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Market insight 16.07.2021

Solid US retail sales in June

Solid US retail sales in June

 

US: Retail sales (June): 0.6% m/m vs -0.3% expected (prior: -1.7% revised from -1.3%)

  • Ex auto & gasoline: 1.1% y/y vs 0.5% expected (prior: -1.0% revised from -0.8%)
  • Strong figures, which indicate continued solid gains in consumer spending.
  • The jump (+2.3% in June and +38% since December) in food services and drinking place reflects the powerful impact of the reopening of the economy.
  • Services industries, which are not much represented in retail sales, should post even stronger gains (and offset some potential weakness in goods, cf below).
  • As May data were revised slightly down, Q2 GDP consensus estimates (currently at 9% q/q) will remain roughly steady after this release.

 

US: Consumer confidence (Michigan) (July Prel.): 80.8 vs 86.5 expected (prior: 85.5)

  • Current conditions: 84.5 vs 91.0 expected (prior: 88.6)
  • Expectations: 78.4 vs 85.0 expected (prior: 83.5)
  • This unexpected decline to a 5-month low is mostly explained by concerns over rising prices.
  • The survey shows that consumers expected inflation to rise 4.8% y/y over the next year, the highest since August 2008.
  • As a result, the measure of buying plans for durables fell to the lowest level since April 2020. For vehicles and homes, buying attitudes even fell to the lowest since 1982.

 

Eurozone: CPI (June F.): 0.3% m/m as expected (prior: 0.3%)

  • CPI y/y: 1.9% as expected (prior: 2.0%)
  • Core CPI y/y: 0.9% as expected (prior: 1.0%)
  • Unchanged from the first estimate.


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Market insight 19.07.2021

US: weakening sentiment in the housing sector

US: NAHB housing market index (July): 80 vs 82 expected (prior: 81)

  • The index has eased from the prior month, but it remained at a historic high level; nevertheless, a downward trend is in place since the peak the index reached at the end of last year.
  • Confidence has declined on future demand, while current sales have just moderated from the prior month. Prices and low inventories could limit further activity in the sector despite a still high demand.

 

Turkey: Consumer confidence (July): 79.5 (prior: 81.7)

  • Confidence has turned highly volatile in past months; confidence has declined on past and future economic conditions and on financial conditions, but the willingness to buy items has slightly increased from the prior month.
Market insight 23.07.2021

Flash PMI business sentiment: diverging trend across sectors and between US, eurozone and UK

US: Markit Manufacturing PMI (July): 63.1 vs 62 expected (prior: 62.1)

  • Business sentiment in manufacturing has increased further on improving orders and export, but also on longer supply delivery, pointing towards still existing bottlenecks and shortages.
  • Employment has increased, and prices remained on the rise.

 

US: Markit Services PMI (July): 59.8 vs 64.5 expected (prior: 64.6)

  • Contrary to expectations, sentiment has declined for the second month in services; momentum has weakened in demand due to higher prices and shortages in stocks; employment was on the rise and costs remained on an upward trend.

 

Eurozone: PMI Manufacturing (July): 62.6 vs 62.5 expected (prior: 63.4)

  • The preliminary business confidence index was slightly lower than past month and quite in line with expectations; this reflected existing constrains on supply chain and transport despite improving production, orders and exports. Prices remained on the rise.
  • The flash German index was stable from the prior month, while the French index has slightly eased.

 

Eurozone: PMI Services (July): 60.4 vs 59.3 expected (prior: 58.3)

  • Flash index has increased from the prior month and was better than expected; while the flash index has increased in Germany, it has weakened in France.
  • While eurozone will continue to benefit from reopening, renewed local restrictions and uncertainties should lead to more volatile and moderating index in the coming months.

 

UK: GFK consumer confidence (July): -7 vs -8 expected (prior: -9)

  • Confidence has improved further, but consumers looked cautious on future global and personal situation.

 

UK: Retail sales (June): 0.5% m/m vs -0.1% expected (prior: -1.3% revised from -1.4%)

  • Sales were mainly driven by fuels and food, while they were moderate or have declined on a monthly basis in other sectors.

