Daily macro update

US: CPI (May): 0.1% m/m vs 0.2% expected (prior: 0.2%)

• Inflation was lower than expected on both headline (0.1% m/m after 0.2% m/m prior month) and for core inflation (0.1% m/m after 0.2% m/m).
• Declining energy prices, flat prices of goods and some disinflation in services have driven the good monthly results.
• In details, food prices were up by 0.3% m/m (-0.1% m/m prior month), energy down by 1% m/m (0.7% m/m prior month), good prices flat over the month (0.1% m/m prior month) and services up by 0.2% m/m (0.3% m/m prior month).
• In more details: energy prices have fallen thanks to oil prices while electricity and gas prices remained sustained over the month.
• Within food, eggs prices have declined for the second month (-2.7% m/m) but were still up by 41.5% y/y.
• Within goods, prices of cars have contracted further; this sector was exposed to some rise from tariffs, but probably large use of inventories have helped to contain or delay pressure on prices. On the opposite, some sectors, such as furniture, appliances, have shown accelerating monthly prices but total effects on good prices were diluted.
• Whitin services, shelter cost remained on a regular rise (0.3% m/m as seen the prior month), but prices have moderated in medical, transport, recreation and education sectors from the prior month.
• Yearly trend has increased from 2.3% y/y prior month to 2.4% y/y; core inflation remained stable at 2.8% y/y.
• Despite positive surprises on the monthly data, upside risks remain in place due to impact of first wave on tariffs over the next months. The Fed should remain cautious and wait for more data before re-entering any easing cycle.

US: NFIB Small Business optimism (May): 98.8 vs 96 expected (prior: 95.8)

• Business sentiment has regained over the month, but the index remained well below the peak reached in Dec. 2024.
• Opinions have regained about future economic situation but remained stable on prices, capex and weakened on compensation.

Italy: Industrial production (April): 1% m/m vs -0.1% expected (prior: 0% revised from 0.1%)

• Production has been boosted by a strong monthly rise of activity on consumer goods (both durables and non-durables) and a decent rise in capital goods.

Norway: CPI (May): 0.4% m/m as expected (prior: 0.7%)

• Inflation has declined for transport and household goods over the month (past Easter effects) but was up for food and clothes.
• Yearly trend has accelerated from 2.5% y/y prior month to 3.0% y/y; core inflation was up by 0.2% m/m (0.5% m/m prior month) and declined from 3.0% y/y prior month to 2.8% y/y.

Sweden: Retail sales (April): 0.5% m/m vs -0.4% expected (prior: -0.1%)

Sweden: Industrial production (April): 2.3% m/m (prior: -0.7% revised from -0.5%)

• Activity was more sustained over the month; industrial activity was up by 3.4% m/m (-1% m/m prior month) and service activity was up by 3.1% m/m (-1.7% m/m prior month).

Switzerland: Seco Consumer confidence (May): -36.5 vs -38 expected (prior: -42.4)

• Consumer sentiment was less negative than past month, but the index remained at low level. The monthly improvement was driven by less negative views on financial situation and willingness to buy items.

UK: Unemployment rate (ILO) (April): 4.6% as expected (prior: 4.5%)

• Over the past three months, unemployed has increased (from 1.54 M to 1.64 M) and payrolls have decreased (-109 k).
• Unemployed over 12- and 24-months period have increased over the month.
• Employment was up by 89 k after 112 k the previous period (average 3M); full-time employment has decreased, while part-time and temporary workers have increased over the period.
• Trend in labor is progressively weakening and trend in unemployment rising.

UK: Average earnings incl. Bonus (April): 5.3% y/y vs 5.5% expected (prior: 5.6% revised from 5.5%)

• Trend in wage growth has eased further over the month; the moderation was seen for both manufacturing and service sectors, but trend remained high in terms of absolute nominal growth.

Brazil: CPI (May): 0.26% m/m vs 0.32% expected (prior: 0.43%)

• Inflation has moderated on all sectors except housing over the month.
• Yearly trend has declined from 5.53% y/y the prior month to 5.32% y/y.

US: Non-farm payrolls (May): 139k vs 126k expected (prior: 147k revised from 177k)

• This again demonstrates the resilience of the US labour market. Despite downward revisions to payrolls growth totaling 95k over the previous two months, the three-month moving average remains solid at 135k.
• The job report shows solid gains at service providers, including health care, social assistance as well as leisure and hospitality.
• However, industries most impacted by tariffs may show some warning signs as manufacturing payrolls dropped by 8k.

US: Unemployment rate (May): 4.2% as expected (prior: 4.2%)

US: Average hourly earnings (May): 0.4% m/m vs 0.3% expected (prior: 0.2%)

• Y/y: 3.9% vs 3.7% expected (prior: 3.9% revised from 3.8%)
• Good news for consumption, but it could put some pressure on prices.

