Daily Macro Digest

mardi 19 septembre
Significant increase in US building permits, rising optimism among German investors

US: Housing starts (Aug.): 1180k vs 1174k expected (prior: 1190k revised from 1155k)

  • Building permits: 1300k vs 1220k expected (prior: 1230k revised from 1223k)
  • Encouragingly, the level of building permits now matches the two-year high pace in February. The regional breakdown of the report suggested only modest hurricane effects.

US: Import price index (Aug.): 0.6% m/m vs 0.4% expected (prior: -0.1% revised from 0.1%)

  • Import prices y/y: 2.1% vs 2.2% expected (prior: 1.2% revised from 1.5%)
  • Most of the increase reflected gains in imported petroleum prices (+4.8% m/m), consistent with the recent increase in oil prices.
  • Import prices excluding the volatile petroleum component rose 0.3% m/m. The y/y change in core import prices is 1.0%, a modest uptick from the 0.8% pace in July.


Germany: Zew (Sept.): 17.0 vs 12.0 expected (prior: 10.0)

  • Current situation: 87.9 vs 86.2 expected (prior: 86.7)
  • Expectations of the future economic situation increased for the first time since May 2017, which probably reflects optimism regarding a potential Angela Merkel-led coalition given recent opinion polls.


Russia: Unemployment rate (Aug.): 4.9% vs 5.1% expected (prior: 5.1%)

  • The unemployment rate has fallen almost consistently since March and reached in August its lowest level in three years.

Russia: Real wages (Aug.): 3.7% y/y vs 3.8% expected (prior: 3.1% revised from 4.6%)

Russia: Retail sales (Aug.): 1.9% y/y vs 1.1% expected (prior: 1.2% revised from 1.0%)

  • The slowdown in inflation as well as the strength of the rubble appears to be boosting consumer demand.


lundi 18 septembre
Weakening sentiment in US housing

US: NAHB housing market index (Sept.): 64 vs 67 expected (prior: 67 revised from 68)

  • Sentiment has weakened on present and future sales, related to damages due hurricanes and rising costs of construction materials.


Eurozone: CPI (Aug.): 0.3% m/m as expected (prior: -0.5%)

  • Inflation has been confirmed up by 0.3% m/m, as expected on flash estimate. Headline inflation was up by 1.5% y/y, thanks to the rebound in energy prices.
  • Core inflation was up by 0.3% m/m, but its yearly trend was stable at 1.2% y/y.
  • Inflation is expected to stay in a 1.2%-1.5% y/y range in Q4.
vendredi 15 septembre
US hard data distorted by Harvey but consumption appears to have slowed down

US: Consumer confidence (Michigan) (Sept. Prel.): 95.3 vs 95.0 expected (prior: 96.8)

  • Current conditions: 113.9 vs 108.0 expected (prior: 110.9)
  • Expectations: 83.4 vs 83.0 expected (prior: 87.7)
  • Charlottesville, North Korea and Hurricane Harvey does not appear to have quelled the confidence of US consumers. However, the report suggests that too few interviews were conducted after Harvey/Irma to fully assess its impact on confidence, so there’s a possibility that the revised September reading will be lower.

US: Retail sales (Aug.): -0.2% m/m vs 0.1% expected (prior: 0.6%)

  • Ex auto and gas: -0.1% vs 0.3% expected (prior: 0.5%)
  • This much weaker-than-expected report probably reflects a drag from Hurricane Harvey and payback from record Amazon Prime Day sales in July. Nonetheless, the level of core retail sales in prior months was also revised down meaningfully, suggesting a slower pace of consumption growth.
  • Some of this weakness should reverse in Q4 as sales activity rebounds in storm-affected regions.

US: Industrial production (Aug.): -0.9% m/m vs 0.1% expected (prior: 0.4% revised from 0.2%)

  • The Fed estimates that almost the entire decline was attributable to Hurricane Harvey, which struck late in the month.

US: Empire manufacturing (Sept.): 24.4 vs 18.0 expected (prior: 25.2)

  • The level of activity in the New York region remains close to the highest level in almost three years. Encouragingly, new orders rose to its highest reading since October 2009.
jeudi 14 septembre
Firmer US inflation than expected; no change in SNB and BoE strategy

US: Initial jobless claims (Sept. 9): 284k vs 300k expected (prior: 298k)

  • Continuing claims: 1944 k after 1951 k past week.
  • Texas and Louisiana were impacted by Harvey hurricane, adding volatility to weekly claims.


