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Daily Macroeconomic Digest

Wednesday 22 May
US: falling existing home sales; UK: declining inflation but resilient services

US: Existing home sales (April): 4.14M vs 4.23M expected (prior: 4.22M revised from 4.19M)

  • Sales have declined over the month driven by a fall by 2.1% m/m of single-family houses while sales of condos were flat.
  • Inventories have globally increased for all categories.
  • Median prices were up by 5.7% y/y after 4.8% y/y the prior month.


UK: CPI (April): 0.3% m/m vs 0.1% expected (prior: 0.6%)

  • Inflation was higher than expected due to a rebound in several services over the month.
  • Prices for energy and household goods were down over the month; good prices were down by 1.2% m/m but services were up by 1.5% m/m.
  • The rebound in services were driven by several sectors showing large monthly rebound, reflecting probably the rise in minimum wage: housing, transport, communication, holiday packages and travel, medical and education.
  • The yearly trend has declined further from 3.2% y/y the prior month to 2.3% y/y (2.1% was expected) and for core inflation from 4.2% to 3.9% y/y; services have just slightly decreased from 6% to 5.9% y/y.
  • As seen in the US, services could be resilient as demand for travel-leisure is cyclically better oriented, but disinflation trend is in place, and this could enable the BoE to begin to cut by next June or later in Aug. if BoE wants the confirmation of a real slowdown in service prices.


UK: PPI Input prices (April): 0.6% m/m vs 0.4% expected (prior: -0.2% revised from -0.1%)

  • Rise in input prices was due to the rebound in material prices.
  • Yearly trend has regained from -2.5% y/y the prior month to -1.6% y/y.


UK: PPI Output prices (April): 0.2% m/m vs 0.4% expected (prior: 0.2%)

  • Despite firm rises in prices of food and energy over the month, output prices have shown limited monthly rise.
  • Yearly trend has increased from 0.7% y/y the prior month to 1.1% y/y.


Poland: Industrial production (April): -2.2% m/m vs -2.9% expected (prior: 3.9% revised from 3.6%)

  • Activity has contracted over the month after a large rebound the prior month; all sectors except water were down over the month.
  • Yearly trend has turned better, being up by 7.9% y/y after -5.6% y/y the prior month.


Sweden: Unemployment rate (April): 8.5% vs 8.4% expected (prior: 8.6%)

  • Unemployed has marginally decreased over the month.
Tuesday 21 May
German producer prices drop more than expected

Germany: PPI (Apr): 0.2% m/m vs 0.3% expected (prior: 0.2%)

  • The rise in monthly producer prices was primarily driven by increases in Fuels and Heating oil (both up 2.5% m/m), while Energy saw a slight decrease of 0.1% m/m.
  • Annually, prices fell by 3.3%, following a 2.9% decline in the previous month, and contrary to market forecasts of a 3.2% drop.
  • This marked the tenth consecutive month of producer deflation, largely due to an 8.2% drop in energy costs, with natural gas plummeting 18.0% and electricity falling 14.0%.
  • In addition, intermediate goods prices declined by 3.1%, driven down by significant drops in paperboard and paper products (-7.7%), metals (-5.8%), and basic chemicals (-6.6%).
  • Conversely, non-durable consumer goods prices rose by 0.3%, durable consumer goods prices increased by 1.0%, and capital goods prices advanced by 2.4%, mainly due to a 2.8% rise in machinery prices and a 1.7% increase in motor vehicle prices.
Friday 17 May
Eurozone core inflation down in April

Eurozone: CPI (April F.): 0.6% m/m as expected (prior: 0.8%)

  • CPI y/y: 2.4% as expected (prior: 2.4%)
  • Core CPI y/y: 2.7% as expected (prior: 2.9%)
  • The final release confirmed that headline inflation remained at 2.4% in April and that core inflation declined to 2.7% from 2.9% in March.
  • Importantly, services price inflation fell to 3.7% after standing at 4.0% for five months.
  • Headline and core inflation should continue to drift downward in the coming months, and the ECB is very likely to cut rates in June.



Thursday 16 May
US: weak housing starts for single-family houses and flat industrial production

US: Initial jobless claims (May 11): 222k vs 220k expected (prior: 232k revised from 231k)

  • Continuing claims: 1794 k after 1781 k the prior week.


US: Housing starts (April): 1360k vs 1421k expected (prior: 1287k revised from 1321k)

  • Data have rebounded from the prior month but remained well below consensus expectations.
  • The monthly rebound was mainly driven by multi-family houses while single-family houses have modestly decreased (from 1035 k prior month to 1031 k).
  • Building permits have decreased for both categories, from 1485 k in aggregated terms to 1440 k.


US: Philadelphia Fed. (May): 4.5 vs 7.8 expected (prior: 15.5)

  • Business sentiment has decreased over the month; opinions have decreased on new orders, shipments and on prices paid.
  • The 6-month index has also decreased on lower new orders and prices paid; index remained constructive on shipments and employment.


