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Market insight 19.04.2018

Mixed Philly Fed business sentiment in the US; declining sales in UK

Mixed Philly Fed business sentiment in the US; declining sales in UK

US: Philadelphia Fed. (Apr.): 23.2 vs 21 expected (prior: 22.3)

  • Sentiment on current situation has slightly increased but the six-month view index has significantly declined from previous highs.
  • Positive view on current situation has been fueled by rising prices paid, employment and average workweek, while shipments and new orders were on the decline.
  • The decline on future view has been fueled by orders, employment and capital expenditure.
  • As the survey is very volatile, it is difficult to really conclude on the underlying trend except a return from previous high level.

 

US: Initial jobless claims (Apr. 14): 232k vs 230k expected (prior: 233k)

  • Continuing claims at 1863 k after 1878 k past week.

 

UK: Retail sales (March): -0.5% m/m vs -0.4% expected (prior: 0.4% revised from 0.6%)

  • Extraordinary bad weather conditions have weighted down on monthly sales, and the fall was broad-based across sectors.
  • Consumption has weakened in Q1; downside risks remain in place as the political situation has turned more fragile domestically.

 

Poland: Industrial production (March): 11.4% m/m vs 12.4% expected (prior: -2.2%)

  • Technical rebound after the fall past month; the yearly trend has moderated.

 

Poland: PPI (March): 0.4%m/m vs 0.1% expected (prior: -0.2% revised from -0.3%)

  • PPIs have rebounded from -0.1% y/y to 0.3% y/y.


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Market insight 25.04.2018

France: consumer confidence under stabilization

France: Consumer confidence (Apr.): 101 vs 100 expected (prior: 100)

  • Sentiment is less negative on personal situation and on standard of living; in details, prices, and unemployment to a lesser extent, were sources of rising concerns.
  • In absolute terms, the index remained well above the levels reached before the financial crisis, pointing towards good fundamentals for households. The index could stabilize around these current levels, which stayed below levels reached in Q4-17.

 

Spain: PPI (March): -0.9% m/m (prior: 0% revised from 0.1%)

  • Prices were up by 1.3% y/y after 1.2% y/y past month. Energy prices have fallen by 3% m/m.

 

Poland: Unemployment rate (March): 6.6% vs 6.5% expected (prior: 6.8%)

  • The decrease of unemployed has accelerated: -35 k after -7 k past month.

 

Brazil: Current account (March): 798 M$ vs -100 M$ expected (prior: 290 M$ revised from 283 M$)

  • Current account has jumped into a surplus for the second month; FDI has also jumped from USD 4.7 bn to USD 6.5 bn over the month.

 

Turkey: Central bank has increased liquidity lending rate from 12.75% to 13.50%.

  • Repo rate was unchanged at 8%, overnight lending rate unchanged at 9.25% and overnight borrowing rate unchanged at 7.25%.
  • In its statement, central bank mentioned that it wanted to implement some tightening in order to preserve price stability, as inflation and expectations have increased.
Market insight 24.04.2018

Richmond Fed manufacturing fell sharply in April, disappointing German IFO survey

US: Richmond Fed manufacturing (Apr): -3 vs 16 expected (prior: 15)

  • The index fell sharply in April for the second consecutive month.

  • The underlying composition was generally weak, with sharp declines in the shipments and new orders components.

US: Consumer confidence (CB) (Apr): 128.7 vs 126 expected (prior: 127 revised from 127.7)

  • The improvement in confidence was spread evenly across the present situation and expectations indices.

US: New home sales (Mar): 694k vs 630k expected (prior: 667k revised from 618k)

  • On a m/m basis: 4% vs 1.9% expected (prior: 3.6% revised from -0.6%)

  • By region, March sales increased in the West (+28.3%), South (+0.8%) but declined in the Northeast (-54.8%) and Midwest (-2.4%). Inventory available on the market edged down to 5.2 months of available supply, towards the lower end of its 12-month range.

