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Market insight 21.02.2018

Flash PMI: increasing in the US, while weakening in the Eurozone

Flash PMI: increasing in the US, while weakening in the Eurozone

US: Markit Manufacturing PMI (Feb.): 55.9 vs 55.5 expected (prior: 55.5)

  • In this flash estimate, sentiment on new orders and employment has increased further over the month.
  • More supportive fiscal policy and weak USD have underpinned the improvement in business sentiment.

 

US: Markit Services PMI (Feb.): 55.9 vs 53.7 expected (prior: 53.3)

  • In this flash estimate, higher sentiment on new orders and prices has driven the increase.

 

US: Existing home sales (Jan.): 5.38M vs 5.6M expected (prior: 5.56M revised from 5.57M)

  • Sales of single family houses have decreased (from 4.9 M to 4.76 M); prices have moderated from past month sales, but remain in a positive trend (5.8% y/y for median; 4.7% y/y for average).
  • Share of investors is on a rising trend, while the share of first time buyers is eroding.

 

Eurozone: PMI Manufacturing (Feb.): 58.5 vs 59.2 expected (prior: 59.6)

  • Flash index points towards lower sentiment in industry, but the index remains at a high level.
  • Sentiment has weakened more in France than in Germany, in which the index remained very high (60.3 after 61.1). It is possible to see eroding sentiment in peripherals after good results past months.
  • EUR strength and turmoil in markets may have weighed down on confidence, but as expansion looks now pretty strong some stabilization in these leading indicators was already expected.

 

Eurozone: PMI Services (Feb.): 56.7 vs 57.6 expected (prior: 58)

  • Flash estimate has weakened more in services than in manufacturing; Index has declined in France and in Germany.
  • Despite decline in both monthly manufacturing and services indices, flash estimates remain in line with a 0.5%-0.6% q/q GDP growth in the eurozone.

 

Switzerland: M3 (Jan.): 4.1% y/y (prior: 3.6% revised from 3.2%)

  • Growth in monetary aggregates has slightly accelerated at the beginning of the month.

 

UK: Unemployment rate (ILO) (Jan.): 4.4% vs 4.3% expected (prior: 4.3%)

  • Claimant count: 2.3% after 2.4%; jobless claims: -7.2 k after 6.2 k
  • Unemployed has increased over the quarter under review, reversing trend in place previously.

 

UK: Average earnings incl. Bonus (Dec.): 2.5% y/y as expected (prior: 2.5%)

  • Trend in wages was stable; wage growth in the manufacturing sector has increased from 2.7% y/y in Nov. to 2.9% y/y in Dec.


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Market insight 23.02.2018

Euro area inflation confirmed the preliminary estimate, German Q4 GDP was in line

Eurozone: CPI (Jan F): 1.3% m/m as expected (prior: 1.3%)

  • On a m/m basis: -0.9% as expected (prior: 0.4%)
  • CPI core y/y: 1% as expected (prior: 1%)
  • Services inflation, which provides the best read in the initial report on domestically generated price increases, was unchanged from the initial report as well as from the December reading of 1.2%.

 

Germany: GDP (Q4 F): 0.6% q/q as expected (prior: 0.6%)

  • On a y/y basis: 2.3% as expected (prior: 2.3%)
  • Growth momentum in Q4 was mainly supported by foreign trade. Exports grew substantially by 2.7% q/q, while imports were also up by 2% q/q.
  • In terms of the domestic components, public consumption remained resilient in H2 17, Q3 growth has been revised up to 0.5% q/q (+0.5 ppt), in line with Q4 17 print (0.5% q/q).
  • On the investment side, gross fixed capital investment remained flat, with construction declining slightly.

 

Poland: Unemployment rate (Jan): 6.9% as expected (prior: 6.6%)

Market insight 22.02.2018

Business confidence slightly lower in France and Germany

US: Initial jobless claims (Feb. 17): 222k vs 230k expected (prior: 229k revised from 230k)

  • Initial jobless claims continue to flirt with multi-decade lows.

 

Germany: IFO (Feb.): 115.4 vs 117.0 expected (prior: 117.6)

  • Expectations: 105.4 vs 107.9 expected (prior: 108.3)
  • Current assessment: 126.3 vs 127.0 expected (prior: 127.8)
  • Despite falling below the 12-month average (115.7), the headline index remains elevated from a historical perspective.
  • This adds to evidence that GDP growth is probably nearing its peak, but also that the economic momentum should remain strong.

 

France: Business confidence (Feb.): 109 vs 110 expected (prior: 111 revised from 110)

  • Slightly down for the second consecutive month.
  • Like yesterday's PMIs, both the manufacturing and services sector indices edged lower but nonetheless remain at very healthy levels.

