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Daily Macroeconomic Digest

Thursday 23 May
Business sentiment (manufacturing and services) under pressure due to rising trade concerns

US: Initial jobless claims (May 18): 211k vs 215k expected (prior: 212k)

  • Continuing claims: 1676 k after 1664 k past week.


US: Markit Manufacturing PMI (May): 50.6 vs 52.6 expected (prior: 52.6)

  • A broad-based fall in sentiment: production, employment, orders and exports.

  • Rising uncertainties on trade are major concerns that have delayed demand and depressed order books; firms will delay capex decisions in this environment and capex/employment is at risk.


US: Markit Services PMI (May): 50.9 vs 53.5 expected (prior: 53)

  • Weakening confidence also in services and the index is back to its 2016 level.

  • Softening demand, increasing competition and moderate growth in activity and orders have weighed down on sentiment.


Eurozone: PMI Manufacturing (May): 47.7 vs 48.1 expected (prior: 47.9)

  • Business sentiment has marginally eased; first estimates remained quite stable at depressed level in Germany, while it has slightly rebounded in France.


Eurozone: PMI Services (May): 52.5 vs 53 expected (prior: 52.8)

  • Sentiment in services has decreased; first estimate has pointed towards falling sentiment in Germany, while it has strongly rebounded in France.

  • Composite index has slightly increased, but underlying trend remains fragile in Germany.


France: Business confidence (May): 106 vs 105 expected (prior: 106 revised from 106)

  • Sentiment has increased on personal production and views on new orders were less depressed than past month.

  • Separately, sentiment was stable in construction, volatile in trade and service sectors.

  • This is a slow but progressive recovery trend.


Germany: IFO (May): 97.9 vs 99.1 expected (prior: 99.2)

  • Sentiment has decreased further, due to lower opinions on the current situation while expectations remained stable (they are now slightly higher than in Jan.).

  • By sector, sentiment was weaker in trade and services, stable in manufacturing, and rising in construction from past month.


Germany: GDP (Q1-19): 0.4% q/q as expected (prior: 0%)

  • As expected, GDP growth has rebounded thanks to consumption and investment, while net exports were negative.

  • Risk on Q2 GDP are on the downside as sentiment remains low and still weakening in manufacturing and service sectors.


Sweden: Unemployment rate (Apr.): 5.9% vs 6.5% expected (prior: 6.7%)

  • Unemployed has sharply decreased over the month, and reached lowest level since 2008.


Norway: Unemployment rate (Apr.): 3.5% vs 3.7% expected (prior: 3.8%)

  • Unemployment ratio is back in the range seen in 2013-2014.


Brazil: Consumer confidence (May): 86.6 (prior: 89.5)

  • Both expectations and current sentiment have fallen over the month. The index looks in a decreasing trend since Jan.


Russia: PPI (Apr.): 0.5% m/m vs 1% expected (prior: 0.9%)

  • Mining and manufacturing prices were on a sustained rise over the month; PPIs were up by 10.7% y/y, after 10.9% y/y the prior month.


Turkey: Industrial confidence (May): 98.9 (prior: 105.5)

  • After an improvement past month, sentiment has turned back on orders, exports and production outlook.

Wednesday 22 May
UK: headline inflation back to 2% y/y

UK: CPI (Apr.): 0.6% m/m vs 0.7% expected (prior: 0.2%)

  • Inflation has increased, but slightly less than feared; the rebound was driven by housing, transport-energy and communication prices.

  • Headline inflation was up by 2.1% y/y after 1.9% y/y the prior month, while core inflation stayed stable at 1.8% y/y.


UK: PPI Input prices (Apr.): 1.1% m/m vs 1.3% expected (prior: -0.8% revised from -0.2%)

  • Commodity and material prices have driven inflation up; headline prices were up by 3.8% y/y after 3.2% y/y the prior month.


UK: PPI Output prices (Apr.): 0.3% m/m as expected (prior: 0.1% revised from 0.3%)

  • Oil prices were up by 1.3% m/m; yearly trend in prices has slightly moderated from 2.2% y/y the prior month to 2.1% y/y.

  • Inflation pressures remain in place, but are not sufficient to justify any move from the BoE before recovering more visibility from the Brexit issue.

Tuesday 21 May
US: falling existing home sales; less negative consumer confidence in the eurozone

US: Existing home sales (Apr.): 5.19M vs 5.35M expected (prior: 5.21M)

  • Sales of single family houses have decreased by 1% m/m, and inventories have increased over the month.

  • Price of single family houses have rebounded from past month, and up by 3.7% y/y (median prices).


Eurozone: Consumer confidence (May): -6.5 vs -7.7 expected (prior: -7.3 revised from -7.9)

  • On preliminary index, sentiment has recovered more than expected from depressed levels. No detail offered in the first estimate.


Switzerland: M3 (Apr.): 3.5% y/y vs 3.8% expected (prior: 3.6%)

  • No major change in trend in monetary aggregates; M1 at 5.1% y/y; M2 at 3.6% y/y.


Turkey: Consumer confidence (May): 55.3 (prior: 63.5)

  • Confidence has decreased with rising concerns, particularly on the economy and the unemployment.

Monday 20 May
German PPIs on the rise

Germany: PPI (Apr.): 0.5% m/m vs 0.3% expected (prior: -0.1%)

  • Energy and non-durable consumer goods were up by 1% m/m; core PPIswere up by 0.3% m/m.

  • Trend in PPI has slightly increased from 2.4% y/y to 2.5% y/y; core PPIs were up by 1.3% y/y after 1.2% y/y.

Friday 17 May
US consumer confidence has reached new highs

US: Consumer confidence (Michigan) (May): 102.4 vs 97.2 expected (prior: 97.2)

  • Sentiment has rebounded on both current situation and expectations. The improvement was driven by rising opinions on personal financial situation, sustained labour market and satisfaction on the government's action. Nevertheless, the willingness to buy large items was mixed across sectors (house, autos), pointing to some cautiousness on spending.

  • The inflation expectations have increased from 2.5% to 2.8% y/y at 1 year and from 2.3% y/y to 2.6% y/y at 5-10 year.

  • The confidence index has recovered and exceeds the highs seen in 2018.


Eurozone: CPI (Apr.): 0.7% m/m as expected (prior: 1%)

  • Final estimate has confirmed the monthly rise due to energy, clothes and transport sectors; core inflation has also rebounded by 0.9% m/m.

  • Trend in inflation has increased from1.4% y/y to 1.7% y/y and from 0.8% y/y to 1.3% y/y for core inflation.

  • Inflation is expected to moderate in the next months and to remain in a 1%-1.5% y/y range in future months.

Macro economic

The Chief Economist's weekly update

To help you navigate through the economic news, here is a summary of last week’s main events and what to look out for next week.
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