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US: Consumer confidence (Michigan) (June Prel.): 97.9 vs 98.0 expected (prior: 100.0)
Current conditions: 112.5 vs 109.0 expected (prior: 110.0)
Expectations: 88.6 vs 92.0 expected (prior: 93.5)
The escalation of trade tensions and slower gains in employment unsurprisingly weighed slightly on consumer sentiment, but it remains at high levels, which should continue to support consumption.
Inflation expectations continued to decline.
US: Industrial production (May): 0.4% m/m vs 0.2% expected (prior: -0.4% revised from -0.5%)
The rebound was led by motor vehicle (+2.4% m/m), utilities (+2.1% m/m) and mining (+0.1%).
However, business sentiment in the manufacturing sector, the overall global environment and inventory overhang suggests the industrial production remains in a soft patch.
US: Retail sales (May): 0.5% m/m vs 0.6% expected (prior: 0.3% revised from -0.2%)
Ex auto & gasoline: 0.5% m/m vs 0.4% expected (prior: 0.3% revised from -0.2%)
The fact that most discretionary categories of sales posted strong gains (like sales at food services and drinking places, which rose by 0.7% m/m or autos up 0.7% m/m) reflects the very elevated consumer confidence. Non-store retail sales (mostly online) jumped by 1.4% m/m, lifting its y/y change to 11.4% from 9.9%.
Following the sizable upward revision for April, the 10.9% annualized increase in retail sales over the last three months is the strongest since November 2017, which will lead to (possibly significant) upward revisions to Q2 GDP growth forecasts.
France: CPI (May F.): 0.1% m/m vs 0.2% expected (prior: 0.2%)
CPI y/y: 1.1% as expected (prior: 1.5%)
The monthly increase has been revised down from the flash estimate to 0.1% (vs 0.2%), but the y/y rate is unchanged at 1.1% (lowest since September 2017).
Russia: central bank cut rate by 25bp to 7.50%, as expected
The cut was widely expected (because of soft inflation and weak demand) but the central bank sent a stronger-than-expected signal of another reduction in the short term (at an "upcoming" meeting).
US: Initial jobless claims (June 8): 222k vs 215k expected (prior: 219k revised from 218k)
Continuing claims: 1695 k after 1693 k past week.
US: Import price index (May): -0.3% m/m vs -0.2% expected (prior: 0.1% revised from 0.2%)
Lower oil prices and strong USD have driven import prices lower; in parallel, export prices have also declined by 0.2% m/m after 0.1% m/m past month.
UK: RICS house price balance (May): -10% vs -21% expected (prior: -22% revised from -23%)
Balance of sentiment in housing has improved, contrary to expectations; views on prices, sales and new buyers have improved from past month.
Sweden: Unemployment rate (May): 3.4% (prior: 3.5%)
An improving trend remained in place.
Eurozone: Industrial production (Apr.): -0.5% m/m as expected (prior: -0.4% revised from -0.3%)
Despite a rebound in energy production, activity remained in contraction in all other sectors.
The yearly trend remained in negative territory: -0.4% y/y after -0.7% y/y past month.
Germany: CPI (May): 0.3% m/m as expected (prior: 1.0%)
Prices of clothes and for communication have declined and they have moderated in other sectors.
The yearly trend has declined from 2.1% y/y to 1.3% y/y.
Italy: Unemployment rate (Q1-19): 10.4% as expected (prior: 10.6%)
After a rebound in Q4, employment has recovered on a positive even moderate trend.
US: CPI (May): 0.1% m/m as expected (prior: 0.3%)
Inflation has moderated on lower energy prices, and related sectors such as transport, and lower prices for computers. Core inflation was also moderate, up by 0.1% m/m, as prices of services have also moderated (0.1% m/m after 0.3% m/m).
Yearly trend has moderated from 2% y/y to 1.8% y/y, and for core inflation from 2.1% y/y to 2% y/y.
A large part of the change in inflation is related to energy, which will probably not really change the Fed's view on a transitory moderation in inflation.
Spain: CPI (May): 0.2% m/m as expected (prior: 1.0%)
Inflation has been confirmed on a slower pace; yearly trend has decreased from 1.6% y/y to 0.9% y/y.
