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Daily Macroeconomic Digest

Freitag 29 Mai
US: fragile rebound in consumer confidence; public transfer refueled household incomes

US: Personal income (April): 10.5% m/m vs -5.9% expected (prior: -2.2% revised from -2%)

  • While compensation and wages were down by 8% m/m, the income was up by 10% m/m and the disposable income up by 12% m/m, thanks to government transfer and wage support scheme.
  • Besides falling labor wages, public transfers were a strong support in income, reducing the negative impact of rising unemployment.


US: Personal spending (April): -13.6% m/m vs -12.8% expected (prior: -6.9% revised from -7.5%)

  • With lockdown in place, purchases were heavily down in goods (-16.5% m/m) and in services (-12.2% m/m) over the month.
  • As disposable income has increased, the saving ratio has exploded from 12.7% to 33%.


US: Core PCE (April): -0.4% m/m vs -0.3% expected (prior: -0.1%)

  • Core inflation has significantly declined over the month and yearly trend has also declined from 1.7% y/y the prior month to 1% y/y.


US: Wholesale inventories (April): 0.4% m/m vs -0.7% expected (prior: -1% revised from -0.8%)

  • Excluding autos, inventories were down by 1.1% m/m.
  • Separately, inventories in the retail sector were down by 3.6% m/m in April.


US: Chicago PMI (May): 32.3 vs 40 expected (prior: 35.4)

  • Contrary to expectations, and to other business surveys, confidence has fallen again in this region dominated by the auto sector on falling production, orders and employment.


US: Consumer confidence (Michigan) (May): 72.3 vs 74 expected (prior: 71.8)

  • Sentiment has improved from the prior month but a bit less than expected and seen in the first estimate (73.7).
  • From past month, sentiment on current conditions has increased (less than in first estimate), while expectations have continued to fall (more than in the first estimate).
  • Opinions were less depressed on current income, but were more negative on business expectations and worried about unemployment.
  • Willingness to buy items has slightly regained from April but remained below March levels.
  • Inflation expectations have increased: from 2.1% y/y to 3.2% y/y at 1-yera, and from 2.5% y/y to 2.7% y/y at 5-10y.
  • Confidence has improved but remained fragile.


Eurozone: CPI estimate (May): 0.1% y/y as expected (prior: 0.4%)

  • Prices are expected to decline by 0.1% m/m on this flash estimate, still driven by lower energy prices (-1.7% m/m).
  • Core inflation is supposed to stay on a stable trend (0.9% y/y) versus lower expectations (0.8% y/y).


Eurozone: M3 (April): 8.3% y/y vs 8.2% expected (prior: 7.5%)

  • M1 growth has accelerated further from 10.4% y/y to 11.9% y/y; all monetary aggregates have shown accelerating trend, except short-term deposits.
  • Credit to the private sector has gained further, from 4.2% y/y the prior month to 4.4% y/y.


France: CPI (May): 0% m/m as expected (prior: 0%)

  • Frist estimate has pointed towards flat monthly change but still further decline in the yearly trend, from 0.4%y/y the prior month to 0.2%y/y.
  • During the month, energy prices have fallen further (-2% m/m), but food prices were up by 1.8%m/m, according to this first estimate.


France: Consumer spending (April): -20.2% m/m vs -14.7% expected (prior: -16.9% revised from -17.9%)

  • With the lockdown and good weather conditions, all sales including energy have sharply fallen for the second month. The yearly trend has further deteriorated (from -17% y/y to -34% y/y).
  • May sales should remain negative, while some relief should be seen in June data.


France: GDP (Q1-20): -5.3% q/q vs -5.8% expected (prior: -0.1%)

  • Final estimate for Q1 was slightly less negative than the first one (-5.8% q/q), thanks to less negative contribution from services (revised with more accurate data). Nevertheless, domestic demand has sharply fallen (consumption down by 5.6% q/q; private investment down by 10.5 %q/q) and net export contribution was flat due to weak exports in parallel with falling imports.
  • Moe negative figures expected for Q2-20.


