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Daily Macroeconomic Digest

Freitag 07 August
Stronger than expected US non-farm payrolls

US: Non-farm payrolls (July): 1800k vs 1480k expected (prior: 4800k)

  • Unemployment rate has fallen from 11.1% to 10.2% (10.6% expected)
  • Better than expected job creations, even lower than the past month.
  • Creations were still strong in services (1423 k after 4222 k prior month): leisure-hospitality (592 k), public sector (301 k), retail (258 k). Creations were modest but positive on construction and manufacturing (20-26 k range).
  • Alternative measures on unemployment rates have decreased: U6 from 18% to 16.5%.
  • Hours worked were quite stable (34.5 after 34.6); wage growth remained on a 4.8% y/y trend.
  • Finally, the "strong numbers" mentioned by Trump, which is positive for the underlying economic recovery but less so for ongoing fiscal negotiations at Congress.


Germany: Trade Balance (June): 15.6bn EUR vs 11.3bn expected (prior: 7bn revised from 7.1bn)

  • Current account: EUR 22.4 bn after 7 bn the prior month.
  • Exports: 14.9% m/m after 8.9% m/m the prior month; imports: 7% m/m after 3.6% m/m the prior month.
  • Export growth is gaining more traction, refueling orders in industry.


Germany: Industrial production (June): 8.9% m/m vs 8.2% expected (prior: 7.4% revised from 7.8%)

  • A second month of a strong rebound in production of capital goods. Rebound has accelerated in the other sectors, notably the consumer goods.
  • Total production index remained well below its March-Feb level.


France: Industrial production (June): 12.7% m/m vs 8.4% expected (prior: 19.9% revised from 19.6%)

  • Manufacturing production was up by 14.4% m/m after 22.2% m/m the prior month.
  • The rebound was once again driven by auto and also by activity in refinery over the past two months.


Spain: Industrial production (June): 14% m/m vs 10% expected (prior: 14.3% revised from 14.7%)

  • A second month of strong recovery in industrial activity; the rebound was mainly driven by capital goods and the auto sector, but production momentum was also sustained in the other sectors.
  • Total index of production was higher than its March level, but below the Feb. level.


Norway: Industrial production (June): -2.2% m/m (prior: -0.9% revised from -1%)

  • Manufacturing production was up by 0.4% m/m after -3% m/m the prior month.
  • Only chemical and ships-oil platforms sectors have shown growth in production over the month.


Brazil: CPI (July): 0.36% m/m vs 0.35% expected (prior: 0.26%)

  • Trend has slightly accelerated from 2.13% y/y the prior month to 2.31% y/y.
  • Prices of transport, housing and energy have rebounded over the month.


Donnerstag 06 August
Lower US weekly jobless claims; BoE on hold

US: Initial jobless claims (Aug.1): 1186k vs 1400k expected (prior: 1435k revised from 1434k)

  • Continuing claims: 16107 k vs 16900 k expected (16951 k past week).
  • Weekly figures have improved more than expected, after several weeks of deterioration; this put pressure on Congress on long and tough negotiations regarding unemployment benefits.


UK: BoE left unchanged its monetary policy

  • Interest rates remained at 0.1% and asset purchase programs remained at GBP 745 bn.
  • Views on economy remained cautious on 2020 developments due to uncertainties on COVID cases; GDP should contract by 9.5% and unemployment rate to increase to 7.5% at year end.
  • The views on 2021 remained positive, in favor of a V-shape recovery (GDP up by 9%, driven by strong rebound in domestic demand), while unemployment rate should decrease moderately to 6%. Inflation is expected to regain from 0.25% (low pace due cuts in TVA in H2-20) to 1.75% end 2021.
  • While cautiousness looks justified on ongoing fragile recovery, the 2021 BoE's scenario looks too optimistic without any further support from the economic policy.


Germany: Factory orders (June): 27.9% m/m vs 10.1% expected (prior: 10.4%)

  • Rebound in orders has been driven by strong figures for capital goods (45.7% m/m), showing second month of sustained growth.
  • Domestic orders were more sustained than foreign orders, but both gained further traction after past month rebound; orders for consumer goods seemed to lag the overall rebound in orders.


Italy: Industrial production (June): 8.2% m/m vs 5% expected (prior: 41.6% revised from 42.1%)

  • A second month of rebound in industrial activity, again driven by durable consumer goods (up by 39.6% m/m). Rebound of activity in other sectors was in line with global index rebound.


