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Daily Macroeconomic Digest

Tuesday 16 August
Falling US housing starts and Zew expectations in Germany

US: Housing starts (July): 1446k vs 1528k expected (prior: 1599k revised from 1559k)

  • The fall in housing starts has accelerated after prior month data were revised higher.
  • Housing starts have decreased for both single family houses and condos over the month, and the declining trend has accelerated for single houses.
  • Building permits: 1674 k after 1696 k the prior month; permits have declined for single family houses but have increased for multifamily houses over the month.


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

  • Industrial activity has rebounded, but mainly due to the auto sector (6.6% m/m after -1.3% m/m prior month); production ex-autos was up by 0.3% m/m after -0.4% m/m prior month.
  • Production of machinery and in mining was also up by around half a point over the month, while activity was down in other sectors.


UK: Unemployment rate (ILO) (June): 3.8% as expected (prior: 3.8%)

  • Claimants count unchanged from prior month at 3.9%.
  • Jobless claims remained on a decreasing trend, but at a slower pace (-10.6 k after -26.8 k the prior month).
  • Employment (3-month average): 160 k after 296 k the prior period.
  • Vacancies remained large but have moderated from 1295 k to 1275 k; the decrease was in demand for labor in mid-size companies, while demand remained unchanged for largest firms.


UK: Average earnings incl. Bonus (June): 5.1% y/y vs 4.5% expected (prior: 6.4% revised from 6.2%)

  • Trend in wages has moderated from the prior month but remained sustained.
  • Trend has moderated in all sectors but remained on a high pace for retail-hotel, finance, construction and in services sectors. Excluding bonuses, wage growth has accelerated from 4.4% y/y the prior month to 4.7% y/y.
  • While real economy is expected to contract further at year end, wage growth could fuel pressures on the BoE to continue to hike key interest rates.


Germany: Zew (Aug.): -55.3 vs -52.7 expected (prior: -53.8)

  • Expectations among financial community about Germany have sharply deteriorated on fears of energy shortage in the winter months. The index has declined to very low levels.
  • Sentiment on current situation has also decreased in parallel.
Monday 15 August
US: sharp fall in confidence in New York Fed manufacturing and in NAHB housing

US: NY Empire manufacturing (Aug.): -31.3 vs 5 expected (prior: 11.1)

  • Confidence has sharply fallen to levels seen in Q2-20 and in 2001, and below the lows seen in 2015.
  • Current view has deteriorated on new orders, shipments, employment and prices paid.
  • The 6-month view index has slightly regained from depressed level, but it remained very low; views on orders, shipments, employment and prices were more constructive compared to the prior month.
  • This index is traditionally highly volatile, but it points towards contraction in industrial activity.


US: NAHB housing market index (Aug.): 49 vs 54 expected (prior: 55)

  • Confidence in housing market has sharply declined over the month, confirming a downward trend in place for several months.
  • Opinions have deteriorated on present and future sales, and the decrease was broad-based across regions.
  • The index has fallen to the lows seen in Apr. 20 and as low as it was in 2013-2014.


Switzerland: PPI-import prices (July): -0.1% m/m (prior: 0.3%)

  • Prices of imports were down by 0.4% m/m (0.6% m/m prior month) and producer prices were up by 0.1% m/m (0.2% m/m prior month).
  • Yearly trend for global index has declined from 6.9% y/y prior month to 6.3% y/y.


Germany: Wholesale price (July): -0.4% m/m (prior: 0.1%)

  • Yearly trend has declined from 21.2% y/y prior month to 19.5% y/y.
Friday 12 August
A rebound in US consumer confidence; modest Q2 GDP contraction in UK

US: Consumer confidence (Michigan) (Aug.): 55.1 vs 52.5 expected (prior: 51.5)

  • First estimates of consumer confidence have shown a rebound after depressed numbers. Despite the rebound the index remained at very low level.
  • Sentiment on current situation has decreased after a rebound the prior month, but expectations have strongly rebounded from the very low levels seen over the past two months.
  • Inflation expectations on 5-10y have marginally increased from 2.9% to 3% (A peak to 3.1% in June was mentioned by Powell in FOMC decisions); 12-month inflation expectations have decreased from 5.2% to 5% y/y.
  • Sentiment on household financial situation has slightly improved, and notably income is expected to improve. Views on labor have turned more positive after some worries the prior month. Gas prices are expected to decline in the future.
  • Views on future economic situation have improved after some weakening the prior month.
  • Despite improving global sentiment, willingness to buy autos, houses and large items has decreased from the prior month.


