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Market insight 15.11.2019

US: retail sales report were mixed and disappointing industrial production

US: retail sales report were mixed and disappointing industrial production

US: Empire manufacturing (Nov): 2.9 vs 6 expected (prior: 4)

  • Sentiment has eased on lower prices paid, inventories and shipments but new orders and conditions have rebounded.

  • Importantly, the 6-month outlook business conditions and activity components, including in orders and employment have improved.

 

US: Retail sales (Oct): 0.3% m/m vs 0.2% expected (prior: -0.3%)

  • The headline appeared to be stronger than expected, but underlying details and revisions made to prior months made for a considerably weaker outcome. The composition of October sales showed relatively broad-based weakness. Discretionary spending categories, including furniture (-0.9% vs. 0.7 prior), electronics (-0.4% vs. 0.1%), sporting goods (-0.8% vs. -0.1% prior) and restaurant sales (-0.3% vs. 0.8% prior) all saw significant declines in the month.

  • Retails sales excluding auto and gas, the category which more closely tracks consumer underlying demand, only increased 0.1%. That missed expectations (0.3% expected) following a 0.1% decline in the previous month.

  • Control retail sales that is used in GDP calculation GDP rose (as expected), offsetting the previous month's decline.

 

US: Industrial production (Oct): -0.8% m/m vs -0.4% expected (prior: -0.3% revised from -0.4%)

  • Auto production has shown a sharp contraction related to the strike at GM. The weakness was not confined to the vehicle sector. Manufacturing output excluding vehicles fell for a second month, concentrated in business and construction supplies as well as materials.

  • The coming months are likely to show a clear rebound as strike effects abate.

 

Eurozone: CPI (Oct F): 0.1% m/m vs 0.2% expected (prior: 0.2%)

  • Core inflation rose slightly to 1.1% from 1% in September due to stronger contributions from clothing prices and airfares.

  • The headline inflation rose by 0.7% y/y (down from 0.8% y/y in September). Most of the decline was driven by lower energy prices (-3.1% y/y).


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Market insight 11.11.2019

UK growth firmer in Q3, but still signs of fragilities

UK: GDP (Q3-19): 0.3% q/q vs 0.4% expected (prior: -0.2%)

  • Growth has recovered after a Q2 contraction, but slightly less than expected; consumption was on stable pace, up by 0.4% q/q and net exports have contributed positively to the growth.

  • Over the quarter, services and construction have shown some rebound after flat or contraction in Q2.

  • Separately, monthly estimates of GDP have shown a strong rebound in July (0.3% m/m), followed by some contraction in Aug. (-0.2% m/m) and in Sept. (-0.1% m/m).

  • Growth could remain moderate and fragile, as long as no visibility emerges from Brexit/elections, but a recession could be avoided.

 

UK: Industrial production (Sept.): -0.3% m/m vs -0.1% expected (prior: -0.7% revised from -0.6%)

  • Manufacturing production was down by 0.4% m/m after -0.7% m/m the prior month. Activity in oil and mining sectors has rebounded over the month.

 

Norway: CPI (Oct.): 0.2% m/m (prior: 0.5%)

  • Inflation has slightly increased from 1.5% y/y to 1.8% y/y. Core inflation was flat over the month and stable on a yearly basis (2.2% y/y).

 

Italy: Industrial production (Sept.): -0.4% m/m as expected (prior: 0.4% revised from 0.3%)

  • Production of non-durable consumer goods and capital goods was up over the month; the yearly trend has deteriorated further from -1.7% y/y the prior month to -2.1% y/y.

Market insight 14.11.2019

Q3 German growth stronger than expected

US: PPI (Oct.): 0.4% m/m vs 0.3% expected (prior: -0.3%)

  • Prices have rebounded after the fall the prior month; prices of food, energy and trade services were on a strong rebound after their fall in Sept.

  • Yearly trend has moderated on base effect, from 1.4% y/y to 1.1% y/y; core PPIs were up by 0.1% m/m ( flat past month) and were up by 1.5% y/y after 1.7% y/y.

 

US: Initial jobless claims (Nov.9): 225k vs 215k expected (prior: 211k)

  • Continuing claims: 1683 k after 1693 k past week.

