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Daily Macroeconomic Digest

Friday 22 October
UK PMI in rebound; weakening PMI in the eurozone while mixed in the US: firmer services, but lower sentiment in manufacturing

US: Markit Manufacturing PMI (Oct.): 59.2 vs 60.5 expected (prior: 60.7)

  • Preliminary sentiment has weakened from the prior month, due to remaining sharp constraints on production due to shortages and bottlenecks.
  • New orders have also decreased, while costs remained on a rising trend with commodity prices, wages and logistic costs.
  • The global PMI index remained at a high level.


US: Markit Services PMI (Oct.): 58.2 vs 55.2 expected (prior: 54.9)

  • A rebound in demand has driven the preliminary sentiment in services up over the month, after some weakening prior months.
  • Labor shortages and transport bottlenecks have nevertheless weighed down on some components. Employment was on the rise and global costs continued to increase.


UK: GFK consumer confidence (Oct.): -17 vs -16 expected (prior: -13)

  • Sentiment has fallen more than expected and the index was on falling trend after a rebound in past quarter.
  • Sharp deteriorating economic outlook and weakening personal financial situation have driven the index lower; willingness to buy has decreased.


UK: Retail sales (Sept.): -0.2% m/m vs 0.6% expected (prior: -0.6% revised from -0.9%)

  • Sales have declined more than expected over the month; sales ex gasoline were down by 0.6% m/m after -0.7% m/m the prior month, despite a strong rebound in clothes purchases (4.3% m/m).
  • Signs of slowdown in domestic demand have multiplied; raising rates as a response to higher inflation will add monetary constraints to already uncertain economic/virus situation.


Eurozone: PMI Manufacturing (Oct.): 58.5 vs 57.1 expected (prior: 58.6)

  • Preliminary index has pointed towards quite stable confidence despite remaining headwinds in industry.
  • French index has decreased more than expected (53.5 after 55 prior month), while German index (58.2 after 58.4) was quite stable.
  • Disruption and bottlenecks may impact differently sectors and countries, depending on the sector positioning, so volatile data could be seen until constraints fade.
  • Costs remained on a strong rise, and firms have accelerated pass through to final clients when possible. Labor is better oriented to partly solve disruption problems.


Eurozone: PMI Services (Oct.): 54.7 vs 55.4 expected (prior: 56.4)

  • Preliminary index has pointed towards renewed weakness in the service sector.
  • German index has sharply declined over the month (52.4 after 56.2), while the French index has slightly increased (from 56.2 to 56.6) according to first estimates.
  • Waning demand after the summer period and similar constraints in activity have driven sentiment lower.


UK: PMI Manufacturing (Oct.): 57.7 vs 56 expected (prior: 57.1)

  • A stronger than expected rebound in sentiment; despite rising constraints on supply chain and production; sentiment has regained on new orders and on rising pre-production inventories. Delivery time has increased further as well as costs and wages, as labor has continued to show shortages.


UK: PMI Services (Oct.): 58 vs 54.5 expected (prior: 55.4)

  • Demand has rebuilt, from both domestic after the end of pandemic restrictions and from foreign clients, with looser travel restrictions. New business has increased.
  • Costs, wages and prices remained on a sustained rise.
Thursday 21 October
US: lower Philly Fed versus lower jobless claims and firmer existing home sales

US: Initial jobless claims (Oct. 16): 290k vs 297k expected (prior: 296k revised from 293k)

  • Continuing claims: 2481 k after 2603 k prior week.


US: Philadelphia Fed. (Oct.): 23.8 vs 25 expected (prior: 30.7)

  • Sentiment has weakened from the prior month; highly volatile components due to still high constraints on production and delivery in the short run and related volatility on orders, inventories and employment.
  • Some components as new orders were volatile but less negative than headline index


US: Existing home sales (Sept.): 6.29M vs 6.1M expected (prior: 5.88M)

  • Sales have regained more than expected over the month; sales have increased in all major districts and inventories have declined.
  • Prices remained high, the yearly trend being up by 13.3% y/y.


France: Business confidence (Oct.): 113 vs 110 expected (prior: 111)

  • Global confidence index has regained from the prior month, while manufacturing index remained stable.
  • Sentiment on production was stable but it has turned less negative on both domestic and foreign orders.
  • Separately, the index on services has regained over the month after weakening trend.
  • The global index remained close to its highest levels (June 2021; end of 2017).


Eurozone: Consumer confidence (Oct.): -4.8 vs -5 expected (prior: -4)

  • Preliminary index has pointed to some decline in confidence, probably reflecting deteriorating purchasing power and uncertain economic outlook.


Switzerland: M3 (Sept.): 3.2% y/y vs 3.1% expected (prior: 3.2%)

  • Monetary aggregates remained on stable trend; on the opposite, M1 pace has accelerated from 5.8% y/y the prior month to 6.1% y/y.


Sweden: Unemployment rate (Sept.): 8.8% vs 8.6% expected (prior: 8.8%)

  • Unemployed has slightly declined over the month, but the unemployment ratio has remained stable.


Turkey: Consumer confidence (Oct.): 76.8 (prior: 79.7)

  • Sentiment has declined over the month, and the index was back to its low level.
  • The decrease was broad-based across components and driven lower by a sharp fall in financial situation and future economic outlook.