Brazil: Unemployment rate (June): 13.3% vs 13.2% expected (prior: 12.9%)

  • Trend in unemployment rate continued to rise.
Mittwoch 05 August
US: rebounding business sentiment in services, but disappointing job creations (ADP survey)

US: ADP Employment change (July): 167k vs 1200k expected (prior: 4314k revised from 2369k)

  • Job creations came significantly lower than expected after past month data were revised up.
  • Services and large companies have hired more people over the month, while employment has contracted in medium-sized firms.
  • After strong recovery, labor data have turned less positive pointing towards potential disappointment on Friday non-farm payrolls (1.5m job creations expected by consensus).


US: Trade balance (June): -50.7 bn USD vs -50.2 bn expected (prior: -54.8 bn revised from -54.6 bn)

  • Exports were up by 9.4% m/m, while imports were up by only 4.7% m/m, leading to a lower monthly trade deficit.
  • The rebound in exports was mainly driven by autos.


US: Markit Services PMI (July): 50 vs 49.6 expected (prior: 47.9)

  • Sentiment on services were slightly better than in the first estimate. Activity has recovered from the lockdown, but new orders and foreign orders remained weak; uncertainties on future demand are related to new rise in social distancing on some sectors and regions.


US: ISM Non-manufacturing (July): 58.1 vs 55 expected (prior: 57.1)

  • Sentiment has gained further, driven up by rising activity, backlog of orders and new orders; on the opposite, sentiment on new export orders and on imports has moderated after initial rebound past month.
  • Sentiment on employment remained low: it has moderated after modest rebound past month; in addition to weak ADP survey, subcomponents of business confidence on employment also fuel downside risks to non-farm payrolls.


UK: PMI Services (July): 56.5 vs 56.6 expected (prior: 47.1)

  • Sentiment has strongly rebounded (well above the 50 mark), but just below expectations and first estimate.
  • New business has regained thanks to the reopening of the economy, but sentiment on employment remained low.


Eurozone: PMI Services (July): 54.7 vs 55.1 expected (prior: 48.3)

  • Sentiment has strongly rebounded but slightly less than estimated previously.
  • Final data were slightly weaker than in first estimates in France (57.3 vs 57.8), Germany (55.6 vs 56.7), but sentiment was firmer than expected in Spain (52.8 vs 52; 49.7 the prior month) and in Italy (51.6 vs 51.4; 46.4 the prior month).
  • Ater a rebound in activity thanks to the end of the lockdown, weak foreign demand and uncertainties on future domestic demand due to rising COVID cases in some countries/regions could weigh on the pace of the ongoing recovery in August.


Eurozone: Retail sales (June): 5.7% m/m vs 6.1% expected (prior: 20.3% revised from 17.8%)

  • The rebound has continued but at a slower pace over the month.
  • Sales of autos and clothes have been sustained for another month, while the recovery has moderated in the other sectors; purchases by internet decreased by 6.8% m/m after several months of sustained growth trend.


Sweden: GDP (Q2-20): -8.6% q/q vs -8% expected (prior: -0.3%)

  • First estimate has pointed towards significant contraction, but slightly less negative than in other European countries.


Sweden: Industrial production (June): 0.7% m/m (prior: -0.3% revised from -0.4%)

  • Manufacturing production was up by 6.6% m/m and activity in services was up by 0.5% m/m.
  • Separately, industrial orders were up by 6.7% m/m after 4.6% m/m the prior month.


Russia: PMI Services (July): 58.5 vs 51 expected (prior: 47.8)

  • Sentiment has rebounded, driven by a strong rise in new business.


Brazil: PMI Services (July): 42.5 (prior: 35.9)

  • Sentiment on new business and employment has increased from prior month low.
Dienstag 04 August
US factory orders rebounded further in June

US: Factory orders (June): 6.2% m/m vs 5% expected (prior: 8%)

  • Orders were down on defense and aircraft over the month; orders for capital goods non-defense and ex-aircraft were up by 3.4% m/m after 1.5% m/m the prior month.
  • Shipments were up by 9.8% m/m after 3% m/m the prior month; inventories were up by 0.6% m/m after 0.2% m/m the prior month.
  • Final data for durable goods orders were up by 7.6% m/m vs 7.3% m/m in first estimate (15% m/m the prior month). The past two months improving orders were mainly driven by consumer and construction sectors.
  • The rebound in orders followed higher ISM data and improving trend in PMI, but data could be also dependent on future consumer confidence and purchases after the rebound seen in June-July.


Eurozone: PPI (June): 0.7% m/m vs 0.6% expected (prior: -0.6%)

  • Energy prices were up by 3.1% m/m, while core PPI were flat over the month.
  • PPIs were on a less negative yearly trend, from -5% y/y the prior month to -3.7% y/y.


