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Daily Macroeconomic Digest

Thursday 26 November
France-Germany: falling consumer confidence

Eurozone: M3 (Oct.): 10.5% y/y vs 10.3% expected (prior: 10.4%)

  • M1 stayed on a stable and sustained growth trend (9.4% y/y); loans to private sector were up by 4.6% y/y after 4.7% y/y the prior month.
  • Loans to households stayed more dynamic for housing (4.5% y/y) than loans to consumption; loans to corporates were up by 6.8% after 7.1% y/y the prior month; as current lockdown is less severe than in Q2, demand for liquidities from corporates was lower.
  • Despite relative sustained growth pace in loans, transmission of monetary policy to final households and corporates is a concern for the ECB.


France: Consumer confidence (Nov.): 90 vs 92 expected (prior: 94)

  • Consumer confidence has sharply decreased, reaching a two-year low. Sentiment on past and current conditions declined over the month and expectations have fallen with virus contagion and renewed lockdown.
  • Views on personal finances, employment and activity have all decreased over the month.
  • The index has fallen below March levels and close to the 2018 lows during unrests and strikes.


Germany: GFK consumer confidence (Dec.): -6.7 vs -4.9 expected (prior: -3.2 revised from -3.1)

  • Consumer confidence has significantly fallen from the prior month according to first estimates; the index was back to April level.
  • The extension of the current lockdown for other 3 weeks should not restore weakening confidence.


Sweden: Consumer confidence (Nov.): 88.3 vs 88 expected (prior: 89.2 revised from 90)

  • Sentiment on personal and current situation has slightly improved from the prior month, but expectations have weakened on rising concerns on future economic situation and employment.
  • The index remained relatively high after lows seen in Q2.


Sweden: Manufacturing confidence (Nov.): 110.6 vs 106 expected (prior: 106.4 revised from 106.8)

  • Sentiment in manufacturing has increased further contrary to expectations; the index has reached its highest levels of 2020.
Wednesday 25 November
US: still positive data in manufacturing but weakening spending and consumer confidence

US: Initial jobless claims (Nov.21): 778k vs 730k expected (prior: 742k)

  • Momentum on labour has continued to deteriorate.
  • Continuing claims have decreased further from 6372 k the prior week to 6071 k as more people have joined public protection program.


US: Durable goods orders (Oct.): 1.3% m/m vs 0.8% expected (prior: 2.1% revised from 1.9%)

  • Orders remained positive, but on slower pace than the prior month; orders in defense sector were volatile past months, but on the rise over the prior month.
  • Orders were strong for electronics and metals; orders for capital goods non-defense ex aircraft were up by 0.7% m/m after 1.9% m/m; shipments were up by 1.3% m/m (2.3% m/m for core goods orders) and inventories stayed on stable pace (0.3% m/m).
  • Data in manufacturing remained on positive tone.


US: GDP (Q3-20): 33.1% q/q as expected (prior: -31.4%)

  • Just minor changes into sub sectors and their contribution to Q3 GDP second estimate.
  • Investment was a bit firmer thanks to housing and R&D; on the negative side, net exports have contributed more negatively while the positive support from change in inventories was slightly less positive.
  • Slower growth is expected in Q4, in a 1.5%-5% range.


US: Personal income (Oct.): -0.7% m/m vs -0.1% expected (prior: 0.9%)

  • The end of public support has driven disposable income down by 0.8% m/m. Wage was up by 0.7% m/m.


US: Personal spending (Oct.): 0.5% m/m vs 0.4% expected (prior: 1.4%)

  • Spending has slowed down close to expectations. A major reversal was seen in non-durable goods contracting after large rebound past month.
  • Saving ratio has continued to decrease from its past record peak in Q2 (more than 30%), at 13.6%, which remains high.


US: Core PCE (Oct.): 0% m/m as expected (prior: 0.2%)

  • Yearly trend eased from 1.6% y/y the prior month to 1.4% y/y.


US: Consumer confidence (Michigan) (Nov.): 76.9 vs 77 expected (prior: 81.8)

  • Sentiment has finally eased slightly more than initially estimated.
  • Opinions on current situation have increased from the prior month, but expectations have sharply decreased. The expectations index was back to its Q2 level.
  • Building worries on future financial situation, employment and slower future economic growth have driven expectations lower. Covid wave and uncertainty after US elections have weighed down on confidence.