US: CPI (Aug.): 0.4% m/m vs 0.3% expected (prior: 0.1%)

  • Inflation has surprised by firmer data due to prices of energy, transport and housing.
  • Core inflation was up by 0.2% m/m as expected (1.7% y/y). Headline inflation was up by 1.9% y/y from 1.7% y/y prior month.
  • Harvey and Irma could fuel some disruption in prices (data collected and temporary pressures on specific items).
  • These data point towards some stabilization of inflation, notably for core prices after several month of negative surprises; this adds one argument in favour of progressive recovery in inflation next year to the debate among Fed governors on the inflation scenario.


France: CPI (Aug.): 0.6% m/m as expected (prior: -0.4%)

  • Inflation has been confirmed up by 0.6% m/m, driven up by firmer clothes and energy prices.
  • Inflation was up by 1% y/y after 0.8% y/y prior month.


UK: BoE has not changed its current strategy

  • Key rates remain at 0.25% and asset purchases target has not changed (GBP 435 bn for government bonds and GBP 10 bn for corporate bonds).
  • BoE has adopted a hawkish tone on key rates as inflation is on a rising trend and signs of a firmer wage growth have increased. Two bankers voted in favor of a rate hike (+25 bp) at this meeting.
  • Pressures have now turned upon the next November BoE's meeting.


Switzerland: SNB maintained key rates at -0.75%.

  • SNB has slightly changed its view on the Swiss franc, being now less overvalued, but the situation remains fragile and the Bank could continue to intervene in FX if necessary.
  • GDP growth for 2017 has been revised lower (1% from 1.5% y/y previously) and inflation slightly up (0.4% y/y in 2017 and 2018 from 0.3% y/y; 1.1%y/y in 2019 from previously 1% y/y).


Sweden: Unemployment rate (Aug.): 6.6% vs 6.8% expected (prior: 7.1%)

  • Unemployed has decreased over the month.


mercredi 13 septembre
US PPI on the soft side, UK unemployment rate continued to decline

US: PPI (Aug.): 0.2% m/m vs 0.3% expected (prior: -0.1%)

  • PPI y/y: 2.4% vs 2.5% expected (prior: 1.9%)
  • Core PPI: 0.1% m/m vs 0.2% expected; 2.4% y/y vs 2.5% expected (prior: 1.8%)
  • A 3.3% rise in energy prices was partially offset by a 1.3% decline in food prices. Core intermediate producer prices resumed their increase following declines in the previous two months.
  • Tomorrow's CPI report will be important to watch after a long series of downward surprises on the inflation front.


Eurozone: Industrial production (July): 0.1% m/m as expected (prior: -0.6%)

  • IP y/y: 3.2% vs 3.3% expected (prior: 2.8% revised from 2.6%)
  • This adds to evidence that industrial production will likely slow in Q3 after a very strong Q2 (+1.0% q/q).
  • However, the sector breakdown is encouraging as it shows that weak energy production was offset by capital goods, which came in on the strong side, rising by 0.8% m/m after last month's drop of -1.9% m/m.


UK: Unemployment rate (ILO) (July): 4.3% vs 4.4% expected (prior: 4.4%)

  • Jobless claims change (Aug.): -2.8k after -2.9k (revised from -4.2k)
  • The unemployment rate fell to a 42-year low while job creation reached a two year high in July, this time mostly on the self employed.

UK: Average earnings incl. Bonus (July): 2.1% y/y vs 2.3% expected (prior: 2.1%)

  • Despite employment continuing to surprise to the upside, wage growth disappointed once again in July.
  • This may be explained by efforts by companies to offset price inflation of raw materials and imports in general, but it means that real wage growth remains negative which should weigh on consumption.


Switzerland: PPI-import prices (Aug.): 0.3% m/m vs 0.2% expected (prior: 0.0%)

  • Y/y: 0.6% vs 0.4% expected (prior: -0.1%)
  • Slightly above expectations but still very soft on a y/y basis.



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