Eurozone: GDP (Q1 T.): 0.6% q/q vs 0.4% expected (prior: 0.3%)

• Eurozone Q1 GDP expanded twice as much as previously reported.
• This final release proves that the economy was resilient, but the growth rate is "boosted" by a surprising 9.7% GDP q/q increase in Ireland (not annualized) mainly because of a surge in exports to the US (front loading ahead of tariffs). This was also a feature in other countries so that exports alone added 0.9 pp to growth.
• Household consumption rose by a more modest 0.2% q/q while investments grew by a strong 1.8%.

Eurozone: Retail sales (April): 0.1% m/m vs 0.2% expected (prior: 0.4% revised from -0.1%)

• Y/y: 2.3% vs 1.5% expected (prior: 1.9% revised from 1.5%)

Germany: Industrial production (April): -1.4% m/m vs -1.0% expected (prior: 2.3% revised from 3.0%)

• IP y/y: -1.8% vs -1.0% expected (prior: -0.7% revised from -0.2%)
• This decline leaves the IP level in April around 1% annualized below the 1st quarter average.

Germany: Trade Balance (April): 14.6bn EUR vs 19.1bn expected (prior: 21.3bn revised from 21.1bn)

• Exports were down 1.7% while imports rose 3.9%.
• This raises the risk of a large net trade drag on GDP inQ2.

France: Industrial production (April): -1.4% m/m vs 0.0% expected (prior: 0.1% revised from 0.2%)

• IP y/y: -2.1% vs -0.3% expected (prior: -0.1%)
• Manufacturing production declined 0.6% after a 0.5% gain in March.

US: Initial jobless claims (May 31): 247k vs 235k expected (prior: 239k revised from 240k)

• Continuing claims: 1904 k after 1907 k previous week.

US: Nonfarm productivity (Q1-25): -1.5% q/q vs -0.8% expected (prior: 1.7%)

• As activity weakened while costs stayed on a rising trend, productivity has sharply declined over the quarter.
• Unit labor costs were up by 6.6%q after 3.8% in Q4.

US: Trade balance (April): -61.6 bn USD vs -66 bn expected (prior: -138.3 bn revised from -140.5 bn)

• Exports were up by 3% m/m after 0.9% m/m the prior month; exports of industrial goods were the most dynamic.
• Imports have decreased by 16.3% m/m (4.7% m/m prior month): all imports were down but autos and industrial good imports have declined the most over the month.

The ECB cut its key rates by 25 bp to 2% as expected.

• One governor has dissented in today meeting decision.
• The statement about the economy looks constructive, as support to domestic activity (infrastructure and defence) could balance uncertainties for trade. It has also noted that consumption should strengthen further on higher real incomes and solid labor.
• The ECB welcomed current inflation (1.9% y/y in May) is back to its medium-term target of 2%.
• The ECB has not made major revisions to its forecasts but focused on various growth and inflation scenarios according to developments in trade situation. Lagarde has focused on the prevailing risks related to trade uncertainties and possible different outcomes on growth and inflation resulting from trade issues (details not available yet).
• The ECB expects 2025 growth at 0.9%, 1.1% in 2026 and 1.3% in 2027, the latter year should benefit from the support to domestic activity launched this year.
• Inflation is expected to settle at 2% in 2025, 1.6% in 2026 (effect of lower energy prices and strong euro) and to regain to 2% in 2027. Core inflation is expected to average 2.4% in 2025, 1.9% in 2026 and 2027.
• The monetary policy remains data dependent; indirectly, the ECB refers to the current 2% on rates as an equilibrium level (a neutral position); next move around this level should come only if the global growth/inflation scenario moves from its current situation and projections.
• This means the ECB could stay for a while at this 2% level and could move sideways next meetings; the next move on rates should be under conditions that the outlook changes, which reduces probability of other large cuts and sounds like the end of the regular easing process.

Eurozone: PPI (April): -2.2% m/m vs -2.1% expected (prior: -1.7% revised from -1.6%)

• Prices have contracted due to another sharp fall in energy prices (-4.7% m/m after -5.8% m/m prior month).
• Yearly trend has declined from 1.9% y/y prior month to 0.7% y/y.

Germany: Factory orders (April): 0.6% m/m vs -1.5% expected (prior: 3.4% revised from 3.6%)

• Orders have increased further, thanks to a strong rise in domestic orders up by 2.2% m/m (due to orders in capital goods).
• Foreign orders have contracted by 0.3% m/m after a strong rebound the prior month.

Sweden: CPI (May): 0.1% m/m vs 0.3% expected (prior: 0.2%)

• Preliminary data have shown limited rise in prices; core inflation was up by 0.2% m/m after 0.5% m/m prior month.
• Yearly trend remained stable at 2.3%y/y, while core inflation declined from 3.1% y/y prior month to 2.5% y/y.

Switzerland: Unemployment rate (sa) (May): 2.9% vs 2.8% expected (prior: 2.8%)

• Unemployment has slightly increased in seasonally adjusted terms.