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Market insight 17.01.2020

US Housing starts back to 2007 levels

US Housing starts back to 2007 levels

US: Housing starts (Dec.): 1608k vs 1380k expected (prior: 1375k revised from 1365k)

  • Building permits: 1416 k after 1474 k past month (1460 k (expected).
  • Single and multi-family houses have finished the year at top levels (2007 levels for housing starts!).
  • Permits have moderated but remained at highest levels since 2008. Non-start permits and houses under construction remained high and suggested that trend in housing could stay sustained over the coming months, even if monthly data eased somewhat.

 

US: Industrial production (Dec.): -0.3% m/m vs -0.2% expected (prior: 0.8% revised from 1.1%)

  • Activity was mixed and globally weak across sectors; auto production fell back (-4.6% m/m) after prior month rebound (12.8% m/m) and production in utility sector has also decreased by 5.6% m/m. Production was more sustained in information, defense and construction sectors.
  • Production ex autos was up by 0.5% m/m, after 0.1% m/m the prior month.
  • Activity in manufacturing remained fragile, but sentiment has slightly improved in some districts and the signature of the trade agreement between US and China should bring orders and exports on a recovery.

 

US: Consumer confidence (Michigan) (Jan.): 99.1 vs 99.3 expected (prior: 99.3)

  • Sentiment has slightly eroded from the prior month, on lower expectations while sentiment on current conditions has increased further, reaching new high (same level as in Q1-18).
  • Inflation expectations have increased to 2.5% y/y for both 1y and 5-10y horizon (from 2.3% y/y and 2.2% y/y respectively).
  • Opinions have eroded on personal financial situation, but sentiment on economy has regained and trend in labour is expected to remain healthy.
  • Willingness to buy large items remained strong, notably for houses.

 

US: JOLTS Job Openings (Nov.): 6800 vs 7250 expected (prior: 7361 revised from 7267)

  • Following disappointing non-farm payrolls, jobs openings have decreased from high levels. The fall was broad-based across sectors, but more pronounced in the trade and transport sector.

 

Eurozone: CPI (Dec.): 0.3% m/m as expected (prior: -0.3%)

  • Inflation has recovered as expected due to food and energy prices.
  • As a result of higher energy, yearly trend in headline inflation has increased from 1% y/y the previous month to 1.3% y/y; core inflation stayed on a stable 1.3% y/y trend.

 

UK: Retail sales (Dec.): -0.6% m/m vs 0.6% expected (prior: -0.8% revised from -0.6%)

  • Sales were depressed in all sectors, except internet sales.
  • It seems that uncertainties around general election weighted down on consumers sentiment.
  • These weak data could argue one more in favour of a BoE's rate cut.

 

Switzerland: PPI-import prices (Dec.): 0.1% m/m (prior: -0.4%)

  • Producer prices were up by 0.1% m/m and import prices were up by 0.2% m/m; yearly trend has turned less negative, from -2.5% y/y the prior month to -1.7% y/y.

 


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Market insight 21.01.2020

German ZEW index pointing towards a rebound

Germany: Zew (Jan.): 26.7 vs 15 expected (prior: 10.7)

  • Expectations have strongly rebounded, reflecting the return to some visibility on trade after the US-China deal.
  • Expectations and sentiment on current situation have strongly improved from the prior month; expectations index has now turned back above the 2016-2017 levels.

 

UK: Unemployment rate (ILO) (Nov.): 3.8% as expected (prior: 3.8%)

  • Claimant rate: 3.5% after 3.4% the prior month; jobless claims stayed on a stable trend (14.9 k).
  • Labor remained on a healthy trend, and employment rises regularly.

 

UK: Average earnings incl. Bonus (Nov.): 3.2% y/y vs 3.1% expected (prior: 3.2%)

  • Trend in wages remained steady. Wages in finance and construction still offered the highest growth pace (respectively 4.2% y/y and 4.4% y/y).
  • Labor and wages should underpin future consumption after depressed sales data.

 

Switzerland: M3 (Dec.): 0.7% y/y (prior: 1.5%)

  • Monetary aggregates have shown slower growth over the month; M1 growth has slowed down to 0.6 % y/y, from 1.5% y/y the prior month.
Market insight 20.01.2020

Germany: less negative trend on PPI due to food and energy prices

Germany: PPI (Dec.): 0.1% m/m as expected (prior: 0%)

  • Prices of food and heating oil have rebounded over the month.
  • Yearly trend has turned less negative, from -0.7% y/y the prior month to -0.2% y/y.

 

Market insight 16.01.2020

US: sustained holiday season shopping and strong rebound in business Philly Fed

US: Philadelphia Fed. (Jan.): 17 vs 3.8 expected (prior: 2.4 revised from 03)

  • Sentiment has strongly rebounded, driven up by new orders, shipments, employment and prices (paid and received); views on future conditions have also sharply rebounded.

 

US: Retail sales (Dec.): 0.3% m/m as expected (prior: 0.3% revised from 0.2%)

  • While auto sales have fallen by 1.3% m/m, sales of clothes, sport, building materials and gasoline have strongly rebounded.
  • Core sales (sales ex-autos, gas, building materials) have rebounded by 0.5% m/m after -0.1% m/m (revised from previous 0% m/m past month).
  • Consumption was sustained on holiday season shopping, but it has moderated in Q4 after strong Q3-19. Trend should remain positive in 2020.

