Daily macro update
Wednesday, September 23
PMIs on the rise in US, Eurozone and UK, but prices on the rise too
US: Manufacturing PMI (Sept.): 57 vs 53.7 expected (prior: 53.9)
- Flash estimate has pointed to a strong rebound in business confidence. The monthly improvement was broad based across major components.
- Sentiment has rebounded on production, new orders, mainly driven by the domestic demand, while export orders have decreased. Employment has also regained.
- Costs have increased, but at a slower pace than in past quarter, but selling prices remained on the rise.
US: Services PMI (Sept.): 58.7 vs 55.8 expected (prior: 56.5)
- Flash estimate pointed to a surge in confidence in services and the index is back to the highest levels seen recently.
- Activity was firmer, with higher new orders, driven by domestic demand and also some improvement on the export side.
- Employment has also strongly increased, while costs remained on the rise.
- Selling prices have increased further rapidly but rising competition has limited the move.
Eurozone: Manufacturing PMI (Sept.): 52.7 vs 52.6 expected (prior: 52.7)
- Flash estimate for business confidence remained stable over the month.
- New orders have slightly increased from the prior month and activity was sustained and broad-based across countries. New export orders have improved.
- Employment remained stable while costs and prices have accelerated further.
- Confidence has slightly decreased for France (from 51.1 prior month to 50.3) and Germany (from 54.3 to 53.8).
Eurozone: Services PMI (Sept.): 53 vs 51.4 expected (prior: 51.6)
- Flash estimate for services has strongly rebounded over the month.
- New business has strongly regained from the prior month, and notably for France (at 50.8 from 47.1) and Germany (from 51.3 to 53.3).
- Activity was strong but exports remained weak. Employment has also increased over the month.
- Costs and prices have sharply increased over the month.
UK: Manufacturing PMI (Sept.): 52 vs 51.5 expected (prior: 51.7)
- Flash estimate on business confidence has shown further rebound in manufacturing. New business has increased from the prior month and production was firmer thanks to AI and defense sectors. Consumer demand remained weak.
- Employment was lower due to rising operating costs.
- Prices have increased further in parallel with higher costs.
UK: Services PMI (Sept.): 51.7 vs 52 expected (prior: 52.5)
- Flash estimate for services has decreased from the prior month; the loss of momentum has been confirmed by lower new orders (49.5 after 50.7).
- Domestic demand remained subdued, and geopolitics was a concern.
- Exports have decreased, driven by lower demand from EU.
- Employment was on a modest rise, but costs have increased further. Prices have accelerated in parallel with rising costs.
Poland: Unemployment rate (Aug.): 5.8% as expected (prior: 5.8%)
- Unemployed has slightly increased over the month, but the ratio remained stable.
Tuesday, September 22
US Richmond business confidence lower on current conditions
US: Richmond Fed manufacturing (Sept.): -2 vs 2 expected (prior: 4)
- Business sentiment has decreased over the month about current conditions.
- Opinions have declined on orders, shipments and current business; the 6-month index has increased further (index from 26 prior month to 33), on higher shipments and stable (at high level) new orders.
- Prices received and paid remained on the rise in the short run.
Poland: Retail sales (Aug.): -0.3% m/m vs 0.6% expected (prior: 2.2%)
- Sales have decreased in real terms, driven lower by falling sales of autos, and pharma products.
- On the opposite, sales were on the rise for fuels, clothes and household goods.
- Yearly trend remained sustained, up by 3.8% y/y (3.9% y/y prior month).
Turkey: Consumer confidence (Sept.): 91.9 (prior: 90.8)
- Consumer confidence has slightly gained over the month; opinions were better oriented on personal finances, global economy and unemployment.
- Views on future purchases have slightly improved over the month.
Monday, September 21
Swiss M3 monetary aggregate remained on moderate growth trend
Switzerland: M3 (Aug.): 3.5% y/y (prior: 3.4% revised from 3.3%)
- M1 growth has slowed down from 6.4% y/y the prior month to 6.3%, and M2 from 4.2% to 4.0% y/y.
- Sight deposits continued to increase while time deposits have declined further over the month.