US: Housing prices (FFHA) (Feb): 0.6% q/q as expected (prior: 0.9% revised from 0.8%)

Germany: IFO (Apr): 102.1 vs 102.8 expected (prior: 103.3 revised from 103.2)

  • Expectations: 98.7 vs 99.5 expected (prior: 100 revised from 103.2)

  • Current assessment: 105.7 vs 106 expected (prior: 106.6 revised from 106.5)

  • The headline decline was driven by a drop in expectations. From a sector perspective, sentiment in manufacturing eased further from high levels, while construction and retail sentiment improved slightly.

  • Note that there have been methodological changes to the survey this month, which in theory should make it a better guide to German GDP growth.

France: Business confidence (Apr): 108 as expected (prior: 109)

  • Manufacturing: 109 vs 110 expected (prior: 110 revised from 111)

Market insight 23.04.2018

Flash PMI manufacturing: higher in the US but lower in the eurozone; flash PMI services higher in the US and in the eurozone

US: Markit Manufacturing PMI (Apr.): 56.5 vs 55.2 expected (prior: 55.6)

  • Flash estimate of business sentiment in manufacturing has rebounded from past month thanks to new orders and production.
  • These data, if confirmed, will fuel the scenario of a rebound in activity in Q2.

 

US: Markit Services PMI (Apr.): 54.4 vs 54.1 expected (prior: 54)

  • A modest rebound in flash estimate for services: improving new orders, but lower employment.

 

US: Existing home sales (March): 5.6M vs 5.55M expected (prior: 5.54M)

  • A rebound in sales of condos, but a modest rise in single family house. Inventories were slightly on the rise.
  • Median and average prices of houses sold remained on a strong trend (respectively: 5.8% y/y; 4.1% y/y).
  • Trend in sales remain positive, but monthly data were highly volatile over the past four months.

 

Eurozone: PMI Manufacturing (Apr.): 56 vs 56.1 expected (prior: 56.6)

  • Flash estimate of business sentiment has eroded further from past month; the fall was limited in Germany (-0.1 point) but larger in France (-0.3 pt).
  • Business sentiment has probably weakened in peripherals leading to the monthly fall in total estimate.
  • Growth should stabilize at a slightly lower pace in Q1-Q2 compared to the highs seen in Q4.

 

Eurozone: PMI Services (Apr.): 55 vs 54.6 expected (prior: 54.9)

  • Flash estimate in services has slightly increased from past month; sentiment has increased more in France (+0.5 pt) than in Germany (+0.2 pt).

 

Poland: Retail sales (March): 17.8% m/m vs 16.6% expected (prior: -3%)

  • Trend in sales has accelerated from 7.9% y/y to 9.2% y/y (8.8% y/y in real terms).
  • The rebound was broad-based across sectors.

 

Switzerland: M3 (March): 3.3% y/y (prior: 3.7%)

  • Growth pace of monetary aggregates has slowed down from past month.

Further reading

Market insight 25.04.2018

France: consumer confidence under stabilization

France: Consumer confidence (Apr.): 101 vs 100 expected (prior: 100)

  • Sentiment is less negative on personal situation and on standard of living; in details, prices, and unemployment to a lesser extent, were sources of rising concerns.
  • In absolute terms, the index remained well above the levels reached before the financial crisis, pointing towards good fundamentals for households. The index could stabilize around these current levels, which stayed below levels reached in Q4-17.

 

Spain: PPI (March): -0.9% m/m (prior: 0% revised from 0.1%)

  • Prices were up by 1.3% y/y after 1.2% y/y past month. Energy prices have fallen by 3% m/m.

 

Poland: Unemployment rate (March): 6.6% vs 6.5% expected (prior: 6.8%)

  • The decrease of unemployed has accelerated: -35 k after -7 k past month.

 

Brazil: Current account (March): 798 M$ vs -100 M$ expected (prior: 290 M$ revised from 283 M$)

  • Current account has jumped into a surplus for the second month; FDI has also jumped from USD 4.7 bn to USD 6.5 bn over the month.

 

Turkey: Central bank has increased liquidity lending rate from 12.75% to 13.50%.

