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Daily Macroeconomic Digest

Friday 24 June
US and UK consumer confidence indices to new all-time lows, IFO index slighly worse than expected

US: New home sales (May): 696k vs 590k expected (prior: 629k revised from 591k)

  • Purchases of new homes increased 10.7% m/m, (vs -0.2% expected) despite a strong upward revision for April.
  • This suggests that many Americans still have the desire (and the wherewithal) to buy a home despite the surge in mortgage rates and prices.


US: Consumer confidence (Michigan) (June F.): 50.0 vs 50.2 expected (prior: 58.4)

  • The gauge of current conditions declined further late in the month (to 53.8 from a preliminary estimate of 55.4) to a new all-time low.
  • The measure of future expectations inched higher from the first estimate, but remains very close to the lowest on record.
  • Long run inflation expectations, which was one of the key factor behind the Fed's decisions to hike by 75 bp instead of 50bp was revised lower from 3.3% to 3.1% (Powell had acknowledged that the preliminary number could be revised).
  • This pessimism on the economy and personal finance is arguably going to weigh on consumer spending in the coming months.


UK: GFK consumer confidence (June): -41 vs -40 expected (prior: -40)

  • Consumer confidence has slightly deteriorated to a record low on already depressed levels; economic and personal financial situation have both deteriorated on both past and future conditions.


UK: Retail sales (May): -0.5% m/m vs -0.7% expected (prior: 0.4% revised from 1.4%)

  • Sales were volatile over the past month and have strongly reversed the prior month.
  • Except clothes, all other sectors have contracted during the month, including internet sales.


Germany: IFO (June): 92.3 vs 92.8 expected (prior: 93)

  • Sentiment has declined more than forecasted; expectations have deteriorated further, the signal being already in "recession" mode"  in past months. Views on current situation have decreased less than expected.
  • By sector, sentiment remained negative in trade and construction, decreased in manufacturing and stayed surprisingly quite positive in services
Thursday 23 June
Business confidence: PMIs still above 50, but large deterioration from the prior month in manufacturing and services in US and the eurozone

US: Initial jobless claims (June 18): 229k vs 226k expected (prior: 231k revised from 229k)

  • Continuing claims have increased from 1310 k the prior week to 1315 k.
  • Jobless claims have bottomed in March (166 k) and increased regularly thereafter; they are now above the levels seen in Jan 2022 (224 k at early Jan.).


US: Manufacturing PMI (June): 52.4 vs 56 expected (prior: 57)

  • Momentum has deteriorated in services after the rebound post lockdown; new orders have deteriorated on falling new demand and export orders.
  • Costs remained on the rise, but pace of rising input costs and final selling prices has slowed down compared to prior months.
  • Employment has eased after positive momentum the prior months.


US: Services PMI (June): 51.6 vs 53.3 expected (prior: 53.4)

  • The fall in sentiment was larger than expected from the prior month; production and new orders have contracted for the first time since past crisis and export orders have also contracted.
  • Costs remained on the rise but selling prices have made limited passthrough to clients. Employment remained positive but some firms have not replaced leavers.


Eurozone: PMI Manufacturing (June): 52 vs 53.8 expected (prior: 54.6)

  • Business confidence has declined more than expected from the prior month. The index fell from 54.6 to 51 in France and from 54.8 to 52 in Germany according to preliminary data.
  • News orders turned flat over the month and production has declined; shortages in supply still exist even delays have improved somewhat from China; business expectations have fallen and pressures from costs remained in place; selling prices have increased at a slower pace from the prior months.
  • Job creations have slowed down.


Eurozone: PMI Services (June): 52.8 vs 55.5 expected (prior: 56.1)

  • A huge slowdown from the prior month, after a rebound in demand post lockdown.
  • Demand has declined and lost momentum after positive effects with the end of lockdown. Demand from consumers has peaked while demand from firms to services has declined in parallel with lower trend in manufacturing.
  • Costs and prices remained on a strong rise.


France: Business confidence (June): 104 vs 105 expected (prior: 106)

  • Business confidence has marginally declined over the month; within the manufacturing sector, confidence has marginally increased over the month.
  • Production was still strong but orders, both domestic and foreign, stayed depressed.
  • The decline in this index looks more moderated than in the preliminary PMI.


UK: PMI Manufacturing (June): 53.4 vs 53.6 expected (prior: 54.6)

  • Business confidence has declined but was close to expectations; opinions on production have decreased and new orders index passed below 50; demand has decreased in relation with higher inflation.
  • Costs remained on the rise, due to energy and shortages, and selling prices have increased further.


UK: PMI Services (June): 53.4 vs 52.9 expected (prior: 53.4)

  • Opinions on services remained surprisingly stable; this was due to past events and still sustained demand from consumers.
  • Employment remained positive and shortages still active; rising wages and shortages have driven costs higher and prices to final clients have increased further.


