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Market insight 22.01.2019

US: depressed home sales; UK wages on a rising trend; less depressed sentiment in Germany

US: depressed home sales; UK wages on a rising trend; less depressed sentiment in Germany

US: Existing home sales (Dec.): 4.99M vs 5.24M expected (prior: 5.33M revised from 5.32M)

  • Sales have slowed down and just passed below 5 M, the first time since 2015. Sales of condos and single family houses plunged in Dec.
  • Average and median prices of houses sold remained at a high level. The number of days one house stays on market has recently significantly increased.
  • Sentiment has slightly improved for January, but real data have continued to disappoint.

 

UK: Unemployment rate (ILO) (Nov.): 4% vs 4.1% expected (prior: 4.1%)

  • Claimant count: stable at 2.8%; jobless claims: 20.8 k after 24.8 k the prior month.
  • A stable and still healthy labor.

 

UK: Average earnings incl. Bonus (Nov.): 3.4% y/y vs 3.3% expected (prior: 3.3%)

  • Trend in wages has continued to grow; services, finance and construction have shown the most sustained yearly trend in wages.
  • Despite the slowdown in inflation, this trend on wages could remain a concern for the BoE.

 

Germany: Zew (Jan.): -15 vs -18.5 expected (prior: -17.5)

  • Expectations have recovered for the second time, pointing towards potential stabilization after the fall in confidence and activity seen on Q4.
  • Nevertheless, sentiment on current situation remained weak

 

Poland: Retail sales (Dec.): 12.9% m/m vs 16.5% expected (prior: -2.7%)

  • After a fall past month, consumption rebounded on many sectors; on real terms, the yearly trend has moderated from 6.9% y/y to 3.9% y/y.


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Market insight 18.01.2019

US: firm industrial production but decreasing household confidence on government shutdown

US: Industrial production (Dec.): 0.3% m/m vs 0.2% expected (prior: 0.4% revised from 0.6%)

  • Production has increased further thanks to a rebound in auto, while activity has recessed in utility; production was also sustained in electronics, defense and for construction supply.

 

US: Consumer confidence (Michigan) (Jan.): 110 vs 116 expected (prior: 116.1)

  • According to preliminary data, sentiment has decreased on both current and mainly future situation.
  • Household’s worries concern future economic situation, while willingness to buy large items remained high despite a relative small decrease in Jan.
  • Government shutdown and turbulences in financial markets have negatively impacted household confidence.

 

Switzerland: PPI-import prices (Dec.): -0.6% m/m vs -0.1% expected (prior: -0.3%)

  • Import prices have declined by 1.6% m/m and production prices were just down by 0.1% m/m:
  • Yearly trend has moderated further from 1.4% y/y to 0.6% y/y for producer and import prices.

 

UK: Retail sales (Dec.): -0.9% m/m vs -0.8% expected (prior: 1.3% revised from 1.4%)

  • Sales ex fuel were down by 1.3% m/m vs -0.8% m/m expected (1% the prior month); trend in internet sales remained positive.
  • Downside risks are weighing on consumption as political scenario remains unclear.

 

Poland: Industrial production (Dec.): -11.5% m/m vs -9.6% expected (prior: -3.6%)

  • Industrial activity has turned highly volatile over past quarter; trend in production has slowed down from 4.7% y/y the prior month to 2.8% y/y.

 

Market insight 17.01.2019

US Philly Fed rebounded on January

US: Initial jobless claims (Jan.12): 213k vs 220k expected (prior: 216k)

  • Continuing claims: 1737 k after 1719 k past week.

 

US: Philadelphia Fed. (Jan.): 17 vs 9.5 expected (prior: 9.1 revised from 9.4)

  • A stronger than expected rebound, after downward revision to past month.
  • Current views and expectations have strongly rebounded from past month, recovering to levels seen in Q3-18.
  • The current views have improved thanks to a rebound in new orders and a fall in inventories. Number of employees has decreased as well as prices (both received and paid).
  • Expectations have rebounded thanks mainly to firmer shipments, higher employees and increasing workweek; new orders have moderated but remained at a high level.
  • This index has rebounded after a regular fall in H2-18: this argues in favour of a mini cycle, with hope of some rebound in the future.

 

UK: RICS house price balance (Dec.): -19% vs -13% expected (prior: -11%)

  • Opinions on house prices and sales have strongly deteriorated, and real sales stayed on a regular downward trend.

 

Eurozone: CPI (Dec.): 0% m/m as expected (prior: -0.2%)

  • Inflation has stabilized despite lower energy prices during the month under review; trend has moderated from 1.9% y/y past month to 1.6% y/y.
  • Core inflation was up by 0.5% m/m and then was stable at 1%; services were up by 0.9% m/m an up by 1.3% y/y.
Market insight 16.01.2019

US: a rebound in sentiment in housing; weakening inflation in many countries after decline in oil prices

US: Import price index (Dec.): -1% m/m vs -1.3% expected (prior: -1.9% revised from -1.6%)

  • Ex energy, prices were up by 0.3% m/m (-0.3% m/m the prior month); yearly trend has moderated from 0.5% y/y to -0.6% y/y.
  • Export prices were also down by 0.6% m/m, and have moderated from 1.8% y/y to 1.1% y/y.

 

US: NAHB housing market index (Jan.): 58 vs 56 expected (prior: 56)

  • Sentiment in housing has rebounded on higher present and future sales after interest rates have moderated.

