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Daily Macroeconomic Digest

Mittwoch 19 September
Mixed housing data in the US, higher-than-expected inflation print in UK

US: Housing starts (Aug.): 1282k vs 1238k expected (prior: 1174k revised from 1168k)

  • Building permits: 1229k vs 1310k expected (prior: 1303k revised from 1311k)
  • Housing starts rose a larger-than-expected 9.2% m/m (vs 5.7% expected) while building permits fell 5.7% against expectations for a modest increase.
  • The housing market remains sound but growth is slowing.


UK: CPI (Aug.): 0.7% m/m vs 0.5% expected (prior: 0.5%)

  • CPI y/y: 2.7% vs 2.4% expected (prior: 2.5%)
  • CPI core y/y: 2.1% vs 1.8% expected (prior: 1.9%)
  • Significantly above expectations both at the headline and core levels.
  • The increase in core inflation was primarily driven by volatile components, which means that one should not put too much weight on this monthly release.


UK: PPI Output prices (Aug.): 0.2% m/m as expected (prior: 0.0%)

  • PPI output y/y: 2.9% as expected (prior: 3.1%); PPI output core: 2.1% y/y as expected (prior: 2.3%)
Dienstag 18 September
Stable NAHB housing market index

US: NAHB housing market index (Sept.): 67 vs 66 expected (prior: 67)

  • The headline index is unchanged but the current sales component increased by 1pt to 74, and the future sales expectations component increased by 2pt to 74.
  • Overall, homebuilders' confidence is slightly lower than at the start of the year but remains at solid levels.


Montag 17 September
US empire manufacturing edged down, CPI in line in Eurozone


US: Empire manufacturing (Sep): 19 vs 23 expected (prior: 25.6)

  • The decline was mainly due to shipments, which felt considerably (-11.4pt to +14.3). New orders slightly decreased (-0.6pt to 16.5) and the employment index increased (+0.2pt to +13.3).
  • Overall, the August report continues to suggest expansion in the New York region's manufacturing sector.


Eurozone: CPI estimate (Aug F): 2% y/y as expected (prior: 2.1%)

  • CPI core y/y: 1% as expected (prior: 1.1%)
  • The final breakdown for August confirmed that the decline was largely due to erratic components and doesn't suggest deterioration of underlying inflation prospects.
  • Inflation remains close to ECB's target, but core inflation remains low.
  • On the short run, the ECB should not change its planned strategy.


Turkey: Industrial production (Jul): 3.5% m/m vs -1% expected (prior: -2.1% revised from -2%)

  • On a y/y basis: 5.6% vs 1.2% expected (prior: 2.8% revised from 3.2%)
  • Intermediate goods price rose by 2.5% m/m, while energy prices increased by 2% m/m.


Freitag 14 September
US: modest rise of retail sales, but a sharp rebound of household confidence

US: Retail sales (Aug.): 0.1% m/m vs 0.4% expected (prior: 0.7% revised from 0.5%)

  • The growth pace of sales ex autos, gas and building material has slowed down from 0.8%m/m in July (revised up from 0.5% m/m) to 0.1% m/m; on a 3-month annualized view, these sales were up by 5.4% after 6.8% the prior month.
  • The slowdown over the month was due to autos, furniture and clothes; internet sales stayed dynamic (0.7% m/m).
  • After booming consumption on Q2, some moderation is expected by Q3, but growth should remain around 3%qoq.


US: Industrial production (Aug.): 0.4% m/m vs 0.3% expected (prior: 0.4% revised from 0.1%)

  • Manufacturing production has rebounded thanks to the auto sector and production of electricity.
  • Capacity utilization has increased from past month.


US: Consumer confidence (Michigan) (Sept.): 100.8 vs 96.6 expected (prior: 96.2)

  • Expectations and views on current situation have both rebounded from the prior month.
  • Sentiment on personal financial situation, economy and about "government doing a good job" has strongly rebounded and was back to its previous highs.
  • Willingness to buy large items has increased again, boding well for future consumption.


US: Business inventories (July): 0.6% m/m as expected (prior: 0.1%)

  • Inventories have increased in auto sector; sales were up by 0.2% m/m; the inventory to sales ratio has slightly increased for wholesalers and manufacturers.


Sweden: CPI (Aug.): -0.2% m/m vs 0% expected (prior: 0.5%)

  • Inflation has moderated from 2.1% y/y to 2% y/y. Core inflation was on a stable trend (2.2% y/y).


