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Market insight 16.10.2020

US: strong retail sales, rising consumer confidence but disappointing industrial activity

US: strong retail sales, rising consumer confidence but disappointing industrial activity

US: Retail sales (Sept.): 1.9% m/m vs 0.8% expected (prior: 0.6%)

  • Core sales were up by 1.3% m/m vs 0.3% m/m expected, -0.3% m/m the prior month.
  • Sales were strong in all segments, except for electronics; the most important rebound was seen in autos, clothes, sport and restaurants.
  • Lower but still existing income support, high savings and still positive labor market have underpinned stronger purchases in Sept, and in Q3 globally; this bodes well for Q3 GDP, expected above 30% q/q saar.

 

US: Industrial production (Sept.): -0.6% m/m vs 0.5% expected (prior: 0.4%)

  • The disappointing numbers were mainly due to sharp reversal in auto production (-6.7% m/m), but energy and production of equipment goods were also weak in parallel.
  • These data pointed towards downside risks in Q4, and the high level of dependence of activity to the consumer related sectors.

 

US: Consumer confidence (Michigan) (Oct.): 81.2 vs 80.5 expected (prior: 80.4)

  • Sentiment was better than expected but fuelled by rising expectations while current sentiment has eased contrary to expectations.
  • Future views were more positive on the economy, unemployment and income situation.
  • The current view has moderated after the prior month rebound with less positive situation on income and also willingness to buy large items, except housing.
  • Cautious stance on current situation could reflect uncertainties on contagion, fiscal debate and uncertainties related to presidential elections, while the outlook remained positive and sales still positively oriented.

 

US: Business inventories (Aug.): 0.3% m/m vs 0.4% expected (prior: 0.1%)

  • Inventories have increased for autos and general merchandises; sales were up by 0.6% m/m.

 

Eurozone: CPI (Sept.): 0.1% m/m as expected (prior: %)

  • Headline inflation was down by 0.3 % y/y after -0.2 % y/y the prior month; final data were in line with expectations, showing declining monthly data in energy, food and in services; one part is due to VAT cuts in Germany, but also related to weakening demand in some sectors.
  • This environment should add pressure on the ECB to accommodate further its monetary stance or to adopt a new inflation targeting strategy.


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Market insight 20.10.2020

US: strong momentum for single-family houses

US: Housing starts (Sept.): 1415k vs 1465k expected (prior: 1388k revised from 1416k)

  • Starts have rebounded after the fall the prior month, but they remained below their July high levels (1487 k).
  • Trend in single family houses (starts and building permits) continued to rise, while data on multi-family houses have shown a slowdown in starts and permits over the past 3 months.

 

Switzerland: Trade balance (Sept.): 3.28 Bn CHF (prior: 3.54Bn)

  • Trade surplus has declined from the prior month due to reversal in export performances.
  • Real exports: -2.1% m/m after 3% M7M the prior month, real imports: 2.1% m/m after -0.5% m/m the prior month.

 

Germany: PPI (Sept.): 0.4% m/m vs -0.1% expected (prior: 0%)

  • Basic good prices were up by 0.4% m/m, due to 1% m/m in energy prices; other prices were flat or slightly down over the month. Core PPI were up by 0.1% m/m.
  • PPIs stayed in negative territory on yearly trend: -1% y/y after -1.2% y/y.

 

Poland: Industrial production (Sept.): 15.5% m/m vs 13.4% expected (prior: -5.8%)

  • A strong rebound in activity in a traditional highly volatile monthly index; the rebound was centred on the manufacturing sector (17% m/m).
  • Yearly trend has rebounded from 1.5% y/y the prior month to 5.9% y/y.

 

Poland: PPI (Sept.): 0.1%m/m as expected (prior: -0.4% revised from -0.3%)

  • Mining prices were up by 1.9% m/m after -0.5% m/m the prior month.
  • Yearly trend has turned more negative, from -1.3% y/y the prior month to -1.6% y/y.
Market insight 19.10.2020

Rising optimism in US housing; Chinese Q3 GDP expanding, but below expectations

US: NAHB housing market index (Oct.): 85 vs 83 expected (prior: 83)

  • Sentiment has increased to new highs, with rising current and future sales; index has increased in all except one of the four districts.
  • Low interest rates and healthy labour market continue to support the trend in housing.

