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Market insight 15.06.2018

US: weakening consumer expectations and disappointing industrial production

US: weakening consumer expectations and disappointing industrial production

US: Empire manufacturing (Jun): 25 vs 18.8 expected (prior: 20.1)

  • In the underlying details, both new orders (21.3; prior: 16), and shipments (23.5; prior: 19.1) improved further in June. The ongoing strength in these components suggests the headline should continue along at a solid level into the third quarter.
     

US: Industrial production (May): -0.1% m/m vs 0.2% expected (prior: 0.9% revised from 0.7%)

  • Capacity utilization: 77.9% vs 78.1% expected (prior: 78.1% revised from 78%)
  • The weakness was concentrated in auto production, which collapsed 6.5% m/m. Adjusting for this, the report was not as bad as manufacturing excluding autos only fell 0.2% m/m, while utilities surged 1.1% m/m and mining ramped up 1.8% m/m.
     

US: Consumer confidence (Michigan) (Jun P): 99.3 vs 98.5 expected (prior: 98)

  • Current conditions: 117.9 (prior: 111.8)
  • Expectations: 87.4 (prior: 89.1)
  • Inflation expectations have marginally increased from past month (2.9% at 1-year; +0.1pp; 2.6% y/y on 5-10y horizon).
     

Eurozone: CPI (May F): 0.5% m/m as expected (prior: 0.5%)

  • On a y/y basis: 1.9% as expected (prior: 1.3%)
  • CPI core y/y: 1.1% as expected (prior: 0.8%)
  • The breakdown of the report was largely unchanged; at the headline level, energy inflation stood at 6.1% from 2.6%, while unprocessed food inflation increased to 2.4% from 1.5%.


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