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Market insight 20.05.2019

German PPIs on the rise

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.


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Market insight 23.05.2019

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.

Market insight 22.05.2019

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.

Market insight 21.05.2019

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.

Further reading

Market insight 24.05.2019

Weak US durable goods orders as expected

US: Durable goods orders (Apr.): -2.1% m/m vs -2% expected (prior: 1.7% revised from 2.6%)

  • Orders have fallen due to aircraft (Boeing), but picture remained weak except in defense. Total shipments were down by 1.6% m/m (from -0.5% m/m past month) and inventories up by 0.4% m/m (flat the prior month).

  • Orders for capital goods non-defense ex aircraft: -0.9% m/m after 0.3% m/m; shipments were flat as well as inventories. After a modest improvement in Q1, the proxy for capex has slightly deteriorated, reflecting rising uncertainties on orders and demand.

 

UK: Retail sales (Apr.): 0% m/m vs -0.3% expected (prior: 1.2% revised from 1.1%)

  • Despite strong sales in clothes, total sales were flat and even negative for ex-auto fuel sales (-0.2%m/m).

  • Yearly trend remains positive in volume terms, but uncertainty is weighing after relatively resilient consumption in Q1.

 

Russia: Retail sales (Apr.): 1.2% y/y vs 1.4% expected (prior: 1.6%)

  • Non-food sales appeared to be on a slightly more resilient trend:1.8% y/y after 1.9% past month.

 

Russia: Real wages (Apr.): 1.6% y/y vs 0.2% expected (prior: 2.3% revised from 0%)

 

Russia: Unemployment rate (Apr.): 4.7% as expected (prior: 4.7%)

  • Unemployed has slightly increased after a regular decline in Q1.

Market insight 23.05.2019

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.

Market insight 22.05.2019

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.