France: Producer Prices (April): -2.9% m/m (prior: -1.7%)

  • Prices have declined by 4.7%y/y after -2.7% y/y the prior month, still driven by lower energy prices.


Germany: Retail sales (April): -5.3% m/m vs -12% expected (prior: -4% revised from -5.6%)

  • Sales have sharply declined in all sectors due to the lockdown period, as seen in other countries.


Italy: GDP (Q1-20): -5.3% q/q vs -4.7% expected (prior: -0.2%)

  • Downwards revisions on the Q1 GDP fall.
  • All major sectors including net exports were down in Q1, and more negative data are expected for Q2.


Switzerland: KOF (May): 53.2 vs 70 expected (prior: 59.7 revised from 63.5)

  • Business sentiment has further declined after downwards revisions to prior month data.
  • Sentiment has passed below the levels seen in 2008 (index at 60).


Brazil: GDP (Q1-20): -1.5% q/q as expected (prior: 0.5%)

  • While consumption has decreased by 2% q/q, investment was still up by 3% q/q and government spending stayed moderately positive (0.2% q/q).
  • GDP was down by 0.3% y/y in Q1 after 1.7% y/y in Q4-19.


Turkey: GDP (Q1-20): 0.6% q/q vs 0.4% expected (prior: 1.9%)

  • Activity has slowed down over the quarter, but it remained positive in all sectors, except exports; consumption stayed firmed (2.9% q/q) and government expenditure was stronger (11% q/q after 0.4% q/q in Q4-19).
  • GDP growth was up by 4.5% y/y after 6% y/y in Q4-19.
Donnerstag 28 Mai
US: sharp fall in durable goods and pending home sales; Eurozone industrial confidence slightly less negative

US: Durable goods orders (April): -17.2% m/m vs -19% expected (prior: -16.6% revised from -14.7%)

  • Orders have sharply fallen in all categories and were particularly depressed in transport.
  • Orders for capital goods non-defense ex aircraft were down by 5.8% m/m after -1.1% m/m the prior month.
  • Trade tensions and disruption in the supply chain could delay recovery in orders after the end of the lockdown and despite improving sentiment in industry.


US: Initial jobless claims (May 23): 2123k vs 2100k expected (prior: 2446k revised from 2438k)

  • Continuing claims: 21052 k after 24912 k past week.


US: GDP (Q1-20): -5% q/q vs -4.8% expected (prior: 2.1%)

  • No major changes in GDP growth estimates, except a larger fall in inventories than estimated previously leading to more negative contribution (from -0.53 pp to -1.43 pp) to Q1 GDP.
  • This has been mitigated by less negative fall in consumption (from -7.6 %q/q to -6.8% q/q), total investment (except sharper fall in equipment); net exports remained negative (-1.32 pp contribution to Q1 GDP).
  • A larger fall is expected for Q2, but Q2 GDP data will not be published before end of July.


US: Pending home sales (April): -21.8% m/m vs -17.3% expected (prior: -20.8%)

  • Sales have sharply fallen for the second month in all major districts; sales were down by 34.6% y/y after -14.5% y/y the previous month.


Eurozone: Industrial confidence (May): -27.5 vs -26.5 expected (prior: -32.5 revised from -30.4)

  • Business sentiment has slightly improved on future production and inventories, while opinions have deteriorated further on orders and exports, stayed very low on unemployment.


Eurozone: Service confidence (May): -43.6 vs -27.9 expected (prior: -38.6 revised from -35)

  • Sentiment has heavily deteriorated on current situation, while opinions on future demand and employment have slightly regained.


Eurozone: Consumer confidence (May): -18.8 as expected (prior: -22)

  • Opinions were slightly less negative on future personal financial situation and economic environment, but the opinions stayed depressed on past/current situation.


Eurozone: CPI (May): 0% m/m vs -0.1% expected (prior: 0.4%)

  • Final data confirmed the decline in headline inflation from 0.8% y/y to 0.5% y/y.


Italy: PPI (May): -3.4% m/m (prior: -1.3%)

  • The monthly fall was driven by lower energy prices (-11% m/m), while prices were mixed/weak in other sectors.
  • PPIs have declined further from -4.9% y/y to -6.7% y/y.