Norway: Unemployment rate (Apr.): 3.2% (prior: 3.1% revised from 2.9%)


Norway: The Norges bank has increased key rates from 0.75% to 1.25%.

  • With rising concerns on inflation, the bank has increased more than expected its key rates and has pre-committed of another rise in Aug.


Wednesday 22 June
UK high inflation in place; falling consumer confidence in the eurozone

UK: CPI (May): 0.7% m/m as expected (prior: 2.5%)

  • Data were in line with expectations, but monthly rises remained sustained; the monthly change was fueled by higher prices for food, clothes, household goods and restaurants- hotels.
  • Yearly trend was quite stable at a high level: 9.1% y/y after 9% y/y the prior month. Core inflation has declined from 6.2% y/y the prior month to 5.9% y/y.
  • Headline inflation should remain in a 9-10% y/y range over the next months and the BoE should continue to hike.


UK: PPI Input prices (May): 2.1% m/m vs 1.8% expected (prior: 2.7% revised from 1.1%)

  • After strong rise in fuel the prior month (upward revision), prices of energy have come down, but prices for materials remained sustained.
  • Yearly trend has accelerated further from 20.9% y/y the prior month to 22.1% y/y.


UK: PPI Output prices (May): 1.6% m/m vs 1.5% expected (prior: 2.8% revised from 2.3%)

  • Prices were driven up by oil-energy and food sectors over the month.
  • Yearly trend has accelerated from 14.7% y/y prior month to 15.7%.
  • Upside pressures on prices remained in place for CPI, with rotation across sectors on the rise.


Sweden: Unemployment rate (May): 7.8% vs 7.6% expected (prior: 7.8% revised from 7.7%)

  • The unemployment ratio has slightly increased the prior month and remained stable over the month; unemployment has slightly increased over the month.


Eurozone: Consumer confidence (June): -23.6 vs -20.5 expected (prior: -21.2 revised from -21.1)

  • Confidence has declined again, close to the lows seen in 2020 (index at -24.4) in preliminary estimates (no details offered).
  • After some stabilization on low levels, consumer has decreased further with ongoing pressure from inflation and global risks.


Poland: Retail sales (May): -1.7% m/m vs -1.9% expected (prior: -0.1%)

  • Real sales were down over the month due to fall in autos, fuels, food and household goods.


Turkey: Consumer confidence (June): 63.4 (prior: 67.6)

  • Confidence has declined to reach new lows; broad-based decline in components, and rising concerns on future economic situation and personal financial situation.
Tuesday 21 June
US existing home sales on decline but prices remained elevated

US: Existing home sales (May): 5.41M vs 5.4M expected (prior: 5.6M revised from 5.61M)

  • Sales of single-family houses have declined by 3.6% m/m and condos down by 1.6% m/m. Total sales were back to their 2019 level.
  • Inventories have increased on slower sales; median prices have increased from the prior month and remained up by 14.8% y/y.
  • First-time buyers have declined since the rise in rates and investors share in total sales have also decreased since Jan.


Switzerland: M3 (May): 0.1% y/y vs -0.1% expected (prior: 0.1%)

  • Growth pace of monetary aggregates has slowed down over the past months to be now flat y/y.
  • M1 growth has slowed down from 3.6% y/y to 3.3% y/y; M2 growth has slowed down from 0.3% y/y to 0.2% y/y.


Switzerland: Trade balance (May): 3.12 Bn CHF (prior: 4.03Bn)

  • Real exports: 2.4% m/m after -0.2% m/m the prior month; real imports: 7.1 % m/m after -4.2% m/m prior month.


Poland: Industrial production (May): 1.4% m/m vs 2.5% expected (prior: -11.7% revised from -11.3%)

  • Production of electricity has sharply declined, but activity in manufacturing sector was up by 3.2% m/m.
  • High volatility in activity over the month and across sectors.


Poland: PPI (May): 1.3%m/m vs 2% expected (prior: 1.5% revised from 1.9%)

  • Prices in manufacturing and construction have rebounded over the month; yearly trend has accelerated further from 24.1% y/y the prior month to 24.7% y/y.
Monday 20 June
German PPI: still sustained, but different pace in monthly changes across sectors

Germany: PPI (May): 1.6% m/m vs 1.5% expected (prior: 2.8%)

  • Monthly changes have moderated from the prior month but remained sustained in absolute terms.
  • Changes across sectors have shown different pace over the month, with some sector peaking.
  • Energy prices have increased by 2.5% as in the prior month; prices of basic goods and consumer goods were sustained (1.5% m/m) but on a slower pace than the prior month (3.5%-4% m/m).
  • Prices of capital goods were up by 0.5% m/m after 1.2% m/m.
  • Yearly trend has stabilized at 33.6% y/y.
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