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Daily Macroeconomic Digest

Wednesday 08 April
Still sustained activity in Sweden pre-COVID impact

Sweden: Retail sales (Feb.): 0.4% m/m (prior: -0.3% revised from -0.2%)

  • Sales have rebounded over the month, but data are traditionally highly volatile.
  • Trend has remained sustained, up by 2.3% y/y, but some correction could be seen in the next release.


Norway: CPI (March): 0% m/m vs 0.1% expected (prior: -0.1%)

  • Core inflation was up by o.3% m/m due to stronger rises in clothes and household goods prices; on the opposite, prices for food, communication and leisure have declined over the month.
  • Headline inflation has eased from 0.9% y/y the prior month to 0.7%y/y, and core inflation from 2.5%y/y to 2.3%y/y.


Tuesday 07 April
Declining sentiment in US small and medium-sized firms

US: NFIB Small Business optimism (March): 96.4 (prior: 104.5)

  • Sentiment has declined mainly on future economy, sales and due to supply chain disruption. Prospects for capex has decreased, but compensation remained stable.
  • The total index has decreased but it remained above the 2012 period.


US: JOLTS Job Openings (Feb.): 6882 vs 6500 expected (prior: 7012 revised from 6963)

  • Job openings have declined from high level, but they were still sustained before the negative COVID impact on labor.
  • The most dynamic sectors were construction, manufacturing and retail trade in terms of job openings. These have been hit severely as seen in the latest non-farm payrolls.


Germany: Industrial production (Feb.): 0.3% m/m vs -0.8% expected (prior: 3.2% revised from 3%)

  • Production was more resilient than expected, but a sharp fall should occur in March data.
  • Manufacturing production was up by 0.4% m/m; despite a fall in capital goods, activity was firmer in energy and consumer good sectors.
  • Total production was down by 1.2% y/y after -0.9% y/y the prior month.


Switzerland: Unemployment rate (sa) (March): 2.8% vs 2.7% expected (prior: 2.6% revised from 2.3%)

  • Unemployed has increased by 17k over the month, and prior month data were revised up, reflecting first negative impacts on the economy.


Sweden: Industrial production (Feb.): -0.4% m/m (prior: 2.2%)

  • Activity has contracted over the month and yearly trend has turned negative (-0.2 % y/y after 0.3% y/ y the prior month).
  • Orders were up by 1.2 % m/m after 2.2% m/m the prior month.
  • Separately, activity in the service sector was also down by 0.4% m/m.


Brazil: Retail sales (Feb.): 1.2% m/m vs -0.4% expected (prior: -1.4% revised from -1%)

  • Sales were boosted by food, clothes and personal items; March data could reverse this improvement.


Monday 06 April
Germany factory orders to fall further in March

Germany: Factory orders (Feb.): -1.4% m/m vs -2.5% expected (prior: 5.5%)

  • Orders have fallen for capital goods (engineering and computers), while they remained in positive territory for consumer and intermediate goods. More negative news could come from March data.


UK: GFK consumer confidence (March): -34 (prior: -7)

  • An interim report (from 16 to 27 March) has shown a dramatic fall in confidence, driven by deteriorating sentiment on future economic situation and related personal financial situation.
  • The index is close to the lows seen in 2012, but still above the 2008 levels (-49), but expectations (economy in the next 12 months) are already below the two levels. Risks remained on the downside.


Russia: CPI (March): 0.6% m/m vs 0.7% expected (prior: 0.3%)

  • Inflation has accelerated driven up by a surge in food prices and a rebound in electric apparels prices. Core inflation was up by 0.5% m/m after 0.1% m/m the previous month.
  • Headline inflation has accelerated from 2.3% y/y the prior month to 2.5% y/y.
Friday 03 April
US labour under contraction; weakening business sentiment in services

US: Non-farm payrolls (March): -701k vs -132k expected (prior: 274k revised from 273k)

  • Labour has deteriorated more than expected from past month, and the unemployment ratio has increased from 3.5 % the previous month to 4.4%.
  • Payrolls destruction came close to the levels seen in 2008, down by 800 k.
  • Except the public sector, jobs have decreased in all sectors; the largest fall was seen in leisure-hotels, down by 459 k versus 44 k the prior month; other large reversal in jobs seen in construction, manufacturing, trade and retail, and business services.
  • Aggregated hours worked have decreased, but still moderately (-1.1% m/m).
  • Wage growth has slowed down for average weekly earnings (-0.2%m/m; 2.2% y/y), while hourly wages remained on a stable trend (3.1% y/y).
  • The survey has not yet accounted the most recent negative developments, meaning other negative data next month and probably a more significant rise in the unemployment ratio.