UK: GDP (Q2-22): -0.1% q/q vs -0.2% expected (prior: 0.8%)

  • GDP has contracted over the quarter, but less than expected.
  • Consumption was down by 0.2% q/q after 0.6% in Q4-21; government consumption was down by 2.9% q/q after -1.3% q/q in Q4.
  • Positive surprises came from still sustained firms’ capex, up by 3.8% q/q after -0.6% q/q and positive net trade contribution to GDP (1 pp after -4pp in Q4), thanks to a decline in imports over the quarter.
  • Separately, GDP estimates for June was down by 0.6% q/q, due to slower activity in some sectors related to Jubilee. A return to positive activity is excited by July.
  • Activity in Q3 should benefit from more consumer-tourism spending (and positive calendar effect) but recession risks could increase again in Q4, with slower domestic demand and persistent high inflation while tail risk is fueled by concerns on energy shortage.


UK: Industrial production (June): -0.9% m/m vs -1.4% expected (prior: 1.3% revised from 0.9%)

  • Energy and electricity production was up over the month, while other manufacturing sector was down (-1.6% m/m), driven by the fall in intermediate and non-durable consumer goods activity.


Sweden: CPI (July): -0.2% m/m vs 0.1% expected (prior: 1.2%)

  • Food prices were up by 3.4% m/m after 1.7% the prior month, but all other major sectors have shown a contraction in prices, notably for oil and fuel prices. Core inflation was up by 0.4% m/m after 0.7% m/m the prior month.
  • Yearly trend has declined from 8.5% y/y to 8%y/y; trend in core inflation has accelerated from 6.1% y/y o 6.6% y/y.


Eurozone: Industrial production (June): 0.7% m/m vs 0.2% expected (prior: 2.1% revised from 0.8%)

  • Activity was firmer than expected and prior month data revised up.
  • A strong rebound in capital equipment and a modest positive activity in energy have more than compensated for the fall in consumer goods and intermediate sectors.
  • Some easing in industry disruption has fueled the past two months rebound in activity, but risks remain ahead.


France: CPI (July): 0.3% m/m as expected (prior: 0.9%)

  • Final data confirmed a decline in energy prices and clothes over the month, while prices for food were up by 1% m/m and services up by 1.3% m/m due to transport costs.
  • Yearly trend has accelerated from 6.5% y/y prior month to 6.8% y/y.


France: Unemployment rate (Q2-22): 7.4% vs 7.3% expected (prior: 7.3%)

  • Unemployed has slightly increased over the quarter and the unemployment ratio has also slightly increased; the ratio remained at low level.


Spain: CPI (July): -0.6% m/m vs -0.5% expected (prior: 1.9%)

  • A large fall in prices of clothes, energy-transport and communication over the month; monthly rises were centered on housing, leisure and restaurants prices.
  • Yearly trend has accelerated from 10% y/y the prior month to 10.7% y/y.


Poland: CPI (July): 0.5% m/m (prior: 1.5%)

  • Details offered mixed picture on prices with strong rises over the month on food, electricity, housing and leisure while also large monthly declines in clothes, transport and fuel energy prices.
  • Yearly trend has marginally increased from 15.5% y/y prior month to 15.6% y/y.


Turkey: Industrial production (June): 1.3% m/m vs 0% expected (prior: 0.5% revised from 0.5%)

  • Activity has rebounded in the manufacturing sector, up by 1.6% m/m (0.8% m/m the prior month); mining activity was negative over the past two months.
Thursday 11 August
US PPIs contacted in July, confirming peaking inflation

US: Initial jobless claims (Aug. 6): 262k vs 265k expected (prior: 248k revised from 260k)

  • Data remained high but volatile with past week downwards revisions.
  • Continuing claims: 1428 k after 1420 k.