Spain: CPI (May): 0% m/m vs -0.1% expected (prior: 0.4%)

  • Headline inflation has declined further from -0.7% y/y the prior month to -0.9% y/y, due to lower energy prices.


Spain: Retail sales (real) (April): -31.6% y/y (prior: -14.2% revised from -14.1%)

  • A drastic fall of sales in all sectors, including a modest fall in food too.


Poland: Central banks has cut key rates from 0.50% to 0.10%

  • The economy will face a severe recession in 2020, and central bank has pledged in favor of a "whatever it takes" approach to support the activity.


Brazil: Unemployment rate (April): 12.6% vs 13.3% expected (prior: 12.2%)


Brazil: CPI (May): 0.28% m/m vs 0.14% expected (prior: 0.80%)

  • Global inflation index (consumer, producer and construction prices) has shown some moderation from the prior month.
  • At consumer level, prices have sharply declined (-0.6% m/m after 0.13% m/m the prior month), due to lower energy-transport prices; consumer prices have passed below 2% in yearly trend (from 2.63% y/y the prior month to 1.65% y/y).


Sweden: Consumer confidence (May): 77.3 (prior: 74.2 revised from 73.9)

  • Sentiment has improved on future financial situation, while concerns remained on global economic situation and unemployment.


Sweden: Manufacturing confidence (May): 76.8 (prior: 71.4 revised from 70.5)

  • Business confidence has bounced back from very depressed levels.


Sweden: Retail sales (April): 0.2% m/m vs -2.1% expected (prior: -1.5% revised from -1.7%)

  • Sales have stabilized after the large fall seen in the previous month; sales were down by 1.3% y/y after 1.1% y/y the prior month.


Mittwoch 27 Mai
Improving business confidence in France and in the US (Richmond index)

US: Richmond Fed manufacturing (May): -27 vs -40 expected (prior: -53)

  • Sentiment has improved on both current situation and on 6-month expectations; the improvement was seen in parallel in shipments, new orders, business conditions and on employment.
  • Sentiment regarding capex remained negative on current situation and it has only marginally improved in expectations.
  • These data confirmed improving signals seen in other manufacturing business surveys.


France: Business confidence (May): 59 vs 69 expected (prior: 53 revised from 62)

  • Data were lower than expected, but prior month index (April) has been sharply revised down, so that the confidence has finally regained over the month. The same process was seen to specific manufacturing sector with large downward revision to April data, and modest improvement in May.
  • In details, opinions on orders books remained depressed, but views on global and personal production have improved, while inventories were on the rise.
  • In parallel, sentiment has regained more significantly in services from the prior month than in manufacturing, while opinions have decreased further in the construction sector.


France: Consumer confidence (May): 93 vs 92 expected (prior: 95)

  • Confidence remained low (index at 104 in Jan.) and it has eroded further; unemployment is a rising concern and willingness to save has also increased in parallel.


Sweden: Unemployment rate (April): 3.6% vs 4% expected (prior: 3.5%)

  • Unemployed continued to rise at a regular pace, but labor force has turned more volatile in past months, leading to volatile unemployment ratio in the 3.5%-4% range past months.


Norway: Retail sales (April): 4.8% m/m vs -1% expected (prior: -0.9%)

  • A strong monthly rebound in non-food sales.


Dienstag 26 Mai
US consumer confidence: expectations have further rebounded


US: New home sales (April): 623k vs 480k expected (prior: 619k revised from 627k)

  • Sales have regained from past month, instead of the expected fall; sales were up in 3 over 4 major districts.
  • Inventories stayed at stable levels, while prices of houses sold have shown significant monthly (-3.4%m/m) and yearly declines (-5.4% y/y based on mean prices). In absolute terms, mean prices remained high (USD 364.5 k), but down by USD 21 k from the past year.