US: New home sales (Oct.): 999k vs 975k expected (prior: 1002k revised from 959k)

  • Sales have marginally decreased after upside revisions to prior month data. Sales remained at historic highs.
  • Inventories remained at low level; prices have shown slower pace: 2.5% y/y after 5% y/y the prior month.


US: Wholesale inventories (Oct.): 0.9% m/m vs 0.4% expected (prior: 0.7% revised from 0.4%)

  • Inventories have increased further for non-durable goods and for autos.


Norway: Unemployment rate (Sept.): 5.2% vs 5.3% expected (prior: 5.3%)

  • Unemployment ratio remained at a high level after the rebound seen in Q2-20.


Brazil: Consumer confidence (Nov.): 81.7 (prior: 82.4)

  • Confidence has declined from past month, on both current situation and expectations.
  • The index remained at a high level after the rebound seen in Q3, but still below its pre-COVID level.


Tuesday 24 November
US consumer confidence has declined more than expected

US: Consumer confidence (CB) (Nov.): 96.1 vs 98 expected (prior: 101.4 revised from 100.9)

  • Sentiment has decreased more than expected from the prior month.
  • Sentiment on current conditions has decreased from 106.2 past month to 105.9; it remained at high level, notably on employment.
  • Expectations have dramatically fallen from 98.2 past month to 89.5, back to their previous lows seen during the year. This fall was mainly driven by rising worries on future economy and future employment.
  • It seems that rising virus contagion, renewed local restrictions, coupled with some political uncertainties after US elections, have weighed down on consumer confidence.


US: Richmond Fed manufacturing (Nov.): 15 vs 20 expected (prior: 29)

  • Views on current situation has decreased from the prior month, on lower production, orders, shipments and employment.
  • The 6-month view remained stable, notably on orders and capex.


US: House price Index MoM (FHFA) (Sept.): 1.7% m/m vs 0.8% expected (prior: 1.5%)

  • Prices remained on a rising trend; prices were up by 9.1% y/y.


US: S&P CoreLogic CS 20-City (Sept.): 6.57% y/y vs 5.3% expected (prior: 5.33% revised from 5.18%)

  • Prices stayed on a rising monthly trend (1.27% m/m after 1.35% m/m the prior month); yearly trend has accelerated further.


France: Business confidence (Nov.): 79 vs 84 expected (prior: 90)

  • Business sentiment has sharply declined, back to March level, due to the fall in retail and services.
  • Confidence in the manufacturing sector has marginally eased, from 94 to 92; while views on orders were marginally less negative, opinions have sharply declined on future production; the production largely contributed to past months recovery after the lockdown.


Germany: IFO (Nov.): 90.7 vs 90.2 expected (prior: 92.5 revised from 92.7)

  • Business sentiment has decreased from the prior month, but less than expected as seen in PMI data.
  • Sentiment on current situation stayed quite resilient (index at 90 from 90.4 the prior month), but expectations have declined more than expected, from 94.7 to 91.5, back to index level seen in Jan.
  • As seen in PMI, the fall in confidence seems limited, and more limited in Germany than in France.


Germany: GDP (Q3-20): 8.5% q/q vs 8.2% expected (prior: -9.8%)

  • Final data pointed towards stronger recovery than initially estimated.
  • Consumption was up by 10.8% q/q, investment up by 3.6% q/q and public consumption by 0.8% q/q; net exports were positive over the quarter (3.9 pp contribution).
  • With renewed lockdown, GDP should contract again in Q4-20.


Turkey: Industrial confidence (Nov.): 107.4 (prior: 109.7)

  • Views on current orders have slightly increased, but opinions on output, new orders and new exports have all decreased significantly from the prior month.
  • Despite current slowdown, the index remained at higher level than during the crisis.
Monday 23 November
Business sentiment: positive momentum in place in the US vs weakening sentiment in services in Europe

US: Markit Manufacturing PMI (Nov.): 56.7 vs 53 expected (prior: 53.4)

  • Contrary to expectations and to some regional surveys, momentum remained positive in manufacturing from the prior month.
  • The index has increased further to reach the highs seen in 2018.


