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Daily Macroeconomic Digest

Wednesday 19 June
UK headline inflation back to 2%

US: NAHB housing market index (June): 43 vs 46 expected (prior: 45)

  • Unexpected decline to the lowest level this year as high mortgage rates (around 7%) continue to keep many potential buyers on the sidelines.


UK: CPI (May): 0.3% m/m vs 0.4% expected (prior: 0.3%)

  • CPI y/y: 2.0% as expected (prior: 2.3%)
  • Core CPI: 3.5% y/y as expected (prior: 3.9%)
  • Figures broadly in line with expectations and CPI back on target for the for the first time in 3 years, but services prices were again stronger than expected at +5.7% y/y after 5.9% in April.
  • This still high services inflation is notably explained by rising prices in restaurants and hotels as a result of higher wages in addition to higher rents and fuel costs.
  • On the other hand, core goods has entered outright deflation, contracting 0.1% y/y.
  • The BoE will keep rates unchanged tomorrow (also given the elections), while a first rate cut in August remains uncertain due to this still high inflation in the services.


UK: PPI Output prices (May): -0.1% m/m vs 0.1% expected (prior: 0.3% revised from 0.2%)

  • Y/y: 1.7% as expected (prior: 1.1%)
  • Pipeline inflation pressures remain muted.
Tuesday 18 June
US: weaker retail sales than expected, but firmer industrial activity

US: Retail sales (May): 0.1% m/m vs 0.3% expected (prior: -0.2% revised from 0%)

  • Sales were lower than expected and prior month data were revised lower.
  • Details offered a mixed and volatile picture: sales were stronger over the month for autos, sport and internet sales but have turned negative or weakened for furniture, building materials, gasoline, and food.
  • Core sales (sales ex autos, building materials, food, and gasoline) were up by 0.4% m/m after -0.5% m/m the prior month (-0.3% m/m the previous estimate).
  • Purchases of goods remained globally weak with a high rotation by sector on a monthly basis.


US: Industrial production (May): 0.9% m/m vs 0.3% expected (prior: 0%)

  • A strong monthly rebound in the auto, machinery, and electricity sectors. Manufacturing production was also up by 0.9% m/m after -0.4% m/m the prior month.


Eurozone: CPI (May): 0.2% m/m as expected (prior: 0.6%)

  • Final data have confirmed moderate monthly change after a strong advance the prior month.
  • Energy prices were down by 1.2% m/m after 0.3% m/m the prior month; prices of goods were flat after 0.5% m/m. services remained strong, up by 0.7% m/m after 0.8% m/m the prior month. Transport costs were fuelled by rises in Germany on travel and holidays package.
  • Core inflation was up by 0.4% m/m after 0.7% m/m.
  • Yearly trend has regained from 2.4% to 2.6% y/y and core inflation from 2.7% y/y to 2.9% y/y. Inflation remains too high for a new ECB rate cut in next July meeting.


Germany: Zew (June): 47.5 vs 50 expected (prior: 47.1)

  • Expectations have increased from the prior month but less than expected. The related index has recovered to the high levels seen in H2-2020/2021.
  • Sentiment on current situation has deteriorated further and the index remained close to the lows seen in H1-2020.
  • By sector, expectations have improved for electronics, IT, telco, and engineering but have decreased for autos and chemicals.
Monday 17 June
US New York Empire manufacturing turned less negative

US: Empire manufacturing (June): -6 vs -10 expected (prior: -15.6)

  • Sentiment on current situation was less negative than the prior month; the 6-month views have strongly rebounded (index up from 14.5 to 30.1).
  • On current conditions, new orders were less negative than prior month, but employment and workweek have decreased; prices were also on moderation, but the related index remained high.
  • The rebound in the 6-month views was coming from a large rebound in new orders shipments, and some gains in employment; prices have shown some moderation.


Italy: CPI (May): 0.2% m/m as expected (prior: 0.5%)

  • Final data were in line with expectations.
  • By sector, the picture has diverged between declines in prices for utilities, household goods, transport, and communication while prices were up for food, hotels-restaurants, and leisure over the month.
  • Yearly trend has marginally declined from 0.9% the prior month to 0.8% y/y.