 

UK: PMI Manufacturing (July): 60.4 vs 62.4 expected (prior: 63.9)

  • Confidence has declined from the prior month. While exports have rebounded, constrains have weighed down on production due to supply chain shortage and Brexit, despite firm demand. Output prices were on the rise, while input prices have moderated.

 

UK: PMI Services (July): 57.8 vs 62 expected (prior: 62.4)

  • Flash estimate has pointed for second month decline in confidence after strong rebound in May.
  • Covid restrictions, end of stamp duty holiday in housing and slower job creations have driven the decrease of the index.

 

Poland: Unemployment rate (June): 5.9% vs 6% expected (prior: 6.1%)

  • Unemployment has declined from the highs seen in Jan.21, with unemployment ratio at 6.5%.

 

Brazil: CPI (July): 0.72% m/m vs 0.65% expected (prior: 0.83%)

  • Monthly change remained sustained due to monthly rises in housing, household goods, and transport-energy sectors.
  • Yearly trend has accelerated further from 8.13% y/y the prior month to 8.59% y/y.

 

Russia: Central bank has increased its key rates from 5.50% to 6.50% as expected.

  • Inflation pressure continued to drive rational for adjusting in key rates; bank's statement left door opened to another adjustment in rates if needed in the next meeting.
Market insight 20.07.2021

Rebound in US housing starts

US: Housing starts (June): 1643k vs 1590k expected (prior: 1546k revised from 1572k)

  • Building permits: 1598 k vs 1696 k expected; past month data: 1683 k.
  • Housing starts have rebounded more than expected, reaching new high, but prior month data were revised down; data have turned highly volatile in H1-21 due to rising costs and shortage of labor and lands.
  • The decline in building permits suggests potential new decrease in housing starts next month, notably for single family houses after their rebound in June.

 

Switzerland: Trade balance (June): 5.53 Bn CHF (prior: 4.83Bn)

  • Trade surplus has increased thanks to fall in imports; real exports were down by 3% m/m after 1.9% m/m the prior month; real imports were down by 2.7% m/m after -1.4% m/m.

 

Germany: PPI (June): 1.3% m/m vs 1.2% expected (prior: 1.5%)

  • Prices remained sustained due to several strong rises in many sectors: fuel, electricity, mining and food prices.
  • Yearly trend has accelerated further from 7.3% y/y the prior month to 8.6% y/y.

 

Poland: Industrial production (June): 4% m/m vs 4.3% expected (prior: -0.8%)

  • Production has rebounded from the prior month in manufacturing sector (4.7% m/m), being highly volatile in past months.

 

Poland: PPI (June): 0.7%m/m vs 0.4% expected (prior: 0.9% revised from 0.8%)

  • Despite a 2.2% m/m decrease in mining prices over the month, prices were up in other sectors in a 0.5-0.9% m/m range.
  • Yearly trend has accelerated further from 6.6% y/y the prior month to 7% y/y.

Auch lesenswert

Market insight 23.07.2021

Flash PMI business sentiment: diverging trend across sectors and between US, eurozone and UK

US: Markit Manufacturing PMI (July): 63.1 vs 62 expected (prior: 62.1)

  • Business sentiment in manufacturing has increased further on improving orders and export, but also on longer supply delivery, pointing towards still existing bottlenecks and shortages.
  • Employment has increased, and prices remained on the rise.

 

US: Markit Services PMI (July): 59.8 vs 64.5 expected (prior: 64.6)

  • Contrary to expectations, sentiment has declined for the second month in services; momentum has weakened in demand due to higher prices and shortages in stocks; employment was on the rise and costs remained on an upward trend.

 

Eurozone: PMI Manufacturing (July): 62.6 vs 62.5 expected (prior: 63.4)

  • The preliminary business confidence index was slightly lower than past month and quite in line with expectations; this reflected existing constrains on supply chain and transport despite improving production, orders and exports. Prices remained on the rise.
  • The flash German index was stable from the prior month, while the French index has slightly eased.

