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Daily Macroeconomic Digest

Date
Title
Teaser
Freitag 30 Oktober
Eurozone: stronger than expected GDP growth in Q3

US: Personal income (Sept.): 0.9% m/m vs 0.4% expected (prior: -2.5% revised from -2.7%)

  • Wages were up by 0.8% m/m and disposable income was also up by 0.9 % m/m after -2.9% m/m the prior month.
  • Resuming activity, labor and some support to income have underpinned disposable income.

 

US: Personal spending (Sept.): 1.4% m/m vs 1% expected (prior: 1%)

  • Spending was sustained for durable goods while they slowed down for services over the month.
  • Saving ratio has eased from 14.8% the previous month to 14.3%.

 

US: Chicago PMI (Oct.): 61.1 vs 58 expected (prior: 62.4)

  • Business sentiment has eased less than expected over the month and the index remained at a high level.
  • Sentiment on new orders has increased but views on production, backlog of orders and employment has eased from the prior month.

 

US: Consumer confidence (Michigan) (Oct.): 81.8 vs 81.2 expected (prior: 80.4)

  • Sentiment has improved from the prior month; sentiment on current conditions has finally eased less than expected, while expectations have increased further.
  • Opinions have improved on personal financial situation, and consumers were less worried on employment and interest rates; expectations on future economic conditions have increased further.
  • Willingness to buy has increased further for houses but eased on autos.

 

Eurozone: GDP (Q3-20): 12.7% q/q vs 9.6% expected (prior: -11.8%)

  • The rebound was stronger than expected over the quarter, benefiting from the end of the first lockdown.
  • The four major euro economies have all rebounded more than expected in Q3; with renewed restrictions in several countries a mild recession is expected in Q4 (GDP to be down by 1% q/q).

 

Eurozone: Unemployment rate (Sept.): 8.3% vs 8.2% expected (prior: 8.3% revised from 8.1%)

  • The unemployment ratio is on a rising trend since Q2; this trend should continue, and a peak could be reached in Q1-21.

 

Eurozone: CPI estimate (Oct.): -0.3% y/y as expected (prior: -0.3%)

  • Flash estimate has pointed towards ongoing negative inflation, mainly due to falling energy prices.
  • Over the month, prices were up by 0.2% m/m due a modest rebound energy, food and industrialized goods but prices of services have continued to fall.
  • Core inflation was up by 0.2 % m/m and stayed also stable on a yearly basis at 0.2% y/y.
  • Ms Lagarde mentioned the euro area did not enter a deflation, but persisting low inflation is a challenge for the monetary policy and its long-term target on inflation.

 

France: GDP (Q3-20): 18.2% q/q vs 15% expected (prior: -13.7% revised from -13.8%)

  • A broad-based rebound in Q3; consumption was up by 17% q/q and total investment by 23.3% q/q; public consumption was also up by 15.4% q/q; export and imports have also rebounded, and net export contribution to growth was positive, adding 1.2 pp.
  • Inventories have decreased, leading to a -1.8 pp contribution to GDP over the quarter.
  • Unfortunately, renewed lockdown will depress further activity and -2% q/q contraction is expected in Q4.

 

France: Consumer spending (Sept.): -5.1% m/m vs -1.4% expected (prior: 2.2% revised from 2.3%)

  • Sales have sharply decreased after past months rebound; the fall was broad-based across sectors, and more particularly pronounced in textile after summer discounts.
  • Another large fall should be seen in Nov., related to renewed lockdown.

 

France: CPI (Oct.): -0.1% m/m vs 0.1% expected (prior: -0.6%)

  • Prices of services were down by 0.4% m/m, a second month of fall according to this first estimate. Prices of food (fresh food up by 1.8(% m/m) and manufactured goods (0.3% m/m) were up over the month.
  • Yearly trend remained unchanged at 0% y/y.

 

Germany: GDP (Q3-20): 8.2% q/q vs 7.3% expected (prior: -9.7%)

  • No detail available yet, but domestic demand should have underpinned the rebound.

 

Germany: Retail sales (Sept.): -2.2% m/m vs -0.6% expected (prior: 1.8% revised from 3.1%)

  • After two months rebound, sales were down over the month; the fall was broad- based across sectors, as seen in France.
  • These data could point towards still fragile and volatile consumption ahead of new restrictions, given consumption has supported the Q3 rebound in all developed countries.