 

Germany: GDP (Q3-19): 0.1% q/q vs -0.1% expected (prior: -0.2% revised from -0.1%)

  • First estimate pointed to a more resilient growth than expected, thanks to consumption, residential construction and public spending; investment and exports remained weak.

  • The manufacturing sector remained fragile, but the growth outlook should progressively improve next year.

 

France: Unemployment rate (Q3-19): 8.6% vs 8.4% expected (prior: 8.5%)

  • Unemployed has increased by 10 k after -70 k past quarter.

 

France: CPI (Oct.): -0.1% m/m as expected (prior: -0.4%)

  • Inflation was in line with the first estimate. The monthly fall was mainly due to falling food prices.

  • Yearly trend has eased from 1.1% y/y to 0.9% y/y.

 

Spain: CPI (Oct.): 0.7% m/m vs 0.6% expected (prior: 0.4%)

  • Inflation remained on a weak trend (0.2% y/y) in final data. The monthly rebound was driven mainly by clothes, and also by food and education costs.

 

Poland: GDP (Q3-19): 1.3% q/q vs 1.1% expected (prior: 0.8%)

  • Preliminary data pointed towards a rebound in growth.

 

Switzerland: PPI-import prices (Oct.): -0.2% m/m vs -0.1% expected (prior: -0.3%)

  • Import prices were down by 4.7% y/y (-4% y/y the prior month) and producer prices were down by 2.4% y/y (-2% y/y the prior month).

 

UK: RICS house price balance (Oct.): -5% vs -3% expected (prior: -3% revised from -2%)

  • Balance of sentiment among professionals has rebounded on sales, was less negative on prices, but remained cautious on future sales and new buyers.

 

UK: Retail sales (Oct.): -0.1% m/m vs 0.2% expected (prior: 0%)

  • Sales have shown a modest but broad-based contraction across sectors over the month; internet sales have regained (0.8% m/m) after two months contraction.

  • Yearly trend in sales remained healthy at 3.1% y/y.

 

Turkey: Industrial production (Sept.): 3.2% m/m (prior: -2.7% revised from -2.8%)

  • The yearly trend has also rebounded to 3.4% y/y after -3.6% y/y the prior month. The monthly rebound was driven by intermediate, capital and non-durable consumer goods.

Market insight 13.11.2019

US: firmer than expected monthly change in headline CPI

US: CPI (Oct.): 0.4% m/m vs 0.3% expected (prior: 0%)

  • Core inflation was up by 0.2% m/m after 0.1% m/m the prior month. Energy and transport prices have strongly rebounded over the month, while prices of computers and apparels have shown large monthly decrease.Rents have moderated (0.2% m/m, after 0.3% m/m) and services were up by 0.3% m/m.

  • Yearly trend has slightly accelerated for headline inflation (from 1.7% to 1.8% y/y) and core inflation has slightly moderated from 2.4% to 2.3% y/y.

 

UK: CPI (Oct.): -0.2% m/m vs -0.1% expected (prior: 0.1%)

  • Food, housing and households goods prices have significantly declined over the month; on the opposite, education and clothes remained on a sustained monthly trend.

  • The yearly trend has eased from 1.7% y/y to 1.5% y/y.

 

UK: PPI Input prices (Oct.): -1.3% m/m vs -1% expected (prior: -0.9% revised from -0.8%)

  • Imported material prices (metal, chemical) and imported equipment good prices have sharply fallen over the month, during which the GBP has strongly rebounded.

  • Yearly trend was more negative, at -5.1% y/y than -3% y/y past month.

 

UK: PPI Output prices (Oct.): -0.1% m/m vs 0% expected (prior: -0.1%)

  • Oil prices were down by 0.7% m/m and core prices down by 0.1% m/m.

  • Yearly trend has moderated from 1.2% y/y the prior month to 0.8% y/y.

 

Sweden: CPI (Oct.): 0% m/m as expected (prior: 0.5%)

  • Yearly trend has slightly increased from 1.5% to 1.6% y/y; core inflation was flat over the month and up from 1.3% to 1.5% y/y.

 

Eurozone: Industrial production (Sept.): 0.1% m/m vs -0.2% expected (prior: 0.4%)

  • While production of capital goods and non-durable consumer goods have continued to increase, production of intermediary goods and energy have fallen over the month.

