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.