 

Italy: GDP (Q3-20): 16.1% q/q vs 11.1% expected (prior: -13% revised from -12.8%)

  • A more pronounced rebound than expected, no details available.

 

Italy: Unemployment rate (Sept.): 9.6% vs 10.1% expected (prior: 9.7%)

  • A second month of fall in unemployed, contrary to expectations.

 

Italy: CPI (Oct.): 0.6% m/m vs 0.3% expected (prior: 0.9% revised from 1%)

  • A strong rebound in prices of clothes, and also some rises in food and utility; transport and energy costs have declined.
  • Yearly trend was less negative, from -1% y/y the prior month to -0.6% y/y.

 

Spain: GDP (Q3-20): 16.7% q/q vs 13.5% expected (prior: -17.8%)

  • A stronger than expected rebound in the economy, driven a firmer recovery of both consumption and investment during the quarter.

 

Switzerland: KOF (Oct.): 106.6 vs 108 expected (prior: 110.1 revised from 113.8)

  • After a strong rebound over the past two months, sentiment has been revised down the prior month and eased in Oct. It remained at a high level. Activity should be impacted by slower growth in the eurozone in Q4 and renewed restrictions.

 

UK: Nationwide house prices (Oct.): 0.8% m/m vs 0.4% expected (prior: 0.9%)

  • Prices remained on a strong rising trend; yearly trend has accelerated from 5% y/y the prior month to 5.8% y/y.

 

Brazil: Unemployment rate (Aug.): 14.4% vs 14.2% expected (prior: 13.8%)

  • The unemployment rate remained on a rising trend.
Donnerstag 29 Oktober
US: sharp rebound in Q3 GDP; rising expectations of a large ECB’s easing in Dec.

US: Initial jobless claims (Oct.24): 751k vs 770k expected (prior: 787k)

  • Continuing claims: 7756 k after 8373 k the prior week.

 

US: GDP (Q3-20): 33.1% q/q vs 32% expected (prior: -31.4%)

  • A sustained rebound, even firmer than expected, driven by consumption, equipment spending and residential.
  • Consumption was up by a strong 40.7% q/q saar; it was sustained in all segments and particularly strong for durable goods (82% q/q).
  • Investment was mixed as structures and R&D stayed under contraction but spending on equipment was up by 70%q/q (-35% q/q in Q2).
  • Residential investment was up by 59.3% q/q after -35.9%q/q in Q2.
  • There was a strong rebound in both exports and imports, but net trade has negatively contributed to GDP (-3 pp); public consumption was down by 4.5% q/q due to the end of support program (-0.7 pp net contribution to GDP).
  • Inventories were less negative, adding 6 pp to Q3 GDP change.
  • The rebound was mainly driven by sustained domestic demand; Q4 GDP is expected on a slower pace, while uncertainties on public consumption contribution remained in place.

 

US: Pending home sales (Sept.): -2.2% m/m vs 2.9% expected (prior: 8.8%)

  • A decline in three of 4 districts after sustained upward trend in the past months; low inventories and rising prices could weigh on sales despite remaining sustained demand.

 

ECB meeting: more accommodation in the pipeline

  • Very dovish statement on economic conditions with rising concerns related to pandemic should support more actions in the next Dec. meeting, already announced by Ms Lagarde.
  • All members agreed that is necessary to act; probably there is not yet a large consensus on the instruments to be used and the magnitude of the changes, giving time to take more information and to reach a larger consensus.
  • Lagarde mentioned implicitly that the ECB is expecting downwards revisions to GDP outlook in Dec. and is ready to take a broad-based action.
  • Lagarde mentioned explicitly that all instruments could be re-calibrated to fit to the new economic environment and pandemic situation to reach ECB’s targets on accommodative financial conditions and inflation.
  • Future action should not only be centred on amount or duration of PEPP, but to associate TLTROs and to combine other available instruments; this should increase expectations on markets and open to door to a Lagarde’s “whatever it takes”.

 

Eurozone: Business climate (Oct.): -9.6 vs -10.9 expected (prior: -11.4 revised from -11.1)

  • Business confidence was less negative and better than expected over the month.
  • Sentiment was less negative on orders, exports, past production and employment; on the opposite, views on future production have declined over the month.
  • As seen in preliminary PMI, sentiment has relatively improved over the past month; the challenge is to keep this momentum going on while renewed partial lockdown is in place in several countries. 