US: ISM Non manufacturing (March): 52.5 vs 43 expected (prior: 57.3)

  • The index was more resilient than expected, but details pointed towards deteriorating situation: falling sentiment on activity, new exports orders and employment (all below the 50 level), while total orders have less decreased; as seen in other indices, the rise in delivery has artificially boosted the index, but it pointed to disruption in the chain supply. The index may fall further next month.


US: Markit Services PMI (March): 39.8 vs 38.5 expected (prior: 49.9)

  • A sharp decrease from past month, due to falling activity, export orders, prices and employment.


Eurozone: PMI Services (March): 26.4 vs 28.2 expected (prior: 52.6)

  • Confidence has weakened more than expected at eurozone level and in all major countries; the sharpest fall was seen in Italy (from 52.1 to 17.4).
  • With COVID-19 developments and current lockdown, sentiment has fallen on activity, orders and on employment.
  • The index is now significantly lower than in 2008 (around 39) pointing towards sharper recession.


Eurozone: Retail sales (Feb.): 0.9% m/m vs 0.1% expected (prior: 0.7% revised from 0.6%)

  • Sales were stronger than expected ahead of the quarantine, boosted by food and pharma sales; on-line sales were also on strong pace over the month.


Spain: Industrial production (Feb.): 0% m/m (prior: 0% revised from 0.2%)

  • Production has sharply fallen in capital goods and energy, while it was moderately up in consumer and intermediate goods.
  • The yearly change stayed negative (-1.3% y/y). A sharp fall is expected in March.


UK: PMI Services (March): 34.5 vs 34.8 expected (prior: 53.2)

  • A larger fall than expected due to shut down and cancelled orders; sentiment has fallen on activity, orders and employment.
  • The index is well below its 2008 level (40), pointing to even sharper recession.


Russia: PMI Services (March): 37.1 vs 45.8 expected (prior: 52)

  • Large fall in sentiment as seen in other countries.


Brazil: PMI Services (March): 37.6 (prior: 50.9)

  • With business shutdown and cancelled orders, sentiment has fallen well below the 2008 low level.


Turkey: CPI (March): 0.57% m/m vs 0.5% expected (prior: 0.35%)

  • Prices have rebounded for food and health products and driven up the monthly rise despite falling energy and communication costs.
  • The yearly trend has moderated from 12.37 % y/y to 11.86 % y/y.
Thursday 02 April
US initial jobless claims surging again

US: Factory orders (Feb.): 0.0% m/m vs 0.2% expected (prior: -0.5%)

  • Factory orders were flat, slightly below expectations, with core capital goods orders revised a tad lower (from -0.8% to -0.9%) from the first estimate.


US: Initial jobless claims (March 28): 6648k vs 3763k expected (prior: 3307k revised from 3283k)

  • Initial jobless claims surged for the second consecutive week.
  • With more states issuing stay-at-home orders this week, initial jobless claims could continue to rise until mid-April.
  • The official employment report to be released tomorrow (March) will not include this recent surge in claims as it only includes the 12th of the month. It is only the April's report (to be released on May 8) that will show the unemployment rate strongly rising, and very probably exceeding 10%.


US: Trade balance (Feb.): -39.6 bn USD vs -40.0 bn expected (prior: -45.5 bn revised from -45.3 bn)

  • The trade deficit narrowed in February, in line with expectations.


Switzerland: CPI (March): 0.1% m/m as expected (prior: 0.1%)

  • CPI y/y: -0.5% as expected (prior: -0.1%)
  • Annual inflation fell to the lowest level since March 2016. Core inflation fell to -0.1% y/y - in negative territory for the first time since February 2017.


Macro economic

The Chief Economist's weekly update

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