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Market insight 11.08.2020

US: weakening sentiment among small-medium sized firms and firmer PPI due to energy prices

US: weakening sentiment among small-medium sized firms and firmer PPI due to energy prices

US: NFIB Small Business optimism (July): 98.8 vs 100.5 expected (prior: 100.6)

  • After a rebound in the past 3 months, sentiment has weakened on future economic situation, future higher sales and on opportunities to expand.
  • Plan to hire people has modestly increased from past month.
  • Despite a rebound over past 4 months, the total index remained well below its Feb. level.

 

US: PPI (July): 0.6% m/m vs 0.3% expected (prior: -0.2%)

  • Energy prices were up by 5.3% m/m and trade services up by 0.8% m/m; core PPIs were up by 0.3% m/m, same pace as the prior month.
  • Yearly trend has turned less negative, from -0.8% y/y the prior month to -0.4% y/y. Core PPI ex trade costs have rebounded from -0.1% y/y to 0.1% y/y.
  • Energy prices and trade services were responsible for the rebound in prices, pointing to rising costs and some pressure on corporate margins.

 

UK: Unemployment rate (ILO) (July): 3.9% vs 4.2% expected (prior: 3.9%)

  • Claimant count rate: 7.5% after 7.2% the prior month (revised down from 7.3%). Employment has declined by 220 k over the past three months.
  • Jobless claims have increased by 94.4 k over the month after a decline by 68.5 k (-28.5 k previous estimate).
  • After some improvement in June, negative trend has come back with strong rise in jobless claims.
  • The unemployment rate is expected to rebound sharply in H2 if public measures on labor and wage end next October.

 

UK: Average earnings incl. Bonus (June): -1.2% y/y vs -1.1% expected (prior: -0.3%)

  • Wages were down in all sectors except the public sector. Furloughed workers have benefited from public support on wages to compensate the loss in income.

 

UK: BRC retail sales (July): 4.3% y/y (prior: 10.9%)

  • Non-food sales remained on a sustained trend over the past two months.

 

Sweden: Unemployment rate (July): 5.7% (prior: 5.3%)

  • Unemployment rate is on a rising trend since Feb. (4%).

 

Germany: Zew (Aug.): 71.5 vs 55.8 expected (prior: 59.3)

  • While sentiment on current situation has deteriorated, expectations have rebounded further among financial community.

 


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Market insight 05.08.2020

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.
Market insight 10.08.2020

US: strong June job openings

US: JOLTS Job Openings (June): 5889 vs 5300 expected (prior: 5397)

  • Job openings were strong in June and hirings also sustained (even lower than in May) with reopening of the economy.
  • Openings and hirings were particularly strong in services. In parallel, separations and quitters ratios have increased from May to June.

 

Switzerland: Unemployment rate (sa) (July): 3.3% vs 3.4% expected (prior: 3.3%)

  • Unemployed has slightly increased over the month, notably long-term unemployed, but the seasonally adjusted unemployment rate stayed stable.

 

Sweden: Retail sales (June): 2.9% m/m (prior: 2% revised from 1.2%)

  • Yearly trend has turned less negative from -9.2% y/y the prior month to -58% y/y.

 

Norway: CPI (July): 0.7% m/m vs 0.5% expected (prior: 0.2%)

  • Prices of food, household goods and transport have strongly rebounded over the month; core inflation was up by 0.9% m/m after 0.4% m/m the prior month.
  • Yearly trend stayed quite stable (1.3% y/y after 1.4% y/y the prior month), while core inflation has gained from 3.1% y/y to 3.5% y/y.

 

France: Business sentiment (Bank of France) (July): 99 vs 92 expected (prior: 89)

  • Sentiment has regained further on production and orders. Absolute level of orders remained depressed.
  • Separately, sentiment has improved on in parallel in services, while it has stagnated in construction.

 

Turkey: Unemployment rate (May): 12.9% (prior: 12.8%)

  • Unemployed has slightly increased over the month and trend remained up; the seasonally adjusted unemployment rate has increased from 13.8% the prior month to 14%.
Market insight 06.08.2020

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.

Auch lesenswert

Market insight 10.08.2020

US: strong June job openings

US: JOLTS Job Openings (June): 5889 vs 5300 expected (prior: 5397)

  • Job openings were strong in June and hirings also sustained (even lower than in May) with reopening of the economy.
  • Openings and hirings were particularly strong in services. In parallel, separations and quitters ratios have increased from May to June.

 

Switzerland: Unemployment rate (sa) (July): 3.3% vs 3.4% expected (prior: 3.3%)

  • Unemployed has slightly increased over the month, notably long-term unemployed, but the seasonally adjusted unemployment rate stayed stable.

 

Sweden: Retail sales (June): 2.9% m/m (prior: 2% revised from 1.2%)

  • Yearly trend has turned less negative from -9.2% y/y the prior month to -58% y/y.

 

Norway: CPI (July): 0.7% m/m vs 0.5% expected (prior: 0.2%)

  • Prices of food, household goods and transport have strongly rebounded over the month; core inflation was up by 0.9% m/m after 0.4% m/m the prior month.
  • Yearly trend stayed quite stable (1.3% y/y after 1.4% y/y the prior month), while core inflation has gained from 3.1% y/y to 3.5% y/y.

 

France: Business sentiment (Bank of France) (July): 99 vs 92 expected (prior: 89)

  • Sentiment has regained further on production and orders. Absolute level of orders remained depressed.
  • Separately, sentiment has improved on in parallel in services, while it has stagnated in construction.

 

Turkey: Unemployment rate (May): 12.9% (prior: 12.8%)

  • Unemployed has slightly increased over the month and trend remained up; the seasonally adjusted unemployment rate has increased from 13.8% the prior month to 14%.
Market insight 07.08.2020

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.

 

Market insight 06.08.2020

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.