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Daily Macroeconomic Digest

Friday 17 January
US Housing starts back to 2007 levels

US: Housing starts (Dec.): 1608k vs 1380k expected (prior: 1375k revised from 1365k)

  • Building permits: 1416 k after 1474 k past month (1460 k (expected).
  • Single and multi-family houses have finished the year at top levels (2007 levels for housing starts!).
  • Permits have moderated but remained at highest levels since 2008. Non-start permits and houses under construction remained high and suggested that trend in housing could stay sustained over the coming months, even if monthly data eased somewhat.


US: Industrial production (Dec.): -0.3% m/m vs -0.2% expected (prior: 0.8% revised from 1.1%)

  • Activity was mixed and globally weak across sectors; auto production fell back (-4.6% m/m) after prior month rebound (12.8% m/m) and production in utility sector has also decreased by 5.6% m/m. Production was more sustained in information, defense and construction sectors.
  • Production ex autos was up by 0.5% m/m, after 0.1% m/m the prior month.
  • Activity in manufacturing remained fragile, but sentiment has slightly improved in some districts and the signature of the trade agreement between US and China should bring orders and exports on a recovery.


US: Consumer confidence (Michigan) (Jan.): 99.1 vs 99.3 expected (prior: 99.3)

  • Sentiment has slightly eroded from the prior month, on lower expectations while sentiment on current conditions has increased further, reaching new high (same level as in Q1-18).
  • Inflation expectations have increased to 2.5% y/y for both 1y and 5-10y horizon (from 2.3% y/y and 2.2% y/y respectively).
  • Opinions have eroded on personal financial situation, but sentiment on economy has regained and trend in labour is expected to remain healthy.
  • Willingness to buy large items remained strong, notably for houses.


US: JOLTS Job Openings (Nov.): 6800 vs 7250 expected (prior: 7361 revised from 7267)

  • Following disappointing non-farm payrolls, jobs openings have decreased from high levels. The fall was broad-based across sectors, but more pronounced in the trade and transport sector.


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

  • Inflation has recovered as expected due to food and energy prices.
  • As a result of higher energy, yearly trend in headline inflation has increased from 1% y/y the previous month to 1.3% y/y; core inflation stayed on a stable 1.3% y/y trend.


UK: Retail sales (Dec.): -0.6% m/m vs 0.6% expected (prior: -0.8% revised from -0.6%)

  • Sales were depressed in all sectors, except internet sales.
  • It seems that uncertainties around general election weighted down on consumers sentiment.
  • These weak data could argue one more in favour of a BoE's rate cut.


Switzerland: PPI-import prices (Dec.): 0.1% m/m (prior: -0.4%)

  • Producer prices were up by 0.1% m/m and import prices were up by 0.2% m/m; yearly trend has turned less negative, from -2.5% y/y the prior month to -1.7% y/y.


Thursday 16 January
US: sustained holiday season shopping and strong rebound in business Philly Fed

US: Philadelphia Fed. (Jan.): 17 vs 3.8 expected (prior: 2.4 revised from 03)

  • Sentiment has strongly rebounded, driven up by new orders, shipments, employment and prices (paid and received); views on future conditions have also sharply rebounded.


US: Retail sales (Dec.): 0.3% m/m as expected (prior: 0.3% revised from 0.2%)

  • While auto sales have fallen by 1.3% m/m, sales of clothes, sport, building materials and gasoline have strongly rebounded.
  • Core sales (sales ex-autos, gas, building materials) have rebounded by 0.5% m/m after -0.1% m/m (revised from previous 0% m/m past month).
  • Consumption was sustained on holiday season shopping, but it has moderated in Q4 after strong Q3-19. Trend should remain positive in 2020.


US: Initial jobless claims (Jna.11): 204k vs 218k expected (prior: 214k)

  • Continuing claims: 1767 k after 1804 k past week.


US: Business inventories (Nov.): -0.2% m/m as expected (prior: 0.1% revised from 0.2%)

  • Inventories have sharply decreased in all sectors, while sales were up by 0.7% m/m.
  • Inventories-to-sales ratios in retailers and wholesalers declined over the month.


US: NAHB housing market index (Jan.): 75 vs 74 expected (prior: 76)

  • Sentiment has slightly eroded from high level on present and future sales.


Germany: CPI (Dec.): 0.6% m/m as expected (prior: -0.8%)

  • Inflation has rebounded as expected, driven up by food and transport prices, while prices of clothes declined (-1% m/m).
  • Headline inflation was confirmed up by 1.5% y/y after 1.2% y/y the prior month.


Poland: Core inflation (Dec.): 0.6% m/m as expected (prior: 0%)

  • Core inflation has accelerated from 2.6% y/y the prior month to 3.1% y/y.


Turkey: Central bank cut key rates from12% to 11.25%.

  • The Bank was positive on economic outlook but noted that investment remained weak; inflation remained globally low and monetary policy should continue to support current recovery.
Wednesday 15 January
Improving US New York business sentiment; moderate UK inflation; weak German growth in 2019

US: Empire manufacturing (Jan.): 4.8 vs 3.6 expected (prior: 3.3 revised from 3.5)

  • Sentiment has recovered, but details offered mixed picture: new orders and price environment have improved significantly, but short-term views on employment and shipments have slightly decreased.
  • The 6-month view has slightly moderated, notably for capex - but the index remained high; future new orders and shipments have recovered.
  • Globally, the index confirmed a bottoming out process in activity in the region.


