Market insight

US: Initial jobless claims (July 4): 1314k vs 1375k expected (prior: 1413k revised from 1427k)

• The decline was stronger than expected but with sharp divergences across states.
• The number of persons receiving benefits through standard programs also fell by more than expected to 18.1 mn (vs 18.8 mn expected).
• This somewhat ease concerns of a renewed downturn in the labor market, but this may change if coronavirus cases continue to rise in several large states.

Germany: Trade Balance (May): 7.1bn EUR vs 7.0bn expected (prior: 3.6bn revised from 3.5bn)

• Exports: 9.0% m/m vs 14.0% expected (prior: -24.0%)
• Imports: 3.5% m/m vs 12.4% expected (prior: -16.6%)
• The rebound in exports was much shallower than expected, notably to the US.
• Relative to February, exports in May were still down by almost 27% and imports by more than 18%.

US: JOLTS Job Openings (May): 5397 vs 4500 expected (prior: 4996 revised from 5046)

• This positive outcome is consistent with the stronger than expected June jobs report.

Germany: Industrial production (May): 7.8% m/m vs 11.1% expected (prior: -17.5% revised from -17.9%)

• IP y/y: -19.3% vs -16.9% expected (prior: -25.0%)
• The rebound from April was significantly slower than expected, so that industrial output was still down about a fifth relative to the level seen in February.
• This may be partly explained by a slower or lagging recovery in the rest of the world.

France: Business sentiment (Bank of France) (June): 89 vs 90 expected (prior: 83)

• The headline index rose to its highest level since February, but the sentiment on orders declined from May.

Italy: Retail sales (May): 24.3% m/m vs 15.0% expected (prior: -10.7% revised from -10.5%)

• Y/y: -10.5% vs -17.0% expected (prior: -26.7%)
• Non-food retail sales surged by 66% m/m but were still down 20% y/y.

US: ISM Non manufacturing (Jun): 57.1 vs 50.2 expected (prior: 45.4)

• Sentiment jumped to a four-month high as lockdowns lift. The composition of the report was strong with significant improvement in the business activity (+25pt to 66, the second-highest in records dating back to 1997), new orders (19.7pt to 61.6), employment (+11.3pt to 43.1) and export orders (17.4pt to 58.9) to components.

US: Markit Services PMI (Jun F): 47.9 vs 46.9 expected (prior: 46.7)

Germany: Factory orders (May): 10.4% m/m vs 15.4% expected (prior: -26.2% revised from -25.8%)

• After downward revisions to weak past month data and a cumulative slump of more than 37% in the previous two months, orders rebounded in May, particularly domestic orders (+12.3% m/m), while foreign orders increased by only 8.8% m/m.
• Across major components of German manufacturing orders, capital goods showed the strongest increases (+20.3%), while consumer goods and intermediate goods increased by +4.7% and 0.4% m/m, respectively.
• However, the recovery remained well below expectations due to modest increase in orders from outside the Euro area (+2% m/m).

Eurozone: Retail sales (May): 17.8% m/m vs 15% expected (prior: -12.1% revised from -11.7%)

• A strong rebound in all sectors (particularly for clothes, IT goods and furniture) after sharp decline the previous month.

Eurozone: PMI Services (June): 48.3 vs 47.3 expected (prior: 30.5)

• Sentiment has significantly rebounded in all major countries from the prior month.
• Index was back above 50 in France and Spain from depressed levels; only PMI services in Italy was slightly below expectations, but the index has nevertheless rebounded from 28.9 to 46.4.
• Business sentiment has strongly regained in both manufacturing and service sectors, paving the way to rebuilding momentum in domestic activity in Q3.

UK: GFK consumer confidence (June): -27 vs -29 expected (prior: -30)

• Confidence has slightly regained from the prior month. Opinions on future economic situation remained depressed.
• The index remained close to the 2012 low levels.

UK: PMI Services (June): 47.1 vs 47 expected (prior: 29)

• With progressive reopening of the economy, sentiment has continued to regain, and the index was coming back closer to 50.

Turkey: CPI (June): 1.13% m/m vs 0.6% expected (prior: 1.36%)

• Despite falling prices in food, prices have accelerated significantly over the month on clothes, communication, transport and leisure. Core inflation was up by 2.1% m/m.
• Headline inflation has accelerated from 11.39% y//y the prior month to 12.62% y/y and core inflation from 10.32% y/y to 11.64% y/y.