 

Eurozone: Service confidence (Oct.): -11.8 vs -14 expected (prior: -11.2 revised from -11.1)

  • Confidence has slightly decreased and was still resilient compared to consensus expectations, but clearly downside risks should intensify next month due to renewed lockdown weighing on services.
  • Over the month, modest improvement was seen in future demand and employment, and opinions were less negative in construction and in retail; a sharp new deterioration should be seen in Nov. in retail under renewed lockdown.

 

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

  • Sentiment has declined from the previous month; opinions have deteriorated on current situation and expectations have also decreased on future economic situation, employment and willingness to buy.
  • Expectations were back to their June level, in line with renewed lockdown announced in several countries.

 

Germany: Unemployment rate (Oct.): 6.2% as expected (prior: 6.3%)

  • Unemployed was down by 35 k after -10 k the prior month.
  • On ILO definition, the unemployment ratio remained stable at 4.5%.

 

Italy: Consumer confidence (Oct.): 102 as expected (prior: 103.3 revised from 103.4)

  • Confidence has eased on declining views on future economic situation and rising unemployment.

 

Italy: Manufacturing confidence (Oct.): 95.6 vs 91.8 expected (prior: 92.6 revised from 92.1)

  • Business sentiment has increased more than expected from the prior month; opinions have improved on current production, orders and economic situation.
  • Expectations on future production and orders were more cautious after a rebound the prior month.

 

Spain: CPI (Oct.): 0.3% m/m vs 0.5% expected (prior: 0.4%)

  • Preliminary data have shown more stable trend in monthly prices, while yearly trend has declined further, from -0.6% y/y the prior month to -1% y/y.

 

Germany: CPI (Oct.): 0% m/m as expected (prior: -0.4%)

  • Preliminary data have pointed toward remaining low inflation; the rises in clothes and energy prices have been more than compensated by lower prices in services.
  • Yearly trend has declined further, from -0.4% y/y the prior month to -0.5% y/y.

 

UK: M4 (Sept.): 12.3% y/y (prior: 12.1%)

  • M4 ex-OFC has slightly increased over the month (0.4% m/m after 0% m/m the prior month).
  • M4 lending was up by 4.3% y/y after 4.4% y/y the prior month; lending to business has slowed down (from 9.7% y/y the prior month to 8.4% y/y), but lending to SMEs has accelerated further (from 21.9% y/y to 23% y/y).
  • Credit consumer was down by 4.6% y/y (from -3.9% y/y the prior month), as consumers repaid debt; on the opposite, mortgage approvals stayed dynamic.
Mittwoch 28 Oktober
France: modest easing in consumer confidence in October

US: Wholesale inventories (Sept.): -0.1% m/m vs 0.4% expected (prior: 0.3% revised from 0.4%)

  • Inventories in the retail sector have increased by 1.6% m/m after 0.5% m/m the previous month. Inventories have contracted in other sectors.

 

France: Consumer confidence (Oct.): 94 vs 93 expected (prior: 95)

  • Consumer confidence eased less than expected; while sentiment on current situation was quite stable, expectations on personal situation, standard of living and unemployment have declined from the prior month.
  • New restrictive measures and renewed lockdown to be announced should deteriorate further the confidence.

 

Italy: PPI (Sept.): 0.3% m/m (prior: 0.1%)

  • PPIs were firmer for consumer goods and energy over the month; yearly trend was less negative, from -4% y/y the prior month to -3.8% y/y.

 

Spain: Retail sales (real) (Sept.): -3.3% y/y vs -3.4% expected (prior: -2.9% revised from -2.4%)

  • Sales were down by 0.3% m/m; the fall was broad based, except for personal goods which remained on the rise.

 

Sweden: Retail sales (Sept.): 0.8% m/m (prior: -0.2% revised from -0.3%)

  • Retail sales rebounded in Aug, up by 3.9% y/y

 

Sweden: Manufacturing confidence (Oct.): 106.8 vs 107 expected (prior: 105.5 revised from 105.8)

  • Confidence has regained but less than expected; in parallel, confidence has also increased in construction and in services from the prior month.

 

Sweden: Consumer confidence (Oct.): 90 vs 88.5 expected (prior: 88.4 revised from 88.3)

  • Consumer confidence has increased slightly more than expected.
  • Rising confidence on future economic situation, but cautiousness on current and future personal situation.