Turkey: Industrial confidence (Sept.): 102.5 (prior: 102.4)
- Business confidence has slightly gained over the month.
- Opinions were more positive on orders, employment and global business; on the opposite, views on exports and capex have decreased from the prior month.
Friday, September 18
UK retail sales rebounded
US: Industrial production (Aug): 0.0% m/m vs 0.3% expected (prior: 0.2%)
- US industrial production was unchanged in August, as a 0.3% decline in manufacturing offset gains in mining activity and utilities.
- The manufacturing weakness was concentrated in durable goods, whose output fell 0.5% amid broad-based declines across categories. Nondurable-goods production was flat.
UK: Retail sales (Aug): 0.5% m/m vs -0.2% expected (prior: -0.5%)
- UK retail sales rebounded despite rising energy bills, as stronger spending on clothing, food and household goods more than offset a decline in fuel sales.
- So far, British consumers have continued to spend through the energy shock, buoyed by favorable weather, healthy savings buffers and government support. Household confidence also rose after Labor took office, according to a GFK survey conducted in August.
- That optimism may soon fade. The BoE has signaled that further interest-rate increases could be necessary, while Burnham’s new autumn budget is expected to be “challenging”.
Germany: PPI (Aug): 1.1% m/m vs 0.6% expected (prior: 1.1%)
- German producer-price inflation accelerated, driven mainly by rising energy prices.
Thursday, September 17
BoE on hold, as expected
US: Initial jobless claims (Sept. 12): 196k vs 207k expected (prior: 206k)
- Continuing claims: 1730 k after 1769 k prior week.
US: Housing starts (Aug.): 1275k vs 1320k expected (prior: 1309k revised from 1239k)
- Building permits have decreased from 1433 k the prior month to 1394 k.
- Housing starts have declined over the month for multi-family houses while data for single-family houses have rebounded.
- Building permits have decreased in the two sectors.
US: Philadelphia Fed. (Sept.): 37.8 vs 32.1 expected (prior: 47.4)
- Business confidence has decreased after a large rebound the prior month.
- Opinions have decreased on current conditions on new orders and employment while prices remained on a sharp rise.
- The 6-month index has also decreased over the month, driven lower by new orders and shipments; contrary to current conditions, prices and employment were positively oriented.
US: Pending home sales (Aug.): 0.3% m/m vs -0.1% expected (prior: -2.6% revised from -2.3%)
- Sales were modestly up but with a large contrast across districts: Northeast and Midwest districts have contracted further while South and West districts have rebounded over the month.
Switzerland: Trade balance (Aug.): 5.61 Bn CHF (prior: 8.09 Bn)
- Real exports were down by 8.6% m/m after 11.2% m/m the prior month; real imports were down by 3.1% m/m after -1.5% m/m the prior month.
Eurozone: CPI (Aug.): 0.4% m/m as expected (prior: 0.2%)
- Final data confirmed the monthly rebound in inflation.
- Energy prices were mainly responsible for this, being up by 2.9% m/m after 2.7% m/m prior month.
- Good prices were up by 0.6% m/m after -2.2% m/m prior month, while services remained flat.
- Core inflation was up by 0.2% m/m after being flat the prior month; once again, these data confirmed no passthrough from energy to other major sectors.
- Yearly trend has accelerated from 2.9% y/y prior month to 3.2 % y/y (3.3% in first estimate), and core inflation has slightly declined from 2.5% to 2.4% y/y.
UK: BoE maintained key rates at 3.75% as expected.
- The bank voted by majority of 6-3 in favor of stable rates. Nevertheless, risks on inflation have increased due to the crisis on the Middle East, rising commodity prices and already high inflation.
- As seen in other central banks comments, the BoE mentioned the longer the conflict lasts, the probability of higher passthrough from energy to domestic prices and wages increases. In parallel, activity was stronger than expected and labor remained in a soft spot.
- The bank mentioned it is ready to hike in the face of energy pressures and higher inflation, opening the door to a rate hike in next November or December meeting.
- The bank has reduced its QT program and changed the process in favor of a multi year mechanism.