US: Consumer confidence (CB) (May): 86.6 vs 87 expected (prior: 85.7 revised from 86.9)

  • Sentiment has slightly improved from previous month, but previous data were revised lower on the global index and on sentiment on current situation.
  • Views on current situation have decreased further, while expectations have rebounded, even after upwards revisions to prior month data on expectations.
  • Current sentiment remained dampened by negative views on employment and on business conditions.
  • Six-months expectations have improved for the second month, but future employment remained a concern while income expectations have stabilized.
  • Plans to buy autos have increased, as well as for major appliances, while plan to buy a house has slightly eroded. Inflation expectations (12-month views) have sharply increased, from 5.4% to 6.2% y/y.
  • Labor and income will be keys in the recovery process in the next weeks/months.


US: S&P CoreLogic CS 20-City (March): 3.92% y/y vs 3.44% expected (prior: 3.52% revised from 3.47%)

  • House prices remained sustained in March.


US: House price Index MoM (FHFA) (March): 0.1% m/m (prior: 0.8%)

  • While monthly change in prices has moderated, the yearly trend remained also sustained, up by 5.9% y/y on these data.


Germany: GFK consumer confidence (June): -18.9 vs -18 expected (prior: -23.1 revised from -23.4)

  • Index has improved from past month low level but remained below expectations. Business and income expectations have improved from highly depressed level the prior month.


Switzerland: Trade balance (April): 4.04 Bn CHF (prior: 3.96Bn)

  • Real exports: -10% m/m after -3.1% m/m the prior month; real imports: -17.8% m/m after -6% m/m the prior month.
  • Trade balance has improved, but due to larger fall in imports.


Poland: Unemployment rate (April): 5.8% vs 5.7% expected (prior: 5.4%)

  • A 6.2% monthly rise in unemployed.


Brazil: CPI (May): -0.59% m/m vs -0.48% expected (prior: -0.01%)

  • Except prices of communication and household items on the rise, prices in other sectors have decreased, driven by lower energy and transport prices (-3.1% m/m).
  • Headline inflation (IPCA-15 index) has declined from 2.92% y/y to 1.96% y/y.


Brazil: Current account (April): 3840 M$ vs 3050 M$ expected (prior: 868 M$)

  • Trade surplus has increased on lower imports; Foreign direct investment has moderated from USD 1.5 bn the prior month to USD 234 M.


Montag 25 Mai
German IFO index: a rebound in expectations

Germany: IFO (May): 79.5 vs 78.5 expected (prior: 74.2 revised from 74.3)

  • While sentiment on current situation has eroded, expectations have rebounded, being just below their past February levels.
  • Sentiment was less negative in all sectors, nevertheless it remained well below Jan.-Feb. levels.
  • As seen in PMI, a progressive recovery is expected from businesses in different sectors.


Germany: GDP (Q1-20): -2.2% q/q as expected (prior: -0.1%)

  • Fall in recession has been confirmed and more details were available.
  • Consumption was down by 3.2% q/q, private investment down by 7% q/q, while public consumption was up by 0.2% q/q and construction up by a strong 4.1% q/q; exports and imports have strongly fallen, and net exports were negative, offering a -0.8 pp contribution to quarterly GDP; inventories were up by 0.3%q/q. Q2 GDP was down by 1.9% y/y after 0.2% y/y in Q4-19.
  • Despite ongoing and progressive end of the lockdown, sharper contraction is still expected in Q2.


Sweden: Unemployment rate (April): 7.9% vs 7.8% expected (prior: 6.7%)

  • Unemployed has rebounded by 60 k over the month.


Spain: PPI (April): -3% m/m (prior: -3% revised from -3.1%)

  • A sharp fall in energy prices (-9.5% m/m); PPIs were down by 8.4% y/y after -4.9% y/y the prior month.


Brazil: Consumer confidence (May): 62.1 (prior: 58.2)

  • Expectations have rebounded while sentiment on current situation has slightly decreased. The index has modestly regained from low levels (below 2015-2016).


Macro economic

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Analysen 18.05.2020

Clouds gathering on the horizon

Spotlight - We see three key risks on the horizon: secondary outbreaks in the US, rising US-China geopolitical tension and political fragmentation in the Euro area