Poland: Retail sales (Sept.): -2.4% m/m vs -2.5% expected (prior: -1%)

  • Picture was mixed across products over the month: rising sales for autos, pharma and households but sharp decline in other sectors. Yearly trend was quite stable around 5.1% y/y.
Wednesday 20 October
UK inflation: moderate in September, but to continue to rise next month


UK: CPI (Sept.): 0.3% m/m vs 0.4% expected (prior: 0.7%)

  • Monthly change remained below expectations; prices of clothes were up by 2% m/m, housing up by 1% m/m while transport and holidays packages were down over the month and energy prices only up by 0.2% m/m.
  • Yearly trend was quite stable at 3.1% y/y after 3.2% y/y the prior month.
  • Upside risks remained in place (4-5% y/y) due to rising energy prices and costs of disruption in trade-industry to impact next data, but these data could give some patience to BoE before the first lifting in key rates.


UK: PPI Input prices (Sept.): 0.4% m/m vs 1% expected (prior: 0.5% revised from 0.4%)

  • Monthly rise was more limited than expected; prices of fuels purchased were down by 3.7% m/m.
  • Yearly trend has just slightly accelerated from 11.2% y/y the prior month to 11.4% y/y.


UK: PPI Output prices (Sept.): 0.5% m/m as expected (prior: 0.7%)

  • Prices were in line with expectations; coke and oil prices were up by 1.5% m/m.
  • Yearly trend has accelerated from 6% y/y the prior month to 6.7% y/y.


Eurozone: CPI (Sept.): 0.5% m/m as expected (prior: 0.4%)

  • Inflation has been confirmed up by 0.5% m/m; while food prices were down by 0.1% m/m, energy prices were up by 1.3% m/m and manufactured goods ex energy up by 2.3% m/m; prices of services were down by 0.6% m/m.
  • Yearly trend was up by 3.4% y/y after 3% the prior month. Core inflation was up by 1.9% y/y after 1.6% y/y the prior month.
  • Prices of energy rise should push yearly trend above 4% y/y; more time will be needed to see significant decline next year. The ECB will be obliged to revise up its inflation forecasts in its next meeting


Germany: PPI (Sept.): 2.3% m/m vs 1.1% expected (prior: 1.6%)

  • Prices ex energy were up by only0.4% m/m after 1% m/m the prior month.
  • Yearly trend has accelerated further, from 12% y/y prior month to 14.2% y/y.


Poland: PPI (Sept.): 0.7%m/m vs 0.6% expected (prior: 0.7% revised from 0.6%)

  • Sustained monthly rise due to higher prices of manufactured goods, gas and electricity.
  • Yearly trend has accelerated further from 9.6% y/y to 10.2% y/y.


Poland: Industrial production (Sept.): 11% m/m vs 10.2% expected (prior: -2.5%)

  • Industrial activity has rebounded on all major sectors during the month. Activity remained highly volatile during the pandemic and the reopening process.
Tuesday 19 October
US housing starts weaker than expected

US: Housing starts (Sept.): 1555k vs 1615k expected (prior: 1580k revised from 1615k)

  • Data have declined versus expectation of stable trend, and past month data were also revised down; despite some improvement in other indicators in housing, housing starts and building permits have shown volatile and weak trend in prior months.
  • The major part of the monthly slowdown in building permits (from 1721 k prior month to 1589 k) and starts was coming from multifamily houses, while data on single family have stabilized on housing starts.


Switzerland: Trade balance (Sept.): 5.05 Bn CHF (prior: 5.13Bn)

  • Trade surplus has moderated from the prior month due to rising nominal imports and declining nominal exports over the month.
  • In real terms, exports were up by 0.4% m/m, while imports were down by 0.8% m/m; changes in prices have reduced the monthly trade surplus.
Monday 18 October
US: industrial activity suffered from disruption and hurricane impact

US: Industrial production (Sept.): -1.3% m/m vs 0.1% expected (prior: -0.1% revised from 0.4%)

  • Activity was weak, and past month data revised lower, due to negative impact of disruption in different sectors.
  • Except machinery, activity has contracted in all other sector, and more particularly autos (-7% m/m) and also utility (electricity down by 3.9% m/m). Hurricane had also negative impact in some sectors, such as chemicals and energy.
  • Industrial activity should progressively improve, but at different speed across sectors.


US: NAHB housing market index (Oct.): 80 vs 75 expected (prior: 76)

  • Sentiment has rebounded, back to the levels seen in July; opinions on present and future sales have rebounded from the previous month.


Poland: Core inflation (Sept.): 0.7% m/m vs 0.6% expected (prior: 0.2%)

  • As seen in headline prices, core prices have accelerated on a monthly and yearly basis; yearly trend was up by 4.2% y/y after 3.9% y/y the prior month.


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Insight 14.10.2021

UBP’s “wish list” for the UN Biodiversity Conference (COP15)

London, 12 October 2021 - With the UN Biodiversity Conference (COP15) under way this week in Kunming, China, Union Bancaire Privée’s (UBP) Impact Investing team has called on delegates to match their ambitions on the protection of global biodiversity by issuing four “wishes” for commitments at the Conference.