 

UK: GDP (Q4 Prel.): 0.4% q/q vs 0.5% expected (prior: 0.5%)

  • GDP y/y: 1.4% vs 1.5% expected (prior: 1.8%)
  • Q4 GDP was revised a tad lower to 0.4% q/q from 0.5% q/q.
  • The expenditure breakdown shows resilient consumption at 0.3% q/q (after 0.4% in Q3) while business investment continued to slow (from 0.5% q/q to flat in Q4). This suggests that corporates are holding back investment in the face of high levels of uncertainty regarding the outlook for business conditions.
Market insight 20.02.2018

ZEW slightly lower than expected in Germany

Germany: Zew (Feb): 92.3 vs 93.9 expected (prior: 95.2)

  • Expectations: 17.8 vs 16 expected (prior: 20.4)
  • Sentiment has slightly eased, probably more due to the recent decline in equity prices rather than broader concerns about the economy.

 

Germany: PPI (Jan): 0.5% m/m vs 0.3% expected (prior: 0.2%)

  • On a y/y basis: 2.1% vs 1.8% expected (prior: 2.3%)
  • Consumer goods prices rose by 0.1% m/m, while capital goods prices increased by 0.5% m/m.

 

Poland: PPI (Jan): 0.1%m/m vs 0% expected (prior: -0.3%)

  • On a y/y basis: 0.2% vs 0.1% expected (prior: 0.3%)
  • Manufacturing rose by 0.2% m/m, while electricity and gas declined by 0.3% m/m.

 

Poland: Retail sales (Jan): -20.5% m/m vs -21.2% expected (prior: 16.6%)

  • On a y/y basis: 8.2% vs 6.9% expected (prior: 6%).

 

Further reading

Market insight 23.02.2018

Euro area inflation confirmed the preliminary estimate, German Q4 GDP was in line

Eurozone: CPI (Jan F): 1.3% m/m as expected (prior: 1.3%)

  • On a m/m basis: -0.9% as expected (prior: 0.4%)
  • CPI core y/y: 1% as expected (prior: 1%)
  • Services inflation, which provides the best read in the initial report on domestically generated price increases, was unchanged from the initial report as well as from the December reading of 1.2%.

 

Germany: GDP (Q4 F): 0.6% q/q as expected (prior: 0.6%)

  • On a y/y basis: 2.3% as expected (prior: 2.3%)
  • Growth momentum in Q4 was mainly supported by foreign trade. Exports grew substantially by 2.7% q/q, while imports were also up by 2% q/q.
  • In terms of the domestic components, public consumption remained resilient in H2 17, Q3 growth has been revised up to 0.5% q/q (+0.5 ppt), in line with Q4 17 print (0.5% q/q).
  • On the investment side, gross fixed capital investment remained flat, with construction declining slightly.

 

Poland: Unemployment rate (Jan): 6.9% as expected (prior: 6.6%)

Market insight 22.02.2018

Business confidence slightly lower in France and Germany

US: Initial jobless claims (Feb. 17): 222k vs 230k expected (prior: 229k revised from 230k)

  • Initial jobless claims continue to flirt with multi-decade lows.

 

Germany: IFO (Feb.): 115.4 vs 117.0 expected (prior: 117.6)

  • Expectations: 105.4 vs 107.9 expected (prior: 108.3)
  • Current assessment: 126.3 vs 127.0 expected (prior: 127.8)
  • Despite falling below the 12-month average (115.7), the headline index remains elevated from a historical perspective.
  • This adds to evidence that GDP growth is probably nearing its peak, but also that the economic momentum should remain strong.

 

France: Business confidence (Feb.): 109 vs 110 expected (prior: 111 revised from 110)

  • Slightly down for the second consecutive month.
  • Like yesterday's PMIs, both the manufacturing and services sector indices edged lower but nonetheless remain at very healthy levels.

 

UK: GDP (Q4 Prel.): 0.4% q/q vs 0.5% expected (prior: 0.5%)

  • GDP y/y: 1.4% vs 1.5% expected (prior: 1.8%)
  • Q4 GDP was revised a tad lower to 0.4% q/q from 0.5% q/q.
  • The expenditure breakdown shows resilient consumption at 0.3% q/q (after 0.4% in Q3) while business investment continued to slow (from 0.5% q/q to flat in Q4). This suggests that corporates are holding back investment in the face of high levels of uncertainty regarding the outlook for business conditions.
Market insight 20.02.2018

ZEW slightly lower than expected in Germany

Germany: Zew (Feb): 92.3 vs 93.9 expected (prior: 95.2)

  • Expectations: 17.8 vs 16 expected (prior: 20.4)
  • Sentiment has slightly eased, probably more due to the recent decline in equity prices rather than broader concerns about the economy.

 

Germany: PPI (Jan): 0.5% m/m vs 0.3% expected (prior: 0.2%)

  • On a y/y basis: 2.1% vs 1.8% expected (prior: 2.3%)
  • Consumer goods prices rose by 0.1% m/m, while capital goods prices increased by 0.5% m/m.

 

Poland: PPI (Jan): 0.1%m/m vs 0% expected (prior: -0.3%)

  • On a y/y basis: 0.2% vs 0.1% expected (prior: 0.3%)
  • Manufacturing rose by 0.2% m/m, while electricity and gas declined by 0.3% m/m.

 

Poland: Retail sales (Jan): -20.5% m/m vs -21.2% expected (prior: 16.6%)

  • On a y/y basis: 8.2% vs 6.9% expected (prior: 6%).