  • Yearly trend has turned less negative: from -2.8% y/y past month to -1.7% y/y.

 

Germany: CPI (Oct.): 0.1% m/m as expected (prior: 0%)

  • Confirmation of first estimate; yearly trend stable at 0.9% y/y.

 

Brazil: Retail sales (Sept.): 0.7% m/m vs 0.6% expected (prior: 0.2% revised from 0.1%)

  • A strong rebound of sales of clothes, personal goods and furniture. Yearly trend has improved (2.1% y/y), but it stays volatile.

 

Russia: GDP (Q3-19): 1.7% y/y (prior: 0.9%)

  • Preliminary estimates points towards firmer growth.

Further reading

Market insight 14.11.2019

Q3 German growth stronger than expected

US: PPI (Oct.): 0.4% m/m vs 0.3% expected (prior: -0.3%)

  • Prices have rebounded after the fall the prior month; prices of food, energy and trade services were on a strong rebound after their fall in Sept.

  • Yearly trend has moderated on base effect, from 1.4% y/y to 1.1% y/y; core PPIs were up by 0.1% m/m ( flat past month) and were up by 1.5% y/y after 1.7% y/y.

 

US: Initial jobless claims (Nov.9): 225k vs 215k expected (prior: 211k)

  • Continuing claims: 1683 k after 1693 k past week.

 

Germany: GDP (Q3-19): 0.1% q/q vs -0.1% expected (prior: -0.2% revised from -0.1%)

  • First estimate pointed to a more resilient growth than expected, thanks to consumption, residential construction and public spending; investment and exports remained weak.

  • The manufacturing sector remained fragile, but the growth outlook should progressively improve next year.

 

France: Unemployment rate (Q3-19): 8.6% vs 8.4% expected (prior: 8.5%)

  • Unemployed has increased by 10 k after -70 k past quarter.

 

France: CPI (Oct.): -0.1% m/m as expected (prior: -0.4%)

  • Inflation was in line with the first estimate. The monthly fall was mainly due to falling food prices.

  • Yearly trend has eased from 1.1% y/y to 0.9% y/y.

 

Spain: CPI (Oct.): 0.7% m/m vs 0.6% expected (prior: 0.4%)

  • Inflation remained on a weak trend (0.2% y/y) in final data. The monthly rebound was driven mainly by clothes, and also by food and education costs.

 

Poland: GDP (Q3-19): 1.3% q/q vs 1.1% expected (prior: 0.8%)

  • Preliminary data pointed towards a rebound in growth.

 

Switzerland: PPI-import prices (Oct.): -0.2% m/m vs -0.1% expected (prior: -0.3%)

  • Import prices were down by 4.7% y/y (-4% y/y the prior month) and producer prices were down by 2.4% y/y (-2% y/y the prior month).

 

UK: RICS house price balance (Oct.): -5% vs -3% expected (prior: -3% revised from -2%)

  • Balance of sentiment among professionals has rebounded on sales, was less negative on prices, but remained cautious on future sales and new buyers.

 

UK: Retail sales (Oct.): -0.1% m/m vs 0.2% expected (prior: 0%)

  • Sales have shown a modest but broad-based contraction across sectors over the month; internet sales have regained (0.8% m/m) after two months contraction.

  • Yearly trend in sales remained healthy at 3.1% y/y.

 

Turkey: Industrial production (Sept.): 3.2% m/m (prior: -2.7% revised from -2.8%)

  • The yearly trend has also rebounded to 3.4% y/y after -3.6% y/y the prior month. The monthly rebound was driven by intermediate, capital and non-durable consumer goods.

Market insight 13.11.2019

US: firmer than expected monthly change in headline CPI

US: CPI (Oct.): 0.4% m/m vs 0.3% expected (prior: 0%)

  • Core inflation was up by 0.2% m/m after 0.1% m/m the prior month. Energy and transport prices have strongly rebounded over the month, while prices of computers and apparels have shown large monthly decrease.Rents have moderated (0.2% m/m, after 0.3% m/m) and services were up by 0.3% m/m.