US: PPI (July): -0.5% m/m vs 0.2% expected (prior: 1% revised from 1.1%)

  • A large fall in energy prices (-9% m/m after 9.4% m/m) has driven this first contraction in monthly PPI.
  • Other sectors have shown a moderation in monthly changes: services were up by 0.1% m/m after 0.3% m/m and transport-warehouse costs only up by 0.4% m/m after 0.7% m/m.
  • Prices of food have rebounded by 1% m/m after -0.2% m/m the prior month.
  • Core PPIs were up by 0.2% m/m after 0.3% m/m; several prices of finished goods entering into CPI have also moderated or declined over the month.
  • Yearly trend has declined from 11.3% y/y to 9.8% y/y and core PPI from 6.4% y/y to 5.8% y/y.
  • These PPI data confirmed the peak in inflation as future energy and prices of goods included in next CPI should continue to moderate on a monthly basis; the Fed should wait for this confirmation before adopting a new stance on strategy, but these data reinforce probability of a 50 bp rate hike in September.


UK: RICS house price balance (July): 63% vs 60% expected (prior: 65%)

  • Business sentiment has decreased further, but less than expected.
  • Sentiment has sharply fallen on future sales, while new buyers demand has continued to weaken.
  • The index has peaked since several months, but it remained at a still level compared to the past 10 years (except eh 2020-21 period).


Sweden: Unemployment rate (July): 3.2% (prior: 3.1%)

  • First month of rise in the unemployment ratio after a trend of regular decrease.


Turkey: Current account (June): -3.46bn USD vs -3.4bn expected (prior: -6.57bn revised from -6.47bn)

  • Trade deficit has decreased thanks to exports and tourism revenues compared to prior month.
  • Official reserves have decreased less than in the prior month (USD -1.9 bn after -5.9 bn).
Wednesday 10 August
US July inflation: flat over the month and declining yearly trend

US: CPI (July): 0% m/m vs 0.2% expected (prior: 1.3%)

  • Inflation has slowed more than expected, thanks to large contraction in energy prices over the month and some moderation in prices in other sectors.
  • Energy prices were down by 4.6% m/m after 7.5% m/m prior month (gasoline prices down by 7.7% m/m after 11.2% m/m). In parallel, prices of used cars and airline fares have also contracted over the month.
  • Food prices were up by 1.1% m/m after 1.6% m/m and total services prices were up by 0.3% m/m (0.9% m/m prior month). Housing prices (OER residences) were up by 0.6% m/m after 0.7% m/m.
  • Core inflation came lower than expected at 0.3% m/m after 0.7% m/m prior month (0.5% m/m expected).
  • Yearly trend has declined from 9.1% y/y to 8.5% y/y, and trend on core inflation remained stable at 5.9% y/y (6.1% y/y expected).
  • Positive surprises argue in favor of peaking inflation, and for a normalization in prices in some sectors, but data remained dependent on volatile prices in energy and on a still firm trend in services and in housing sectors.
  • These data would favor a 50 bp rate hike for the next FOMC meeting; next CPI data will be published just ahead of the Sept. FOMC meeting.


US: Wholesale inventories (June): 1.8% m/m vs 1.9% expected (prior: 1.9%)

  • Inventories have been rebuilt for autos and machinery, and also for non-durable goods.
  • Sales were strong over the month (1.8% m/m after 0.7% m/m the prior month), and dynamic for autos and machinery.
  • The inventory-sales ratio remained stable at 1.26.


Germany: CPI (July): 0.8% m/m as expected (prior: -0.1%)

  • Final data confirmed the first estimates; a strong rise in food, households’ energy and leisure prices, while prices of clothes, oil and transport have sharply declined over the month.
  • The yearly trend has accelerated further from 8.2% y/y the prior month to 8.5% y/y.


Italy: CPI (July): -1.1% m/m (prior: 1.2%)

  • Monthly prices have declined thanks to a sharp fall in prices of clothes (-21.4% m/m). Prices of transport and energy were up by 1.7% m/m.
  • Yearly trend has quite stabilized at 8.4% y/y after 8.5% y/y the prior month.


Sweden: Industrial production (June): 0.5% m/m (prior: 0.7%)

  • In parallel, activity in services was flat after 1.3% m/m the prior month.
  • Industrial orders were up by 1.3% m/m after -2.7% m/m prior month.


Norway: CPI (July): 1.3% m/m vs 0.9% expected (prior: 0.9%)

  • Prices have accelerated further over the month on food, transport-energy and household goods. Core inflation was up by 1.5% m/m after 0.5% m/m prior month.
  • Yearly trend has increased from 6.3% y/y prior month to 6.8% y/y, and from 3.6% y/y to 4.5% y/y on core inflation.


Turkey: Unemployment rate (June): 10.3% (prior: 10.6% revised from 10.9%)

  • Unemployed has declined over the month, while labor force and participation rate have also decreased.
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