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Daily Macroeconomic Digest

Freitag 03 April
US labour under contraction; weakening business sentiment in services

US: Non-farm payrolls (March): -701k vs -132k expected (prior: 274k revised from 273k)

  • Labour has deteriorated more than expected from past month, and the unemployment ratio has increased from 3.5 % the previous month to 4.4%.
  • Payrolls destruction came close to the levels seen in 2008, down by 800 k.
  • Except the public sector, jobs have decreased in all sectors; the largest fall was seen in leisure-hotels, down by 459 k versus 44 k the prior month; other large reversal in jobs seen in construction, manufacturing, trade and retail, and business services.
  • Aggregated hours worked have decreased, but still moderately (-1.1% m/m).
  • Wage growth has slowed down for average weekly earnings (-0.2%m/m; 2.2% y/y), while hourly wages remained on a stable trend (3.1% y/y).
  • The survey has not yet accounted the most recent negative developments, meaning other negative data next month and probably a more significant rise in the unemployment ratio.


US: ISM Non manufacturing (March): 52.5 vs 43 expected (prior: 57.3)

  • The index was more resilient than expected, but details pointed towards deteriorating situation: falling sentiment on activity, new exports orders and employment (all below the 50 level), while total orders have less decreased; as seen in other indices, the rise in delivery has artificially boosted the index, but it pointed to disruption in the chain supply. The index may fall further next month.


US: Markit Services PMI (March): 39.8 vs 38.5 expected (prior: 49.9)

  • A sharp decrease from past month, due to falling activity, export orders, prices and employment.


Eurozone: PMI Services (March): 26.4 vs 28.2 expected (prior: 52.6)

  • Confidence has weakened more than expected at eurozone level and in all major countries; the sharpest fall was seen in Italy (from 52.1 to 17.4).
  • With COVID-19 developments and current lockdown, sentiment has fallen on activity, orders and on employment.
  • The index is now significantly lower than in 2008 (around 39) pointing towards sharper recession.


Eurozone: Retail sales (Feb.): 0.9% m/m vs 0.1% expected (prior: 0.7% revised from 0.6%)

  • Sales were stronger than expected ahead of the quarantine, boosted by food and pharma sales; on-line sales were also on strong pace over the month.


Spain: Industrial production (Feb.): 0% m/m (prior: 0% revised from 0.2%)

  • Production has sharply fallen in capital goods and energy, while it was moderately up in consumer and intermediate goods.
  • The yearly change stayed negative (-1.3% y/y). A sharp fall is expected in March.


UK: PMI Services (March): 34.5 vs 34.8 expected (prior: 53.2)

  • A larger fall than expected due to shut down and cancelled orders; sentiment has fallen on activity, orders and employment.
  • The index is well below its 2008 level (40), pointing to even sharper recession.


Russia: PMI Services (March): 37.1 vs 45.8 expected (prior: 52)

  • Large fall in sentiment as seen in other countries.


Brazil: PMI Services (March): 37.6 (prior: 50.9)

  • With business shutdown and cancelled orders, sentiment has fallen well below the 2008 low level.


Turkey: CPI (March): 0.57% m/m vs 0.5% expected (prior: 0.35%)

  • Prices have rebounded for food and health products and driven up the monthly rise despite falling energy and communication costs.
  • The yearly trend has moderated from 12.37 % y/y to 11.86 % y/y.
Donnerstag 02 April
US initial jobless claims surging again

US: Factory orders (Feb.): 0.0% m/m vs 0.2% expected (prior: -0.5%)

  • Factory orders were flat, slightly below expectations, with core capital goods orders revised a tad lower (from -0.8% to -0.9%) from the first estimate.


US: Initial jobless claims (March 28): 6648k vs 3763k expected (prior: 3307k revised from 3283k)

  • Initial jobless claims surged for the second consecutive week.
  • With more states issuing stay-at-home orders this week, initial jobless claims could continue to rise until mid-April.
  • The official employment report to be released tomorrow (March) will not include this recent surge in claims as it only includes the 12th of the month. It is only the April's report (to be released on May 8) that will show the unemployment rate strongly rising, and very probably exceeding 10%.


US: Trade balance (Feb.): -39.6 bn USD vs -40.0 bn expected (prior: -45.5 bn revised from -45.3 bn)

  • The trade deficit narrowed in February, in line with expectations.