 

Norway: Retail sales (Sept.): 0.3% m/m vs 1.2% expected (prior: -4.9%)

  • More volatile data over the past month, due to changing consumer habits; the rebound remained below expectations.

 

Dienstag 27 Oktober
US: strong durable goods orders but weakening consumers expectations

US: Durable goods orders (Sept.): 1.9% m/m vs 0.5% expected (prior: 0.4% revised from 0.5%)

  • New orders were more sustained than expected thanks to aircraft and autos; core order (new orders for capital goods non-defense ex aircraft) were up by 1% m/m after upward revisions to past month data (2.1% m/m).
  • Orders have rebounded for transport-autos and metals, while they decreased for electrical and machinery over the month.
  • Shipments were up by 0.3 % m/m (-0.3% m/m the prior month) and inventories were up by 0.4% m/m (-0.1% m/m the prior month).
  • With resuming activity and confidence in the manufacturing sector, durable goods have rebounded pointing towards parallel rebound of private capex in Q3 after large decrease in Q2.

 

US: Housing prices (FHFA) (Aug.): 1.5% q/q vs 0.7% expected (prior: 1.1% revised from 1%)

  • A sharp rebound over the month and broad-based across districts.

 

US: S&P CoreLogic CS 20-City (Aug.): 5.18% y/y vs 4.2% expected (prior: 4.12% revised from 3.95%)

  • Prices remained on a regular upward trend (0.47 % m/m); all districts have contributed positively to the rise in prices.

 

US: Consumer confidence (CB) (Oct.): 100-9 vs 102 expected (prior: 101.3 revised from 101.8)

  • Confidence has eased somewhat from the previous month; sentiment on current conditions has increased further, while expectations have eased (from 102.9 to 98.4).
  • Positive views on current conditions were fuelled by still rising momentum in jobs available and ongoing positive economic environment.
  • Expectations have weakened due to more cautious 6-month views: some moderation is expected in economic activity from today, and a mixed situation expected on labor and income.
  • Willingness to buy in 6-month horizon has eased for cars and large items but increased further for houses.
  • Expectations were volatile during the year and the index is back to levels seen in July-August, period in which contagion cases were high in the US.

 

US: Richmond Fed manufacturing (Oct.): 29 vs 18 expected (prior: 21)

  • Sentiment on current conditions has strongly rebounded thanks to higher shipments and new orders; 6-month expectations have declined after a strong rebound the prior month, showing a more cautious view on global activity.

 

Eurozone: M3 (Sept.): 10.4% y/y vs 9.6% expected (prior: 9.5%)

  • M2 (10.3% y/y) and M1 (13.8% y/y) have shown in parallel an accelerating trend over the month.
  • Credit to the private sector has also accelerated further from 4.5% y/y the prior month to 4.7% y/y.

 

Spain: Unemployment rate (Q3-20): 16.26% vs 16% expected (prior: 15.33%)

  • Despite a rise in employment, unemployed has increased more, and the unemployment ratio has gained further, slightly more than expected.
Montag 26 Oktober
Weakening German IFO; slower new home sales in the US

US: New home sales (Sept.): 959k vs 1025k expected (prior: 994k revised from 1011k)

  • Data have been revised down for past month and have moderated during the month; this moderation was seen over on 3 districts over 4.
  • Inventories have relatively increased, back to past month level, but remained globally tight; prices were on a sustained rising trend after a pause in the previous month. Low rates and rising prices have worked in parallel in past quarters, with sustained demand for housing.

 

Germany: IFO (Oct.): 92.7 vs 93 expected (prior: 93.2 revised from 93.4)

  • Business sentiment has weakened contrary to expectations from the prior month. Views on current situation have improved further, but expectations have weakened, back to their June-July levels.
  • By sector, the sentiment has reversed in trade and weakened also in construction; it has decreased on services but improved further in manufacturing.
  • IFO pointed towards diverging trend between manufacturing and trade-retail sectors facing new restrictions due to second wave of contagion.

 

Spain: PPI (Sept.): 0.3% m/m (prior: 0.2%)

  • Prices of energy and basic metals have rebounded over the month.
  • Yearly trend was slightly less negative, from -3.5% y/y the prior month to -3.3% y/y.

 

Turkey: Industrial confidence (Oct.): 109.7 (prior: 105.7)

  • Sentiment has rebounded on all major sub-components: production, orders and capex; on the contrary, views on exports have eroded from the prior month.
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