US: Markit Services PMI (Nov.): 57.7 vs 55 expected (prior: 56.9)

  • Sentiment in services has also increased further from the prior month; despite some local restrictions at state level and slower high frequency indicators in services in big cities, sentiment remained on a positive momentum.
  • The service index has recovered to the highs seen in 2018.


UK: PMI Manufacturing (Nov.): 55.2 vs 50.5 expected (prior: 53.7)

  • Sentiment has increased further over the month, contrary to expectations.
  • Despite weakening sentiment on new orders, momentum remained positive in manufacturing industry, with prospects of a vaccine production.


UK: PMI Services (Nov.): 45.8 vs 43 expected (prior: 51.4)

  • With renewed lockdown, sentiment has sharply decreased in services from the prior month, as these sectors were the most hit by restrictions; nevertheless, the index remained above expectations and was back to June or Feb. levels.


Switzerland: M3 (Oct.): 5.6% y/y vs 4.1% expected (prior: 4.2%)

  • M1 and M3 have strongly accelerated over the month, due to expanding liquidities.


Eurozone: PMI Manufacturing (Nov.): 53.6 vs 53.2 expected (prior: 54.8)

  • Sentiment has declined from the prior month, but less than expected.
  • According to preliminary data, sentiment has sharply declined in France (index at 49.1), while it has only modestly decreased in Germany, remaining relatively high (57.9).


Eurozone: PMI Services (Nov.): 41.3 vs 42 expected (prior: 46.9)

  • With restrictions and new lockdown, sentiment has significantly decreased in services.
  • According to preliminary data, sentiment has plunged back to low levels in France (index at 38 from 46.5); index has also decreased in Germany, but at a lower extend (from 49.5 to 46.2).


Poland: Retail sales (Oct.): 2.3% m/m vs 2.9% expected (prior: -1.8%)

  • Highly volatile data; the rebound was mainly driven by household goods, food and pharma products.
  • The yearly trend was negative, down by 2.5% y/y.
Friday 20 November
Firmer than expected UK retail sales

UK: GFK consumer confidence (Nov.): -33 vs -34 expected (prior: -31)

  • Consumers remained worried about economic conditions and sentiment has deteriorated over the month on present and future personal financial conditions.
  • The index remained above the lows seen in March (index at -37)


UK: Retail sales (Oct.): 1.2% m/m vs -0.3% expected (prior: 1.4% revised from 1.5%)

  • Sales were better than expected, driven by household goods, sales in non-specialized stores and by internet sales.
  • Pre-Christmas sales and inventory building in a lockdown environment have boosted sales; consequently, sales in Nov. should significantly fall.


Eurozone: Consumer confidence (Nov.): -17.6 vs -18 expected (prior: -15.5)

  • Consumer confidence has decreased slightly less than expected from the prior month, according to preliminary estimates.
  • The index plunged at -22 in March and rebounded to -14 in Sept.; with renewed lockdown, the index was back in the middle of this range; if lockdown lasts longer than expected, confidence and activity should decline further.


Germany: PPI (Oct.): 0.1% m/m as expected (prior: 0.4%)

  • Prices of energy and basic goods were up by 0.1 %m/m, while those of non-durable consumer goods were down by 0.2% m/m.
  • Yearly trend was just less negative, from -1% y/y the prior month to -0.7% y/y.


Italy: Industrial orders (Sept.): 3.2% m/m (prior: 5.8% revised from 6.1%)

  • Industrial sales were down by 3.2% m/m after 5.6% m/m the prior month.
  • Foreign orders were flat over the month, only domestic orders were up by 5% m/m.


Poland: Industrial production (Oct.): 3.2% m/m vs 2.5% expected (prior: 15.5%)

  • The pace of activity has globally slowed down over the month; activity remained sustained in mining and utility sectors, while it looked on moderate pace in manufacturing (up by 2.3% m/m after 17% m/m the prior month).


Turkey: Consumer confidence (Nov.): 80.1 (prior: 81.9)

  • Confidence has decreased over the month; the fall was broad-based on sub-components but driven by lower expectations on future economic activity.
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Insight 24.11.2020

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