 

China: Q3 GDP pointed to continued recovery: 4.9% y/y vs expected 5.5% (prior: 3.2% y/y).

  • The economy expanded at a faster pace of 4.9% y/y (2.7% SA q/q) in Q3. This was slightly below consensus, but underlying data suggests that the recovery is becoming broader based.
  • Some downside risks to our growth forecast of 2.1% for 2020, which indirectly assumes a 6.5% y/y expansion in Q4. However, better domestic demand, compounded with a favorable base effect in Q1, point to upside risks in 2021. 

 

China: Sept. industrial production: 6.9% y/y (prior: 5.6%); retail sales: 3.3% y/y (prior: 0.5%); Fixed asset investment: 0.8% YTD y/y (prior: -0.3%)

  • The supply side continued to lead the recovery in the last month of Q3, with industrial production growing at 6.9% y/y and exceeding expectations of 5.8%.
  • Other activity indicators suggested that the recovery is spilling over to the demand side heading into Q4. Retail sales expanded by 3.3% y/y, exceeding expectations of 1.6%. Fixed Asset Investments entered positive territory for the first time since the COVID-19 outbreak, reaching 0.8% YTD y/y vs expectations of 0.8%.
Market insight 21.10.2020

UK: inflation has rebounded after end of support to restaurants

UK: CPI (Sept.): 0.4% m/m vs 0.5% expected (prior: -0.4%)

  • Inflation has rebounded after lower tax and specific help to restaurants have ended.
  • Over the month, prices of food, health and transport have declined, while prices rebounded for clothes and hotels and restaurants after measures expired.
  • Yearly trend has accelerated further from 0.2% y/y the prior month to 0.5% y/y.
    low inflation environment could add pressure on the BoE to ease further.

 

UK: PPI Input prices (Sept.): 1.1% m/m vs -0.3% expected (prior: -0.2% revised from -0.4%)

  • A broad-based rise in prices over the month, except for oil prices; largest rises were seen in food and metal prices over the month.
  • Yearly trend has turned less negative, from -5.6% y/y the prior month to -3.7% y/y.

 

UK: PPI Output prices (Sept.): -0.1% m/m vs 0% expected (prior: 0.1% revised from 0%)

  • Prices have contracted further due to sharp decline in oil prices (-2.5%m/m); core PPI were up by 0.2% m/m.
  • Yearly trend remained stable at -0.9% y/y.

 

Switzerland: M3 (Sept.): 4.1% y/y (prior: 4%)

  • Other monetary aggregates have also shown parallel rising trend (M1: 5.6% y/y; M2 up by 3.2% y/y)

 

Poland: Retail sales (Sept.): -1.8% m/m vs -2.4% expected (prior: -2.6%)

  • Contraction in sales was less negative than expected thanks to still dynamic purchases of autos, pharma and textile products.
  • Trend in real yearly trend has improved from 0.5 % y/y the prior month to 2.5 %y/y.

 

Auch lesenswert

Market insight 22.10.2020

Booming US existing home sales; weakening consumer confidence in the eurozone

US: Initial jobless claims (Oct.17): 787k vs 870k expected (prior: 842k revised from 898k)

  • Continuing claims: 8373 k after 9397 k the previous week.
  • Momentum has significantly improved from the previous weeks.

 

US: Existing home sales (Sept.): 6.54M vs 5.3M expected (prior: 5.98M revised from 6M)

  • Sales of existing homes have reached new high levels; a strong rise has been seen in single-family houses, while sales of condos were also on the rise but at a slower pace.
  • Inventories for both categories have decreased and settled below 3 months; prices remained on a rising trend for both single-family houses and condos.

 

France: Business confidence (Oct.): 90 vs 92 expected (prior: 92)

  • Business confidence has decreased over the month; in the manufacturing sector, confidence has declined from the prior month, which was also revised down.
  • Sentiment on past production and inventories has increased further, but sentiment on new orders and future own production has fallen significantly over the month.
  • Separately, sentiment in services has fallen dramatically and the index was back to its July level, pointing towards weak activity in the month to come.