Friday 14 June
Falling US consumer sentiment (Michigan survey)

US: Consumer confidence (Michigan) (June): 65.6 vs 72 expected (prior: 69.1)

  • Contrary to expectations, consumer sentiment has deteriorated from the prior month in first estimate.
  • Sentiment on both current situation and expectations have decreased over the month.
  • Opinions have decreased on financial situation due to still perception of a high inflation; rising rates is a concern for financial situation and future economy is seen to deteriorate.
  • Opinions about the government doing "a good job on inflation" has again deteriorated.
  • Willingness to buy autos, houses and large items have decreased from the prior month.
  • Inflation expectations have slightly increased for 5-10y inflation from 3.0% to 3.1%; 12-month inflation was stable at 3.3%y/y.


France: CPI (May): 0.1% m/m vs 0.2% expected (prior: 0.6%)

  • Final estimate for inflation has shown some moderation on a monthly basis; prices of fresh food were sustained over the month but more than balanced by the decline in energy prices (-1.2% m/m after -0.3% m/m).
  • Services were up by 0.1% m/m (1.0% m/m the prior month) and prices for goods were up by 0.1% m/m (flat the prior month).
  • Yearly trend has regained from 2.4% y/y prior month to 2.6% y/y. Energy prices were up by 5.7% y/y and services were up by 2.8% y/y.


Poland: CPI (May): 0.1% m/m as expected (prior: 1.1%)

  • Inflation has moderated on a monthly basis (final estimate) but prices across sectors have diverged: prices have increased for food, health and restaurant-hotels, while prices declined for clothes, energy, transport and recreation sectors.
  • Yearly trend has regained from 2.4% y/y the prior month to 2.5% y/y.


Sweden: CPI (May): 0.2% m/m vs -0.1% expected (prior: 0.3%)

  • Prices were more sustained than expected over the month.
  • Prices have regained for clothes, transport, and tourism over the month, while prices declined for housing, health, goods, and communication.
  • Yearly trend remained unchanged at 2.3% y/y.
Thursday 13 June
US Producer Prices on decline in May

US: Initial jobless claims (June 8): 242k vs 225k expected (prior: 229k)

  • Continuing claims: 1820 k after 1790 k the prior week.


US: PPI (May): -0.2% m/m vs 0.1% expected (prior: 0.5%)

  • Prices were sharply down over the month for food, energy, and warehouses; prices of goods were up by 0.3% m/m after 0.2% m/m the prior month, but services were flat (0.6% m/m the prior month).
  • Core PPIs were flat over the month after 0.5% m/m the prior month.
  • Yearly trend has declined from 2.3% y/y the prior month to 2.2% y/y.
  • PPI release was a positive surprise as did the CPI and pointed to moderate monthly rise (0.10-0.13% m/m) in next core PCE, which should give more comfort to the Fed.


UK: RICS house price balance (May): -17% vs -5% expected (prior: -7% revised from -5%)

  • Sentiment has deteriorated over the month after a regular improvement in past months.
  • Opinions on sales have increased but new buyers’ traffic has declined from the prior month, probably related to prospects of new elections.


Switzerland: PPI-import prices (May): -0.3% m/m (prior: 0.6%)

  • Import prices were flat over the month (0.9% m/m the prior month) while producer prices were down by 0.5% m/m (0.4% m/m the prior month).
  • Aggregated prices remained on negative territory as the prior month, down by 1.8% y/y.


Eurozone: Industrial production (April): -0.1% m/m vs 0.2% expected (prior: 0.5% revised from 0.6%)

  • Production was driven lower over the month by the fall in production of intermediate goods; productions of energy, equipment goods and consumer goods were more positive than prior month.


Germany: PPI (May): 0.1% m/m (prior: 0.4%)

  • Yearly trend remained negative, down by 0.7% y/y after -1.8% y/y the prior month.


Spain: CPI (May): 0.2% m/m as expected (prior: 0.6%)

  • Prices were confirmed up by 0.2% m/m; monthly trend has diverged between new rises in housing and hotels-restaurants vs a decline in prices for communication and transport. Core inflation was up by 0.3% m/m after 0.6% m/m the prior month.
  • Yearly trend has re-accelerated from 3.4% y/y the prior month to 3.8% y/y. Core inflation remained stable at 3.0 %y/y.


Brazil: Retail sales (April): -1% m/m vs 0.3% expected (prior: -0.2% revised from -0.3%)

  • Broad sales have contracted over the month, due to weak wholesales, while core sales were firmer thanks to vehicles, communication, furniture, and fuel over the month.
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