Switzerland: CPI (March): 0.1% m/m as expected (prior: 0.1%)

  • CPI y/y: -0.5% as expected (prior: -0.1%)
  • Annual inflation fell to the lowest level since March 2016. Core inflation fell to -0.1% y/y - in negative territory for the first time since February 2017.


Mittwoch 01 April
Manufacturing PMI: falling production, orders and employment

US: Markit Manufacturing PMI (March): 48.5 vs 48 expected (prior: 50.7)

  • Final index was slightly lower than first estimate, but less negative than today expectations.
  • The decline in business sentiment was driven by falling production due to shut down, falling demand and orders, and falling employment; the problems of supply shortage have been accounted positively, artificially boosting the total index.

US: ADP Employment change (Feb.): -27k vs -150k expected (prior: 179k revised from 183k)

  • Job losses were still limited compared to expectations, but more negative news is expected.
  • Destructions were centred on small firms and in the service sector.
  • Non-farm payrolls due next Friday should also show a reversal (-100 k expected), still limited compared to the surge in initial jobless claims.

US: ISM Manufacturing (March): 49.1 vs 44.5 expected (prior: 50.1)

  • Business sentiment was higher than expected, but the delivery problems have artificially boosted the total index, meaning the "real data" were probably closer to the 44.5 expected.
  • With shutdown in place, sentiment has fallen on all major components from the previous month; nevertheless, new orders index has fallen to 42.2, which is lower than in 2012 but still far above the below-30 level seen in 2008.
  • Negative shock is coming progressively on the manufacturing sector and further fall is on sight for April data.


UK: PMI Manufacturing (March): 47.8 vs 47 expected (prior: 52.2)

  • As seen in the US, final data were less negative than current expectations, but have shown significant fall from the previous month.
  • Falling sentiment on production, orders, exports and employment; same rise in supply delivery that support the index.


Switzerland: PMI Manufacturing (March): 43.7 vs 42.2 expected (prior: 49.5)

  • Falling sentiment due to lower production, orders and employment; artificial rise in delivery due to supply disruption.
  • The index was below 2012 levels, but still above the 2008 levels (circa 33)

Eurozone: PMI Manufacturing (March): 44.5 vs 44.6 expected (prior: 49.8)

  • Final data have confirmed the fall in sentiment from the previous month. The fall was marginally larger than expected due to sharp fall in Italy (index at 40) and in Germany (45.4).
  • The fall was driven by lower output and falling demand, with supply delivery problems. The index was below the 2012 levels, but still above the 2008 level.

Germany: Retail sales (Feb.): 1.2% m/m vs 0.1% expected (prior: 1% revised from 0.9%)

  • Sales remained sustained, thanks to food and pharma, while sales in other sectors were sharply negative over the month.

Italy: Unemployment rate (Feb.): 9.7% vs 10% expected (prior: 9.8%)

Eurozone: Unemployment rate (Feb.): 7.3% vs 7.4% expected (prior: 7.4%)


Brazil: Industrial production (Feb.): 0.5% m/m vs -0.4% expected (prior: 1.2% revised from 0.9%)

  • Production was sustained in capital and intermediate good sectors before the COVID impact.

Brazil: PMI Manufacturing (March): 48.4 (prior: 52.3)

  • Falling sentiment in production, orders and exports.


Montag 30 März
Eurozone business confidence: falling close to 2012 level

US: Pending home sales (Feb.): 2.4% m/m vs -1.8% expected (prior: 5.3% revised from 5.2%)

  • Sales remained sustained in 3 districts over 4; yearly trend has accelerated to a 12-15% y/y range for the 3 most active districts. Activity is expected to slowdown in the sector due to rising social distancing.


Eurozone: Consumer confidence (March): -11.6 as expected (prior: -6.6)

  • Sharp fall on economic environment, higher concerns on unemployment and falling willingness to buy.
  • The total index remained at relatively high level, still above the range seen in 2012-2013 (-25/-15).


Eurozone: Industrial confidence (March): -10.8 vs -12.6 expected (prior: -6.2 revised from -6.1)

  • The index has sharply fallen, entering the range seen in 2012-2013 (-17/-10); the major fall was seen on future production, while sentiment on orders and exports have relatively marginally decreased from already distressed levels.


Eurozone: Service confidence (March): -2.2 vs -5 expected (prior: 11.1 revised from 11.2)

  • All components have fallen over the month, particularly future demand; the fall in confidence was sharp in the retail sector, relatively moderate for construction.
  • The index remained above its 2012 level.