 

Germany: GFK consumer confidence (Nov.): -3.1 vs -3 expected (prior: -1.7 revised from -1.6)

  • Preliminary data have pointed towards deteriorating confidence related to rising concerns on pandemic and local restrictions.

 

Eurozone: Consumer confidence (Oct.): -15.5 vs .15 expected (prior: -13.9)

  • Preliminary data have shown declining sentiment in consumers; the index was back to its June level.
  • Downside risks on Q4 growth are building in the Eurozone.

 

Norway: Unemployment rate (Aug.): 5.3% vs 5.1% expected (prior: 5.2%)

  • The unemployment rate continues to trend higher over the past quarters.

 

Turkey: Consumer confidence (Oct.): 81.9 (prior: 82)

  • Sentiment has eroded from the prior month due to lower confidence on future economic situation and rising unemployment.
Market insight 21.10.2020

UK: inflation has rebounded after end of support to restaurants

UK: CPI (Sept.): 0.4% m/m vs 0.5% expected (prior: -0.4%)

  • Inflation has rebounded after lower tax and specific help to restaurants have ended.
  • Over the month, prices of food, health and transport have declined, while prices rebounded for clothes and hotels and restaurants after measures expired.
  • Yearly trend has accelerated further from 0.2% y/y the prior month to 0.5% y/y.
    low inflation environment could add pressure on the BoE to ease further.

 

UK: PPI Input prices (Sept.): 1.1% m/m vs -0.3% expected (prior: -0.2% revised from -0.4%)

  • A broad-based rise in prices over the month, except for oil prices; largest rises were seen in food and metal prices over the month.
  • Yearly trend has turned less negative, from -5.6% y/y the prior month to -3.7% y/y.

 

UK: PPI Output prices (Sept.): -0.1% m/m vs 0% expected (prior: 0.1% revised from 0%)

  • Prices have contracted further due to sharp decline in oil prices (-2.5%m/m); core PPI were up by 0.2% m/m.
  • Yearly trend remained stable at -0.9% y/y.

 

Switzerland: M3 (Sept.): 4.1% y/y (prior: 4%)

  • Other monetary aggregates have also shown parallel rising trend (M1: 5.6% y/y; M2 up by 3.2% y/y)

 

Poland: Retail sales (Sept.): -1.8% m/m vs -2.4% expected (prior: -2.6%)

  • Contraction in sales was less negative than expected thanks to still dynamic purchases of autos, pharma and textile products.
  • Trend in real yearly trend has improved from 0.5 % y/y the prior month to 2.5 %y/y.

 

Market insight 20.10.2020

US: strong momentum for single-family houses

US: Housing starts (Sept.): 1415k vs 1465k expected (prior: 1388k revised from 1416k)

  • Starts have rebounded after the fall the prior month, but they remained below their July high levels (1487 k).
  • Trend in single family houses (starts and building permits) continued to rise, while data on multi-family houses have shown a slowdown in starts and permits over the past 3 months.

 

Switzerland: Trade balance (Sept.): 3.28 Bn CHF (prior: 3.54Bn)

  • Trade surplus has declined from the prior month due to reversal in export performances.
  • Real exports: -2.1% m/m after 3% M7M the prior month, real imports: 2.1% m/m after -0.5% m/m the prior month.

 

Germany: PPI (Sept.): 0.4% m/m vs -0.1% expected (prior: 0%)

  • Basic good prices were up by 0.4% m/m, due to 1% m/m in energy prices; other prices were flat or slightly down over the month. Core PPI were up by 0.1% m/m.
  • PPIs stayed in negative territory on yearly trend: -1% y/y after -1.2% y/y.

 

Poland: Industrial production (Sept.): 15.5% m/m vs 13.4% expected (prior: -5.8%)

  • A strong rebound in activity in a traditional highly volatile monthly index; the rebound was centred on the manufacturing sector (17% m/m).
  • Yearly trend has rebounded from 1.5% y/y the prior month to 5.9% y/y.

 

Poland: PPI (Sept.): 0.1%m/m as expected (prior: -0.4% revised from -0.3%)

  • Mining prices were up by 1.9% m/m after -0.5% m/m the prior month.
  • Yearly trend has turned more negative, from -1.3% y/y the prior month to -1.6% y/y.