US: Industrial production (April): 0% m/m vs 0.1% expected (prior: 0.1% revised from 0.4%)

  • Manufacturing production was down by 0.3% m/m after 0.2% m/m the prior month due to a large fall in auto and machinery production.
  • Activity in utility remained strong up by 2.8% m/m after 1.6% m/m prior month.


Italy: CPI (April): 0.5% m/m (prior: 1.2%)

  • Over the moth, prices of clothes and leisure services have accelerated while prices of electricity and communication were down.
  • Yearly trend has declined from 1.2% y/y the prior month to 0.9% y/y.


Norway: GDP Mainland (Q1-24): 0.2% q/q as expected (prior: 0.3% revised from 0.2%)

  • Activity has expanded thanks to manufacturing and services for oil industry.
  • By expenditure, consumption and investment were down over the quarter while public consumption was up.
Wednesday 15 May
US: inflation slightly lower than expected and weak retail sales

US: CPI (April): 0.3% m/m vs 0.4% expected (prior: 0.4%)

  • Inflation has come just slightly lower than expected over the month; core inflation was up by 0.3% m/m after 0.4% m/m the prior month.
  • Energy prices were up by 1.1% m/m as seen the prior month (higher gasoline prices); food was flat over the month and prices of goods remained in contraction (down by 0.1% m/m after -0.2% m/m); within this sector, prices for furniture and cars were down but prices of apparels remained on sustained monthly rise.
  • Services were up by 0.4% m/m after 0.5% m/m prior month; shelter remained on stable trend (0.4% m/m), while modest easing in month-to-month change was seen for medical care (from 0.6% m/m to 0.4% m/m), transport services (from 1.5% m/m to 0.9% m/m); on the opposite, recreation (0.3% m/m) and other personal services (1.1% m/m) have accelerated.
  • Yearly trend has declined from 3.8% y/y prior month to 3.6% y/y and from 3.5% to 3.4% y/y for core inflation.
  • Inflation remained above 3% y/y and services continue to drive the trend; nevertheless, monthly changes in services have moderated from the prior month; more of decline/moderation in services is needed for the Fed to rebuild high confidence on disinflation trend.


US: NY Empire manufacturing (May): -15.6 vs -10 expected (prior: -14.3)

  • Both sentiment on current situation and the 6-month index have decreased over the month.
  • Opinions have decreased on new orders, employment, and prices, while those on shipments have slightly regained.


US: Retail sales (April): 0% m/m vs 0.4% expected (prior: 0.6% revised from 0.7%)

  • Core sales (ex-building materials, autos, food, and energy) were down by 0.3% m/m after 1% m/m.
  • Sales were down for autos (main negative contribution to the monthly fall), and for furniture and sport.
  • Sales were on positive trend over the past month for gasoline and building materials and have rebounded over the month on electronics and clothes.
  • Moderation in sales may fuel the idea the economy is not overheating; nevertheless, sales reflect weak momentum in purchases of goods, while demand may remain sustained in services (not included in these monthly sales data).


US: Business inventories (March): -0.1% m/m vs 0.1% expected (prior: 0.3% revised from 0.4%)

  • Inventories were down for wholesalers but on the rise for retailers and manufacturing sectors; the trend remained on the rise for the auto sector, and it has also increased for general merchandise.
  • Total sales have increased, and the inventory-to-sales ratio remained globally stable.


US: NAHB housing market index (May): 45 vs 50 expected (prior: 51)

  • Sentiment has turned abruptly negative on all components of housing demand due to the rise seen past months on mortgage rates.
  • The index was back to its Jan. level.


Eurozone: Industrial production (March): 0.6% m/m vs 0.4% expected (prior: 1.0% revised from 0.8%)

  • Production has rebounded more than consensus was expecting during the month.
  • Nevertheless, the rebound was centred on capital goods, while other sectors have contracted, particularly energy and consumer goods.
  • Irish production remained highly volatile and was up by 12% m/m, while industrial activity was down in the 4 major countries of the area.


France: CPI (April): 0.6% m/m as expected (prior: 0.2%)

  • Monthly changes remained sustained and in line with first estimates. Prices of clothes, oil, and services (transport) were firmer over the month.
  • Yearly trend remained stable at 2.4% y/y.


Poland: CPI (April): 1.1% m/m vs 1% expected (prior: 0.2%)

  • Prices have accelerated over the month, due to several sectors; prices were firmer for food, clothes, transport-fuel, and services to tourism.
  • Yearly trend has re-accelerated to 2.4% y/y from 2.0% y/y the prior month.


Poland: GDP (Q1-24): 0.4% q/q vs 0.6% expected (prior: -0.1% revised from 0%)

  • GDP has rebounded after a contraction in Q4-23; no details by sector were available but services have probably driven the Q1 rebound, while other sectors were weak.


Sweden: CPI (April): 0.3% m/m vs 0.4% expected (prior: 0.1%)

  • Prices have regained over the month for clothes, health, and restaurants-hotels.
  • Yearly trend has regained from 2.2% y/y the prior month to 2.3% y/y; core inflation remained stable at 2.9%y/y.
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