UK: CPI (Dec.): 0% m/m vs 0.2% expected (prior: 0.2%)

  • Mixed picture at sector level: prices declined for clothes and leisure, while they sharply rebounded for household goods, transport and communication. Core inflation was flat over the month.
  • Yearly trend eased from 1.5% y/y to 1.3% y/y for headline inflation and from 1.7% y/y to 1.4% y/y for core inflation.
  • Given weak economic data and below-target inflation, the case for a rate cut at BoE's next meeting should increase further.


UK: PPI Input prices (Dec.): 0.1% m/m vs 0.2% expected (prior: 0.5% revised from -0.3%)

  • The monthly rise was mainly driven by energy prices, while prices of industrial goods, particularly chemical products, have contracted further.
  • Yearly trend has turned less negative from -1.9% y/y (upward revision) to -0.1% y/y.


UK: PPI Output prices (Dec.): 0% m/m vs 0.1% expected (prior: -0.2%)

  • Food prices were up, while manufactured good prices were mildly down on a monthly basis.
  • Yearly trend has slightly accelerated from 0.5% y/y the prior month to 0.9% y/y.


Sweden: CPI (Dec.): 0.4% m/m as expected (prior: 0.1%)

  • Prices were driven up by transport costs; core inflation was up by 0.5% m/m.
  • Headline and core inflation stayed on a quite stable trend (1.7% y/y).


Eurozone: Industrial production (Nov.): 0.2% m/m vs 0.3% expected (prior: -0.9% revised from -0.5%)

  • The picture was mixed by sector: activity has rebounded for energy and capital goods, while it has declined in intermediate and capital goods after a rebound the prior month.
  • Yearly trend in production was less negative: from -2.6% y/y the prior month to -1.5% y/y.


France: CPI (Dec.): 0.5% m/m as expected (prior: 0.1%)

  • Final inflation was confirmed up over the month, due to strong rebound in fresh food and oil prices.
  • Inflation has accelerated from 1.2% y/y the prior month to 1.6% y/y.


Germany: GDP YoY (2019): 0.6% y/y as expected (prior: 1.5%)

  • Yearly data confirmed moderate growth; public and private consumption and construction have underpinned growth, while investment and net trade were globally a drag on growth. GDP performance remained slightly positive, while industrial activity was in a contraction last year.
  • With yearly data published, Q4 GDP is estimated to probably having increased by 0.1%/0.2% q/q (to be confirmed in coming days).


Spain: CPI (Dec.): -0.1% m/m as expected (prior: 0%)

  • Inflation has been confirmed lower over the month, due to declining prices on clothes, food and housing; yearly trend has increased from 0.5% y/y to 0.8% y/y on headline inflation.


Poland: CPI (Dec.): 0.8% m/m as expected (prior: 0.1%)

  • Inflation rebound has been confirmed for Dec., due to rising transport and energy prices.
  • Yearly trend has accelerated from 2.6% y/y the prior month to 3.4% y/y.


Brazil: Retail sales (Nov.): 0.6% m/m vs 1.2% expected (prior: 0.1%)

  • Broad sales (including autos and construction materials) were down by 0.5% m/m.
  • Otherwise, sales of pharma, communication and personal household goods were solid. Yearly trend on sales remained solid, up by 2.9% y/y.
Tuesday 14 January
US: inflation on moderate monthly path; weakening sentiment among small-sized firms

US: CPI (Dec.): 0.2% m/m vs 0.3% expected (prior: 0.3%)

  • Food, energy and transport prices were on the rise over the month, while prices of computers sharply decreased, and services remained on moderate trend (0.2% m/m); core inflation was up by 0.1% m/m.
  • Headline inflation has slightly accelerated on a yearly basis from 2.1% y/y the prior month to 2.3% y/y; core inflation stayed stable at 2.3% y/y.
  • Inflation is expected to continue to evolve close to current level next month, but to slightly moderate thereafter, leaving Fed's debate on still low inflation (PCE index and core PCE index) versus target.


US: NFIB Small Business optimism (Dec.): 102.7 vs 104.6 expected (prior: 104.7)

  • Sentiment has finished the year at a moderate level, and it was volatile during the year.
  • Details are mixed but quite constructive: views on future economy and sales have increased, as well as selling prices; plan on capex has moderated but remained at quite high level, and the same pattern for "good time to expand".
  • Moderation came from labor (hiring plan, increasing compensation) after past month strong rebound.
  • Sentiment has bottomed out, but the index still shows some fragility in this transition period towards an expected firmer activity.


Turkey: Industrial production (Nov.): 0.7% m/m vs 1% expected (prior: -0.9%)

  • Rebound was led by capital and intermediary goods production over the month.
  • Trend in production has accelerated further from 3.9% y/y the prior month to 5.1% y/y.
Monday 13 January
UK: weak activity in industry past Nov.

UK: Industrial production (Nov.): -1.2% m/m vs 0% expected (prior: 0.4% revised from 0.1%)

  • Except energy (mining and oil), production has fallen in all other sectors; production in manufacturing decreased by 1.7% m/m; the fall is more pronounced in durable consumer goods and for capital goods.
  • Activity was very weak before the elections; now the visibility on Brexit has returned, and an improving momentum on activity is expected in the next months.
  • Separately, index of services (Nov.) was also negative (-0.3% m/m vs 0% expected), and the monthly GDP proxy (Nov.) has also decreased by 0.3% m/m.


Germany: Wholesale price (Dec.): 0% m/m (prior: -0.1%)

  • Prices were on a less negative trend: -1.3% y/y after -2.5% y/y the prior month.


Turkey: Current account (Nov.): -0.52bn USD vs -0.4bn expected (prior: 1.56bn revised from 1.55bn)

  • Balance of goods and financial accounts have turned more negative, leading to renewed deficit in current account.


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