 

Eurozone: PMI Services (July): 60.4 vs 59.3 expected (prior: 58.3)

  • Flash index has increased from the prior month and was better than expected; while the flash index has increased in Germany, it has weakened in France.
  • While eurozone will continue to benefit from reopening, renewed local restrictions and uncertainties should lead to more volatile and moderating index in the coming months.

 

UK: GFK consumer confidence (July): -7 vs -8 expected (prior: -9)

  • Confidence has improved further, but consumers looked cautious on future global and personal situation.

 

UK: Retail sales (June): 0.5% m/m vs -0.1% expected (prior: -1.3% revised from -1.4%)

  • Sales were mainly driven by fuels and food, while they were moderate or have declined on a monthly basis in other sectors.

 

UK: PMI Manufacturing (July): 60.4 vs 62.4 expected (prior: 63.9)

  • Confidence has declined from the prior month. While exports have rebounded, constrains have weighed down on production due to supply chain shortage and Brexit, despite firm demand. Output prices were on the rise, while input prices have moderated.

 

UK: PMI Services (July): 57.8 vs 62 expected (prior: 62.4)

  • Flash estimate has pointed for second month decline in confidence after strong rebound in May.
  • Covid restrictions, end of stamp duty holiday in housing and slower job creations have driven the decrease of the index.

 

Poland: Unemployment rate (June): 5.9% vs 6% expected (prior: 6.1%)

  • Unemployment has declined from the highs seen in Jan.21, with unemployment ratio at 6.5%.

 

Brazil: CPI (July): 0.72% m/m vs 0.65% expected (prior: 0.83%)

  • Monthly change remained sustained due to monthly rises in housing, household goods, and transport-energy sectors.
  • Yearly trend has accelerated further from 8.13% y/y the prior month to 8.59% y/y.

 

Russia: Central bank has increased its key rates from 5.50% to 6.50% as expected.

  • Inflation pressure continued to drive rational for adjusting in key rates; bank's statement left door opened to another adjustment in rates if needed in the next meeting.
Market insight 21.07.2021

Switzerland: moderating trend in monetary aggregates

Switzerland: M3 (June): 3.5% y/y (prior: 4.2% revised from 4.1%)

  • Yearly trend in monetary aggregates continued to lower due to base effects; M1 growth was down from 6.6% y/y the prior month to 5.6% y/y and M2 from 4.5% y/y to 3.6% y/y.

 

Poland: Retail sales (June): 3.5% m/m (prior: 8.2%)

  • Sales remained firm, thanks to clothes and energy sectors. Yearly trend has moderated after peak recovery in April.

 

 

Market insight 20.07.2021

Rebound in US housing starts

US: Housing starts (June): 1643k vs 1590k expected (prior: 1546k revised from 1572k)

  • Building permits: 1598 k vs 1696 k expected; past month data: 1683 k.
  • Housing starts have rebounded more than expected, reaching new high, but prior month data were revised down; data have turned highly volatile in H1-21 due to rising costs and shortage of labor and lands.
  • The decline in building permits suggests potential new decrease in housing starts next month, notably for single family houses after their rebound in June.

 

Switzerland: Trade balance (June): 5.53 Bn CHF (prior: 4.83Bn)

  • Trade surplus has increased thanks to fall in imports; real exports were down by 3% m/m after 1.9% m/m the prior month; real imports were down by 2.7% m/m after -1.4% m/m.

 

Germany: PPI (June): 1.3% m/m vs 1.2% expected (prior: 1.5%)

  • Prices remained sustained due to several strong rises in many sectors: fuel, electricity, mining and food prices.
  • Yearly trend has accelerated further from 7.3% y/y the prior month to 8.6% y/y.

 

Poland: Industrial production (June): 4% m/m vs 4.3% expected (prior: -0.8%)

  • Production has rebounded from the prior month in manufacturing sector (4.7% m/m), being highly volatile in past months.

 

Poland: PPI (June): 0.7%m/m vs 0.4% expected (prior: 0.9% revised from 0.8%)

  • Despite a 2.2% m/m decrease in mining prices over the month, prices were up in other sectors in a 0.5-0.9% m/m range.
  • Yearly trend has accelerated further from 6.6% y/y the prior month to 7% y/y.