Swiss equities welcomed a new trading week in the green as the Swiss Market Index closed Monday 0.10% higher, signaling market readiness for upcoming US inflation data. Recent employment figures from the US have influenced market expectations, with ING commenting that the strong jobs data has effectively removed the likelihood of a 50 basis point rate cut from the Federal Reserve.
As the market anticipates data releases, ING notes a lack of discernible catalysts over the next three weeks that could alter the current trajectory for the dollar, suggesting instead that a consolidation of recent USD gains appears more plausible. In local economic news, Switzerland's foreign currency reserves saw an increase to 715.58 billion francs in September, up from the revised figure of 693.92 billion francs reported for August, according to data released by the Swiss National Bank.
This growth in reserves reflects ongoing financial stability and confidence in the Swiss economy. Turning to the European scene, the euro area's seasonally adjusted retail trade volume experienced a 0.2% increase month-over-month in August, a rebound following a revised flat growth in July as reported by Eurostat.
Additionally, the services production within the eurozone saw a 1% rise from June to July, following the prior month's decline of 0.8%, indicating a modest recovery in the services sector. On the corporate front, Compagnie Financière Richemont reported a gain of 2.03% after finalizing the sale of its online luxury and fashion retail business, Ynap, to the luxury multi-brand digital platform Mytheresa.
In a strategic move, the Swiss luxury goods group—known for its prestigious brands such as Cartier and Buccellati—will receive a 33% stake in Mytheresa in exchange for the Ynap business. The transaction is anticipated to close in the first half of 2025. Analysts at Bernstein viewed this sale positively, stating that it alleviates a burden for shareholders and aligns with the timeline Richemont had previously communicated to the market.
There had been expectations for either a contribution to the acquirer or capital reallocation of the asset, both of which were well-received in the recent announcement. In a different sector, Givaudan's Prigiv joint venture has commenced operations at its Fragrance Ingredients facility located in Mahad, India.
Givaudan, a prominent manufacturer of flavors, fragrances, and active cosmetic ingredients, retains a 49% stake in the joint venture, with Indian partner Privi Speciality Chemicals holding the remaining 51%. However, Givauden shares concluded the trading day down by 1.01%. Overall, market participants are closely monitoring both domestic economic indicators and corporate developments as they strive to navigate an intricate financial landscape..