 

UK: CPI (Dec.): 0.2% m/m as expected (prior: 0.2%)

  • Prices of food, transport and household goods have accelerated, while those of clothes decreased over the month.
  • Yearly trend has declined from 2.3% y/y past month to 2.1% y/y; core inflation has slightly increased from 1.8% y/y to 1.9% y/y.
  • Less pressure on BoE from inflation, but still concerns from tight labor and uncertain political environment.

 

UK: PPI Input prices (Dec.): -1% m/m vs -1.4% expected (prior: -2.6% revised from -2.3%)

  • Yearly trend has moderated further from 5.3% y/y to 3.7% y/y.
  • A large fall in energy prices and some contraction in chemical while other prices have slightly increased.

 

UK: PPI Output prices (Dec.): -0.3% m/m vs 0% expected (prior: 0.1% revised from 0.2%)

  • Core PPI were up by 0.2% m/m; yearly trend has moderated from 3% y/y to 2.5% y/y, while core prices have increased from 2.4% y/y to 2.5% y/y.

 

Germany: CPI (Dec.): 0.3% m/m as expected (prior: 0.1%)

  • Inflation has been confirmed lower due to declining oil prices and for clothes. Core inflation was up by 0.1%m/m after 0% m/m.
  • Trend has moderated from 2.3% y/y to 1.7% y/y. Core inflation was slightly down from 1.5% y/y to 1.4% y/y.

 

Italy: Industrial orders (Dec.): -2% m/m (prior: 1.8% revised from 2%)

  • While foreign orders stayed positive (+1.4% m/m), domestic orders have drastically fallen (-4.4% m/m), due to transport and pharma.
  • Industrial sales were up by 0.6% m/m (after 2% m/m prior month), driven by foreign sales.

Further reading

Market insight 21.01.2019

Lower energy prices have driven PPI on a slower trend in Germany

Switzerland: M3 (Dec.): 3.1% y/y vs 2.9% expected (prior: 2.8%)

  • M1 has further accelerated (5.5% y/y after 4.9%y/y the prior month); trend in M3 has slightly accelerated but time and savings deposits have continued to contract.

 

Germany: PPI (Dec.): -0.4% m/m vs -0.1% expected (prior: 0.1%)

  • PPIs have moderated from 3.3% y/y to 2.7% y/y. Oil and basic good prices were down over the month.
  • Core PPIs were flat over the month and stable on a yearly basis at 1.6% y/y.
Market insight 18.01.2019

US: firm industrial production but decreasing household confidence on government shutdown

US: Industrial production (Dec.): 0.3% m/m vs 0.2% expected (prior: 0.4% revised from 0.6%)

  • Production has increased further thanks to a rebound in auto, while activity has recessed in utility; production was also sustained in electronics, defense and for construction supply.

 

US: Consumer confidence (Michigan) (Jan.): 110 vs 116 expected (prior: 116.1)

  • According to preliminary data, sentiment has decreased on both current and mainly future situation.
  • Household’s worries concern future economic situation, while willingness to buy large items remained high despite a relative small decrease in Jan.
  • Government shutdown and turbulences in financial markets have negatively impacted household confidence.

 

Switzerland: PPI-import prices (Dec.): -0.6% m/m vs -0.1% expected (prior: -0.3%)

  • Import prices have declined by 1.6% m/m and production prices were just down by 0.1% m/m:
  • Yearly trend has moderated further from 1.4% y/y to 0.6% y/y for producer and import prices.

 

UK: Retail sales (Dec.): -0.9% m/m vs -0.8% expected (prior: 1.3% revised from 1.4%)

  • Sales ex fuel were down by 1.3% m/m vs -0.8% m/m expected (1% the prior month); trend in internet sales remained positive.
  • Downside risks are weighing on consumption as political scenario remains unclear.

 

Poland: Industrial production (Dec.): -11.5% m/m vs -9.6% expected (prior: -3.6%)

  • Industrial activity has turned highly volatile over past quarter; trend in production has slowed down from 4.7% y/y the prior month to 2.8% y/y.

 

Market insight 17.01.2019

US Philly Fed rebounded on January

US: Initial jobless claims (Jan.12): 213k vs 220k expected (prior: 216k)

  • Continuing claims: 1737 k after 1719 k past week.

 

US: Philadelphia Fed. (Jan.): 17 vs 9.5 expected (prior: 9.1 revised from 9.4)

  • A stronger than expected rebound, after downward revision to past month.
  • Current views and expectations have strongly rebounded from past month, recovering to levels seen in Q3-18.
  • The current views have improved thanks to a rebound in new orders and a fall in inventories. Number of employees has decreased as well as prices (both received and paid).
  • Expectations have rebounded thanks mainly to firmer shipments, higher employees and increasing workweek; new orders have moderated but remained at a high level.
  • This index has rebounded after a regular fall in H2-18: this argues in favour of a mini cycle, with hope of some rebound in the future.

 

UK: RICS house price balance (Dec.): -19% vs -13% expected (prior: -11%)

  • Opinions on house prices and sales have strongly deteriorated, and real sales stayed on a regular downward trend.

 

Eurozone: CPI (Dec.): 0% m/m as expected (prior: -0.2%)

  • Inflation has stabilized despite lower energy prices during the month under review; trend has moderated from 1.9% y/y past month to 1.6% y/y.
  • Core inflation was up by 0.5% m/m and then was stable at 1%; services were up by 0.9% m/m an up by 1.3% y/y.