  • Repo rate was unchanged at 8%, overnight lending rate unchanged at 9.25% and overnight borrowing rate unchanged at 7.25%.
  • In its statement, central bank mentioned that it wanted to implement some tightening in order to preserve price stability, as inflation and expectations have increased.
Market insight 24.04.2018

Richmond Fed manufacturing fell sharply in April, disappointing German IFO survey

US: Richmond Fed manufacturing (Apr): -3 vs 16 expected (prior: 15)

  • The index fell sharply in April for the second consecutive month.

  • The underlying composition was generally weak, with sharp declines in the shipments and new orders components.

US: Consumer confidence (CB) (Apr): 128.7 vs 126 expected (prior: 127 revised from 127.7)

  • The improvement in confidence was spread evenly across the present situation and expectations indices.

US: New home sales (Mar): 694k vs 630k expected (prior: 667k revised from 618k)

  • On a m/m basis: 4% vs 1.9% expected (prior: 3.6% revised from -0.6%)

  • By region, March sales increased in the West (+28.3%), South (+0.8%) but declined in the Northeast (-54.8%) and Midwest (-2.4%). Inventory available on the market edged down to 5.2 months of available supply, towards the lower end of its 12-month range.

US: Housing prices (FFHA) (Feb): 0.6% q/q as expected (prior: 0.9% revised from 0.8%)

Germany: IFO (Apr): 102.1 vs 102.8 expected (prior: 103.3 revised from 103.2)

  • Expectations: 98.7 vs 99.5 expected (prior: 100 revised from 103.2)

  • Current assessment: 105.7 vs 106 expected (prior: 106.6 revised from 106.5)

  • The headline decline was driven by a drop in expectations. From a sector perspective, sentiment in manufacturing eased further from high levels, while construction and retail sentiment improved slightly.

  • Note that there have been methodological changes to the survey this month, which in theory should make it a better guide to German GDP growth.

France: Business confidence (Apr): 108 as expected (prior: 109)

  • Manufacturing: 109 vs 110 expected (prior: 110 revised from 111)

Market insight 23.04.2018

Flash PMI manufacturing: higher in the US but lower in the eurozone; flash PMI services higher in the US and in the eurozone

US: Markit Manufacturing PMI (Apr.): 56.5 vs 55.2 expected (prior: 55.6)

  • Flash estimate of business sentiment in manufacturing has rebounded from past month thanks to new orders and production.
  • These data, if confirmed, will fuel the scenario of a rebound in activity in Q2.

 

US: Markit Services PMI (Apr.): 54.4 vs 54.1 expected (prior: 54)

  • A modest rebound in flash estimate for services: improving new orders, but lower employment.

 

US: Existing home sales (March): 5.6M vs 5.55M expected (prior: 5.54M)

  • A rebound in sales of condos, but a modest rise in single family house. Inventories were slightly on the rise.
  • Median and average prices of houses sold remained on a strong trend (respectively: 5.8% y/y; 4.1% y/y).
  • Trend in sales remain positive, but monthly data were highly volatile over the past four months.

 

Eurozone: PMI Manufacturing (Apr.): 56 vs 56.1 expected (prior: 56.6)

  • Flash estimate of business sentiment has eroded further from past month; the fall was limited in Germany (-0.1 point) but larger in France (-0.3 pt).
  • Business sentiment has probably weakened in peripherals leading to the monthly fall in total estimate.
  • Growth should stabilize at a slightly lower pace in Q1-Q2 compared to the highs seen in Q4.

 

Eurozone: PMI Services (Apr.): 55 vs 54.6 expected (prior: 54.9)

  • Flash estimate in services has slightly increased from past month; sentiment has increased more in France (+0.5 pt) than in Germany (+0.2 pt).

 

Poland: Retail sales (March): 17.8% m/m vs 16.6% expected (prior: -3%)

  • Trend in sales has accelerated from 7.9% y/y to 9.2% y/y (8.8% y/y in real terms).
  • The rebound was broad-based across sectors.

 

Switzerland: M3 (March): 3.3% y/y (prior: 3.7%)

  • Growth pace of monetary aggregates has slowed down from past month.