandemic, and many countries have set new, more ambitious environmental targets in preparation for the UN World Climate Change Conference to be held in Glasgow in November. But far greater efforts than those are needed to reach the 2015 Paris Climate Summit goal of limiting global warming by 2050 to 2 degrees Celsius. A worldwide Herculean economic, political and social feat of strength is in fact required.

A global challenge Because even if the Paris Climate Accord targets are reached, this threatens to slow world economic activity and to disproportionately adversely affect poorer countries in particular. The largest industrialized nations will be the ones best able to deflect climate change for geographical reasons and thanks to the makeup of their economies. A study by the Swiss Re Institute states that Switzerland, Austria, Germany and the USA rank among the countries least at risk from climate change, which is likely to take the biggest toll on emerging-market countries like India, Indonesia and Thailand. Those countries are heavily affected by extreme weather events, and they have done little thus far to increase their resilience. Finally, fuel for geopolitical conflict also comes from the fact that exporters of dirty energy – a group of countries that prominently includes Saudi Arabia, Russia and Australia – will have to change their “business model” in the years ahead. Here too, political dialogue and economic cooperation and development efforts are needed, particularly in engagement with poorer natural resource-producing countries.

The price tag of CO2-neutrality An International Energy Agency (IEA) report published in May reveals just how drastic some of the necessary steps would have to be to achieve global CO2-neutrality by the middle of this century. The report states that worldwide investment in renewable sources of energy and related infrastructure would have to be increased from USD 2 trillion per annum today to USD 5 trillion p.a. by 2030. On the other hand, development of new oil, natural gas and coal fields would have to be discontinued immediately to Seizing opportunities and taking responsibility herald the end of the fossil fuel era preferably sooner In the meantime, the economic and technological rather than later. Under the scenario laid out by the challenges currently pose the comparatively smaller IEA, sales of new internal combustion obstacle to overcome. The cost of photovoltaic soengine cars would be prohibited lar modules, for example, has dropped by more than from 2035 onward, and all 85% in less than a decade and is actually even down forms of energy produc- by far more than 99% compared to the early 1980s. tion from 2040 on- Technological advancements are also where the big ward would have opportunity presented by the climate challenge to be “clean.” lies. Around half of the emissions cuts needed by The gigantic 2050 are likely to be achieved through technologies m u l t i d i m e n - that are in an early stage of development today. So, sional chal- there’s a correspondingly large market for innovative lenge facing young enterprises as well as for established, forwardus, therefore, looking “old economy” companies. Investors who cannot be position themselves accordingly can participate in o v e r s t a t e d . these growth opportunities and can thus doubly take W o r l d w i d e responsibility – by contributing to the green transforcoordination is mation not just through their daily actions (by bicyimperative and cling instead of driving a car, for instance), but also must be given through the way they invest their assets. the highest priority.

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Monthly Market Monitor - July 2021 | Kaiser Partner Privatbank AG

The Back Page Asset classes & agenda

Performance as of 30 June 2021 Asset class

YTD

Cash

-0.4 -0.4 -0.4 -0.4 -0.4 -0.3 -0.3 -0.3 -0.3 -0.3

CHF EUR USD Fixed Income

0.1 0.1 0.1 0.1 0.1

-2.3 -2.3 -2.3 -2.3 -2.3 -1.7 -1.7 -1.7 -1.7 -1.7

Sovereign bonds Corporate bonds Microfinance

0.2 0.2 0.2 0.2 0.2

Inflation-linked bonds High-yield bonds

-1.0 -1.0 -1.0 -1.0 -1.0

Emerging-market bonds Insurance-linked bonds

1 Month

1.9 1.9 1.9 1.9 1.9 3.0 3.0 3.0 3.0 3.0 2.1 2.1 2.1 2.1 2.1

Convertible bonds Equities

5.5 5.5 5.5 5.5 5.5

Global Switzerland Europe 11.3 11.3 11.3 11.3 11.3

UK US 6.5 6.5 6.5 6.5 6.5

Emerging markets Alternative assets

Real estate Switzerland Hedge funds

3.7 3.7 3.7 3.7 3.7

Currencies EUR/USD EUR/CHF GBP/USD

-2.9 -2.9 -2.9 -2.9 -2.9

-0.1%

-0.7%

-2.0%

0.0%

-0.5%

-1.2%

0.0%

0.2%

4.5%

0.5%

-1.7%

8.4%

0.2%

5.6%

20.4%

0.3%

3.2%

10.5%

0.3%

3.3%

18.9%

1.1%

13.7%

21.4%

0.9%

7.5%

22.6%

0.4%

6.2%

12.4%

2.0%

39.5%

60.1%

2.3%

36.9%

50.9%

4.9%

21.3%

46.8%

1.1%

30.2%

25.5%

0.4%

17.4%

1.1%

14.6 14.6 14.6 14.6 14.6

2.8%

41.9%

67.6%

-0.1%

38.1%

28.5%

1.8%

45.5%

8.2%

-7.2%

-0.6%

41.3%

21.1 21.1 21.1 21.1

-6.8 -6.8 -6.8 -6.8 -6.8

3 Years

14.2 14.2 14.2 14.2 14.2 14.3 14.3 14.3 14.3 14.3 15.3 15.3 15.3 15.3 15.3

Commodities Gold

1 Year

6.7 6.7 6.7 6.7 6.7

1.4 1.4 1.4 1.4 1.4 1.2 1.2 1.2 1.2 1.2

5.7%

20.2%

38.7%

0.4%

12.0%

13.2%

-3.0%

5.6%

1.5%

-0.2%

3.1%

-5.2%

-2.7%

11.5%

4.7%

On our Agenda July 11: World Population Day The world population clock will already stand at 8 billion human inhabitants of Earth in autumn 2022. World Population Day seeks to raise awareness of the challenges associated with population decline in wealthier countries and demographic growth in poorer nations.

July 23 to August 8: 2020 Summer Olympic Games Now that World Chocolate Day (July 7) has been digested, the Summer Olympic Games are set to start in Tokyo a year late and with (almost) no foreign spectators in the stadiums, like so many events these days. Those who want to experience the Games will have to watch them on television or online in the morning in Europe or at night in America.

August 1: Swiss national holiday In the midst of the COVID-19 summer doldrums, the celebration of the 730th anniversary of the Swiss Confederation is bound to be a bit more boisterous than last year’s festivities. But this year as well, shooting off fireworks is not a particularly sustainable practice. Surplus savings would be

Kaiser Partner Privatbank AG | Monthly Market Monitor - July 2021

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This document constitutes neither a financial analysis nor an advertisement. It is intended solely for informational purposes. None of the information contained herein constitutes a solicitation or recommendation by Kaiser Partner Privatbank AG to purchase or sell a financial instrument or to take any other actions regarding any financial instruments. Furthermore, the information contained herein does not constitute investment advice. Any references in this document to past performance are no guarantee of a positive future performance. Kaiser Partner Privatbank AG assumes no liability for the completeness, correctness or currentness of the information contained herein or for any losses or damages arising from any actions taken on the basis of the information in this document. All contents of this document are protected by intellectual property law, particularly by copyright law.

The reprinting or reproduction of all or any parts of this document in any way or form for public or commercial purposes is expressly prohibited unless prior written consent has been explicitly granted by Kaiser Partner Privatbank AG.

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Monthly Market Monitor - July 2021 | Kaiser Partner Privatbank AG

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