  • Yearly trend has slightly accelerated for headline inflation (from 1.7% to 1.8% y/y) and core inflation has slightly moderated from 2.4% to 2.3% y/y.

 

UK: CPI (Oct.): -0.2% m/m vs -0.1% expected (prior: 0.1%)

  • Food, housing and households goods prices have significantly declined over the month; on the opposite, education and clothes remained on a sustained monthly trend.

  • The yearly trend has eased from 1.7% y/y to 1.5% y/y.

 

UK: PPI Input prices (Oct.): -1.3% m/m vs -1% expected (prior: -0.9% revised from -0.8%)

  • Imported material prices (metal, chemical) and imported equipment good prices have sharply fallen over the month, during which the GBP has strongly rebounded.

  • Yearly trend was more negative, at -5.1% y/y than -3% y/y past month.

 

UK: PPI Output prices (Oct.): -0.1% m/m vs 0% expected (prior: -0.1%)

  • Oil prices were down by 0.7% m/m and core prices down by 0.1% m/m.

  • Yearly trend has moderated from 1.2% y/y the prior month to 0.8% y/y.

 

Sweden: CPI (Oct.): 0% m/m as expected (prior: 0.5%)

  • Yearly trend has slightly increased from 1.5% to 1.6% y/y; core inflation was flat over the month and up from 1.3% to 1.5% y/y.

 

Eurozone: Industrial production (Sept.): 0.1% m/m vs -0.2% expected (prior: 0.4%)

  • While production of capital goods and non-durable consumer goods have continued to increase, production of intermediary goods and energy have fallen over the month.

  • Yearly trend has turned less negative: from -2.8% y/y past month to -1.7% y/y.

 

Germany: CPI (Oct.): 0.1% m/m as expected (prior: 0%)

  • Confirmation of first estimate; yearly trend stable at 0.9% y/y.

 

Brazil: Retail sales (Sept.): 0.7% m/m vs 0.6% expected (prior: 0.2% revised from 0.1%)

  • A strong rebound of sales of clothes, personal goods and furniture. Yearly trend has improved (2.1% y/y), but it stays volatile.

 

Russia: GDP (Q3-19): 1.7% y/y (prior: 0.9%)

  • Preliminary estimates points towards firmer growth.

Market insight 12.11.2019

Rising business sentiment in the US (small firms) and strong rebound in German ZEW expectations

US: NFIB Small Business optimism (Oct.): 102.4 vs 105 expected (prior: 101.8)

  • Sentiment has slightly regained from past month low level, but the index level remains below Q2-19 and 2018 levels.

  • Sentiment has slightly increased on capital spending, improving economy and sales, and on net compensation.

  • Plan to hire index has marginally regained after the fall past month.

 

UK: Unemployment rate (ILO) (Sept.): 3.8% vs 3.9% expected (prior: 3.9%)

  • Claimant count: 3.4% after 3.3% the prior month; jobless claims: 33 k after 13.5 k prior month (revised from 21.1 k).

  • While unemployed has slightly decreased (more full time workers, less part time), the claimant count is on a regular rising trend over the past two years.

 

UK: Average earnings incl. Bonus (Sept.): 3.6% y/y vs 3.8% expected (prior: 3.7% revised from 3.8%)

  • Wage growth has slightly eased over the past two months, peaking from July (3.9% y/y). The trend has eased for wage growth in both public and service sectors.

 

Norway: GDP Mainland (Q3-19): 0.7% q/q vs 0.8% expected (prior: 0.7%)

  • While net trade was negative, public consumption and investment were relatively strong; consumption stayed on a quite stable growth trend, up by 0.4% q/q.

 

France: Business sentiment (Bank of France) (Oct.): 98 vs 97 expected (prior: 96)

  • Sentiment has increased as opinions on production and orders have strongly rebounded from prior month.

  • Sentiment is forming a bottom, but its level of index remains below 2017 levels.

 

Germany: Zew (Nov.): -2.1 vs -13 expected (prior: -22.8)

  • A strong rebound in confidence after several months of regular falls.

 

Turkey: Current account (Sept.): 2.48bn USD vs 2.15bn expected (prior: 2.68bn revised from 2.6bn)

  • Trade deficit has moderated, but surplus in services has decreased from past month.