Brazil: Industrial production (June): 8.9% m/m vs 7.9% expected (prior: 8.2% revised from 7%)

  • A second month of rebound in activity; all sectors have shown a strong rebound over the month.
  • Production of consumer goods was up by a strong 15.9% m/m after 15.7% m/m the prior month.


Turkey: PMI Manufacturing (July): 56.9 (prior: 53.9)

  • Sentiment has continued to rebound, thanks to a strong rise in new orders.


Turkey: CPI (July): 0.58% m/m vs 0.8% expected (prior: 1.13%)

  • Food and clothes prices were strongly down over the month, while prices in the other sectors were up by more than 1% m/m. Core prices were up by 0.83% m/m, up by 10.25%y/y.
  • Yearly trend has moderated from 12.62% y/y the prior month to 11.76 % y/y.


Montag 03 August
Firmer Eurozone PMI and US ISM business confidence

US: Markit Manufacturing PMI (July): 50.9 vs 51.3 expected (prior: 49.8)

  • Final data were below first estimate but reached 50. A more modest rebound in production than in the first estimate, and slow rebuilding of new orders, while new exports orders have marginally decreased.


US: ISM Manufacturing (July): 54.2 vs 53.6 expected (prior: 52.6)

  • Sentiment on production and new orders has strongly rebounded and seems better oriented than in the PMI index; the related sub-index on production was up to record 62 from 57.3 the prior month.
  • New export orders have also increased and were back to 50.4.
  • Employment index has modestly improved (from 42.1 the prior month to 44.3).
  • The large firms are more present in ISM survey than in the PMI index, which seem to benefit the most from the ongoing recovery. If local lockdown is back, sentiment could ease back in August.


US: Construction spending (June): -0.7% m/m vs 1% expected (prior: -1.7% revised from -2%)

  • Residential construction was down by 1.4% m/m after -3.5% m/m the prior month. Non -residential construction was also down by just 0.2% m/m.


Eurozone: PMI Manufacturing (July): 51.8 vs 51.1 expected (prior: 47.4)

  • Business sentiment has increased more than in the first estimate in all major countries (all index now above 50 in a 51-53.5 range).
  • The rebound was mainly fueled by production with the end of the lockdown; orders have just begun to slightly improve, while sentiment stayed quite negative on employment.
  • Business sentiment could evolve in a range in the next months, but some easing is possible next month due to rebound in COVID cases and some easing in demand.


Poland: PMI Manufacturing (July): 52.8 vs 50 expected (prior: 47.2)

  • A strong rebound in new orders.


UK: PMI Manufacturing (July): 53.3 vs 53.6 expected (prior: 50.1)

  • Sentiment has regained further on production and prospects of ending the lockdown; orders have rebounded for a first time, but new exports have continued to fall; employment has contracted further, while upward pressures were seen in input and output prices.


Switzerland: PMI Manufacturing (July): 49.2 vs 50 expected (prior: 41.9)

  • Sentiment has significantly rebounded on all major components from the prior month; but the index remained below 50.
  • Production index has passed above 50, while new orders improved but remained below 50.
  • Separately, PMI services has rebounded from 49.1 to 51.6, thanks to strong increase in activity, while new orders have declined after past month rebound.


Switzerland: CPI (July): -0.2% m/m vs -0.4% expected (prior: 0%)

  • Core inflation was down by 0.2% m/m after -0.1% m/m the prior month.
  • Despite a 0.5% m/m rebound in energy prices, index has contracted due to lower food, clothes and communication prices.
  • Headline (-0.9% y/y) and core inflation (-0.2% y/y) remained in negative territory, but the decline was less pronounced than past month.


Sweden: PMI Manfacturing (July): 51 vs 50.5 expected (prior: 47.6 revised from 47.3)


Norway: PMI (July): 43.3 (prior: 48.8 revised from 48.9)


Russia: PMI Manufacturing (July): 48.4 vs 50.3 expected (prior: 49.4)

  • Index on new orders has passed below 50.


Brazil: PMI Manufacturing (July): 58.2 (prior: 51.6)

  • A strong rebound in current production and rebuilding new orders.
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Analysen 31.07.2020

COVID-19: Die UBP hält Sie auf dem Laufenden

Seit dem Ausbruch des Coronavirus begleiten und unterstützen wir unsere Kunden während dieser ungewöhnlichen Zeit einer weltweiten Gesundheitskrise. Die Bank informiert Sie regelmässig über die Anpassungen ihrer Massnahmen an die von den Gesundheitsbehörden vorgegebenen Vorsichtsregeln. Ausserdem kommen unsere Experten zu Wort, welche auf die Auswirkungen der Pandemie auf die Weltwirtschaft und die Finanzmärkte eingehen.