Germany: CPI (March): 0.1% m/m as expected (prior: 0.6%)

  • Preliminary data pointed towards a sharp decline in yearly trend from 1.7% y/y to 1.3% y/y; the falling trend should continue due the shutdown in some sectors and lower energy prices, but some prices (food, health) could remain firm facing sustained demand.


Spain: CPI (March): 0.7% m/m vs 1% expected (prior: -0.1%)

  • Despite monthly rebound, the yearly trend has declined from 0.9% y/y the prior month to 0.2% y/y.


Spain: Retail sales (real) (Feb.): 1.8% y/y (prior: 1.7%)

  • Sales remained firm before the COVID impact.


UK: M4 (Feb.): 4.9% y/y (prior: 4.7%)

  • M4 ex IOFC: 4.1% y/y after 5.6% y/y the prior month. M4 lending has slightly accelerated from 4.5% y/y the prior month to 5.2% y/y.


Switzerland: KOF (March): 92.9 vs 85 expected (prior: 101.8 revised from 100.9)

  • As seen in other countries, business sentiment has decreased over the month; expectations referred to 2011 lows and the index was still above, but huge downside risks are ahead.


Brazil: CPI (March): 1.24% m/m vs 1.05% expected (prior: -0.04%)

  • Composite index of prices has rebounded over the month, due to sharp rebound in producer prices, related to food and raw material prices.
  • At consumer level, prices have moderated (0.12% m/m after 0.21% m/m the prior month); a rebound in food prices has been more than compensated by declining prices in education/leisure and apparels; yearly trend has moderated from 3.67% y/y the prior month to 3.2% y/y.


Freitag 27 März
Weakening consumer confidence in the US, France and Italy

US: Consumer confidence (Michigan) (March): 89.1 vs 90 expected (prior: 95.9)

  • Final data came lower than first estimates. Both current sentiment and expectations have fallen from the past month; expectations index is at the lowest level seen during the 2016-2019 period, but it remained well above the 2012 and 2008 levels.
  • Confidence has decreased due to weakening opinions on personal financial situation, rising concerns on unemployment, and falling business expectations; willingness to buy has decreased in parallel, but relatively more for houses than for other goods.


US: Personal income (Feb.): 0.6% m/m vs 0.4% expected (prior: 0.6%)

  • Wages and real disposable income were both up by 0.5% m/m, which looks more sustained than in the past quarter.


US: Personal spending (Feb.): 0.2% m/m as expected (prior: 0.2%)

  • Spending growth was relatively moderate for the second month; over the month purchases of durable goods have contracted, while services were relatively firm (0.39% m/m).
  • The saving ratio has increased further, from 7.9% to 8.2%, which is a pretty high level.


US: Core PCE (Feb.): 0.2% m/m as expected (prior: 0.2% revised from 0.1%)

  • Trend remained on the rise: 1.8% y/y after 1.7% y/y the prior month


France: Consumer confidence (March): 103 vs 91 expected (prior: 104)

  • Sentiment has decreased less than expected (expectations from the consensus were close to 2012 level), but the survey was conducted before the containment.
  • Opinions on personal financial situation and unemployment have deteriorated over the month, but indices remained far from the levels seen in 2012 and in 2008.


Italy: Consumer confidence (March): 101 vs 100.5 expected (prior: 110.9 revised from 111.4)

  • Confidence has significantly decreased over the month related to latest COVID developments; expectations on economic outlook and financial situation have both sharply deteriorated over the month.


Italy: Manufacturing confidence (March): 89.5 vs 88 expected (prior: 98.8 revised from 100.6)

  • The confidence index has come back to its 2012 levels. A large fall in orders and in production outlook.


Sweden: Retail sales (Feb.): 0.2% m/m (prior: 0.9%)

  • Yearly trend in sales remained solid, up by 2.8% y/y.


Norway: Retail sales (Feb.): 2% m/m vs 0.5% expected (prior: 0.5%)

  • Sales in food-beverage and tobacco declined over the month, but other sales were up by 0.6% m/m. Yearly trend has recovered from -0.6% y/y the prior month to 2.1% y/y.
Macro economic

The Chief Economist's weekly update

To help you navigate through the economic news, here is a summary of last week’s main events and what to look out for next week.

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Analysen 31.03.2020

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