Brazil: Retail sales (Apr.): 0% m/m vs 0.3% expected (prior: 1.1%)
Sales including autos were flat, but down by 0.6% m/m ex autos, due to reversal on clothes and communication items.
Yearly trend (broad sales) has turned mildly positive, up by 1.7% y/y after a large fall in the prior month (-3.4% y/y).
US: NFIB Small Business optimism (May): 105 vs 102 expected (prior: 103.5)
Contrary to expectations, sentiment among small firms has increased, driven up by higher sales, better economy and increased capex and compensation.
The index has recovered to the levels seen in past Oct. 18, with constructive view on the business cycle.
US: PPI (May): 0.1% m/m as expected (prior: 0.2%)
Inflation has eased on food, energy, while it was firmer in services, due to prices for warehouses and transport. Core PPIs were up by 0.4% m/m.
Inflation trend in PPI has moderated from 2.2% y/y to 1.8% y/y; in PPI ex food-energy and trade were slightly firmer from 2.2% y/y to 2.3% y/y.
UK: Unemployment rate (ILO) (Apr.): 3.8% as expected (prior: 3.8%)
Claimant count: 3.1% after 3% past month; the ratio is on a regular rising trend.
Growth in employment is mainly coming from the self-employed sector.
UK: Average earnings incl. Bonus (Apr.): 3.1% y/y vs 3.0% expected (prior: 3.3%)
Wages ex bonuses were up by 3.4% y/y after 3.3% y/y the prior month.
Wages in the construction sector was the most buoyant, up by 4.4% y/y; yearly trend in wages remained firm.
Norway: CPI (May): -0.3% m/m vs 0.1% expected (prior: 0.4%)
Yearly trend in inflation has moderated from 2.9% y/y to 2.5% y/y; underlying trend has eased from 2.6% y/y to 2.3% y/y.
France: Business sentiment (Bank of France) (May): 99 vs 100 expected (prior: 99)
Index was stable, but sentiment on orders and production has slightly increased from past month.
Separately, sentiment was also stable in services and in construction.
US: Non-farm payrolls (May): 75k vs 175k expected (prior: 224k revised from 263k)
Soft increase which contrasts with other labor market indicators (jobless claims, consumer confidence in job-finding prospects, hiring intention in business surveys) indicating a more robust performance.
Weak hiring continued in the manufacturing sector that added only 3k jobs.
This report (including 75k downward revisions for the previous two months) suggests some weakening momentum in the labor market, which appears to be broad-based across sectors.
Even though monthly job growth of around 100k is sufficient to keep the unemployment rate at 3.6%, today's data will boost expectations for a Fed rate cut.
US: Unemployment rate (May): 3.6% as expected (prior: 3.6%)
The U6 underemployment rate declined by two tenths to a new cyclical low of 7.1%, reflecting a decline in workers with a part-time job for economic reasons.
US: Average hourly earnings (May): 0.2% m/m vs 0.3% expected (prior: 0.2%)
Y/y: 3.1% vs 3.2% expected (prior: 3.2%)
The yearly change fell to the lowest level since last September.
Germany: Industrial production (April): -1.9% m/m vs -0.5% expected (prior: 0.5%)
IP y/y: -1.8% vs -0.4% expected (prior: -0.9%)
Sharp decline with broad-based weakness across sectors, but these data can be very volatile around Easter.
Germany: Trade Balance (April): 17.9bn EUR vs 19.5bn expected (prior: 22.6bn revised from 22.7bn)
Exports: -3.7% m/m vs -0.9% expected (prior: 1.6%)
Imports: -1.3% m/m vs -0.2% expected (prior: 0.7%)
Sharp decline with the same caveat as for industrial production.
France: Industrial production (April): 0.4% m/m vs 0.3% expected (prior: -1.1% revised from -0.9%)
IP y/y: 1.1% vs 1.0% expected (prior: -0.7% revised from -0.9%)
The rebound was led by consumer goods and energy production.
Switzerland: Unemployment rate (sa) (May): 2.4% as expected (prior: 2.4%)
Unchanged for the 7th consecutive month.