Russia: The central bank has increased its key rates from 7.25% to 7.50%

  • As inflation has come back to 4% more rapidly than expected, the central bank has surprisingly increased its key rates and said it will consider further rate hikes according to future inflation and growth developments.


Turkey: Current account (July): -1.75bn USD vs -1.8bn expected (prior: -3.04bn revised from -2.97bn)

  • Balance of services in surplus has reduced widening trade deficit on goods.
Donnerstag 13 September
Moderate US inflation; no change in BoE and ECB strategy; sharp monetary tightening in Turkey

US: Initial jobless claims (Spept. 8): 204k vs 210k expected (prior: 205k revised from 203k)

  • Continuing claims: 1696 k after 1711 k past week.


US: CPI (Aug.): 0.2% m/m vs 0.3% expected (prior: 0.2%)

  • Core CPI: 0.1 % m/m vs 0.2 % m/m; headline inflation has moderated from 2.9% y/y to 2.7% y/y and core inflation from 2.4% y/y to 2.2% y/y.
  • While energy prices have rebounded by 1.9% m/m, and rents were up by a regular 0.3% m/m (3.3% y/y), prices of apparels, medical and of leisure eased during the month.
  • Trend in inflation should continue to moderate in coming months, in absence of shocks, but staying above the 2% mark.


UK: BoE has left key rates unchanged at 0.75%.

  • The Bank remained confident on growth and a rebound is expected on Q3. Slack in the economy looks at a low level, which could generate future upside pressures on domestic costs.
  • The Bank mentioned it expects a smooth transition with the EU; a tightening bias remains in place.


Eurozone: The ECB has not changed its strategy

  • Statement on strategy has not changed: QE will be reduced from EUR 30 bn to EUR 15 bn in October and should end in Dec. if medium-term inflation outlook stays in line with ECB’s target. Interest rates should not move before Q3-19.
  • The ECB has revised down its growth outlook by 0.1 pp for 2018 and 2019 at 2% and 1.8% respectively (1.7% expected in 2020). Inflation forecasts were maintained at 1.7% for the period 2018-2020.
  • No debate about reinvestment rule or any twist operation; capital rule remains the key principle.
  • QE and Italy: QE is used to restore medium-term inflation and not to help one country or sector to secure its refinancing, said Draghi.
  • Rising risks since last meeting. The main risk is protectionism.


Turkey: Central Bank has increased its key rates from 17.75% to 24%.

  • Despite M. Erdogan called for an easing in rates, the bank has increased its rates, slightly more than consensus expectations (21%).
  • The statement from the bank justified a strong tightening due to a high inflation despite weaker demand and it mentioned this tightening will remain in place as long as inflation has not eased.


Switzerland: PPI-import prices (Aug.): 0% m/m as expected (prior: 0.1%)

  • Import prices were flat over the month; the yearly trend has moderated from 6.9% y/y to 5.7% y/y; producer prices were up by 0.1 % m/m, up by 2.2% y/y. Prices of food and of some raw materials have moderated over the month.


Sweden: GDP (Q2-18): 0.8% q/q vs 0.9% expected (prior: 0.5%)

  • Q2 estimate has been revised down from previous 1% q/q; the rebound in Q2 was mainly driven by consumption and inventories while investment and net trade were negative.


France: CPI (Aug.): 0.5% m/m vs 0.6% expected (prior: 0.6%)

  • Final data confirmed the rebound in Aug., driven by prices of clothes. Inflation was up by 2.6% y/y.


Germany: CPI (Aug.): 0% m/m as expected (prior: 0%)

  • Prices of clothes and energy were up during the month, balanced by lower education and leisure prices.


UK: RICS house price balance (Aug.): 2% as expected (prior: 4%)

  • Balance of opinions on housing has moderated after a rebound in July; outlook on prices, sales and demand has deteriorated.


Brazil: Retail sales (July): -0.5% m/m vs 0.3% expected (prior: -0.4% revised from -0.3%)

  • Trend remained negative, with some rotation across sectors; the monthly fall was fueled by clothes, personal items and furniture.
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Analysen 14.08.2018

Oil demand stays firm

WTI oil prices are down almost 10% since the beginning of July. At the beginning of August, oil prices started their longest weekly losing streak in three years. The US/China trade tensions fuelled concerns that global economic growth could slow, weakening worldwide energy demand.