 

US: Initial jobless claims (Jna.11): 204k vs 218k expected (prior: 214k)

  • Continuing claims: 1767 k after 1804 k past week.

 

US: Business inventories (Nov.): -0.2% m/m as expected (prior: 0.1% revised from 0.2%)

  • Inventories have sharply decreased in all sectors, while sales were up by 0.7% m/m.
  • Inventories-to-sales ratios in retailers and wholesalers declined over the month.

 

US: NAHB housing market index (Jan.): 75 vs 74 expected (prior: 76)

  • Sentiment has slightly eroded from high level on present and future sales.

 

Germany: CPI (Dec.): 0.6% m/m as expected (prior: -0.8%)

  • Inflation has rebounded as expected, driven up by food and transport prices, while prices of clothes declined (-1% m/m).
  • Headline inflation was confirmed up by 1.5% y/y after 1.2% y/y the prior month.

 

Poland: Core inflation (Dec.): 0.6% m/m as expected (prior: 0%)

  • Core inflation has accelerated from 2.6% y/y the prior month to 3.1% y/y.

 

Turkey: Central bank cut key rates from12% to 11.25%.

  • The Bank was positive on economic outlook but noted that investment remained weak; inflation remained globally low and monetary policy should continue to support current recovery.

Further reading

Market insight 21.01.2020

German ZEW index pointing towards a rebound

Germany: Zew (Jan.): 26.7 vs 15 expected (prior: 10.7)

  • Expectations have strongly rebounded, reflecting the return to some visibility on trade after the US-China deal.
  • Expectations and sentiment on current situation have strongly improved from the prior month; expectations index has now turned back above the 2016-2017 levels.

 

UK: Unemployment rate (ILO) (Nov.): 3.8% as expected (prior: 3.8%)

  • Claimant rate: 3.5% after 3.4% the prior month; jobless claims stayed on a stable trend (14.9 k).
  • Labor remained on a healthy trend, and employment rises regularly.

 

UK: Average earnings incl. Bonus (Nov.): 3.2% y/y vs 3.1% expected (prior: 3.2%)

  • Trend in wages remained steady. Wages in finance and construction still offered the highest growth pace (respectively 4.2% y/y and 4.4% y/y).
  • Labor and wages should underpin future consumption after depressed sales data.

 

Switzerland: M3 (Dec.): 0.7% y/y (prior: 1.5%)

  • Monetary aggregates have shown slower growth over the month; M1 growth has slowed down to 0.6 % y/y, from 1.5% y/y the prior month.
Market insight 20.01.2020

Germany: less negative trend on PPI due to food and energy prices

Germany: PPI (Dec.): 0.1% m/m as expected (prior: 0%)

  • Prices of food and heating oil have rebounded over the month.
  • Yearly trend has turned less negative, from -0.7% y/y the prior month to -0.2% y/y.

 

Market insight 16.01.2020

US: sustained holiday season shopping and strong rebound in business Philly Fed

US: Philadelphia Fed. (Jan.): 17 vs 3.8 expected (prior: 2.4 revised from 03)

  • Sentiment has strongly rebounded, driven up by new orders, shipments, employment and prices (paid and received); views on future conditions have also sharply rebounded.

 

US: Retail sales (Dec.): 0.3% m/m as expected (prior: 0.3% revised from 0.2%)

  • While auto sales have fallen by 1.3% m/m, sales of clothes, sport, building materials and gasoline have strongly rebounded.
  • Core sales (sales ex-autos, gas, building materials) have rebounded by 0.5% m/m after -0.1% m/m (revised from previous 0% m/m past month).
  • Consumption was sustained on holiday season shopping, but it has moderated in Q4 after strong Q3-19. Trend should remain positive in 2020.

 

US: Initial jobless claims (Jna.11): 204k vs 218k expected (prior: 214k)

  • Continuing claims: 1767 k after 1804 k past week.

 

US: Business inventories (Nov.): -0.2% m/m as expected (prior: 0.1% revised from 0.2%)

  • Inventories have sharply decreased in all sectors, while sales were up by 0.7% m/m.
  • Inventories-to-sales ratios in retailers and wholesalers declined over the month.

 

US: NAHB housing market index (Jan.): 75 vs 74 expected (prior: 76)

  • Sentiment has slightly eroded from high level on present and future sales.

 

Germany: CPI (Dec.): 0.6% m/m as expected (prior: -0.8%)

  • Inflation has rebounded as expected, driven up by food and transport prices, while prices of clothes declined (-1% m/m).
  • Headline inflation was confirmed up by 1.5% y/y after 1.2% y/y the prior month.

 

Poland: Core inflation (Dec.): 0.6% m/m as expected (prior: 0%)

  • Core inflation has accelerated from 2.6% y/y the prior month to 3.1% y/y.

 

Turkey: Central bank cut key rates from12% to 11.25%.

  • The Bank was positive on economic outlook but noted that investment remained weak; inflation remained globally low and monetary policy should continue to support current recovery.