US: strong retail sales, rising consumer confidence but disappointing industrial activity
US: Retail sales (Sept.): 1.9% m/m vs 0.8% expected (prior: 0.6%)
- Core sales were up by 1.3% m/m vs 0.3% m/m expected, -0.3% m/m the prior month.
- Sales were strong in all segments, except for electronics; the most important rebound was seen in autos, clothes, sport and restaurants.
- Lower but still existing income support, high savings and still positive labor market have underpinned stronger purchases in Sept, and in Q3 globally; this bodes well for Q3 GDP, expected above 30% q/q saar.
US: Industrial production (Sept.): -0.6% m/m vs 0.5% expected (prior: 0.4%)
- The disappointing numbers were mainly due to sharp reversal in auto production (-6.7% m/m), but energy and production of equipment goods were also weak in parallel.
- These data pointed towards downside risks in Q4, and the high level of dependence of activity to the consumer related sectors.
US: Consumer confidence (Michigan) (Oct.): 81.2 vs 80.5 expected (prior: 80.4)
- Sentiment was better than expected but fuelled by rising expectations while current sentiment has eased contrary to expectations.
- Future views were more positive on the economy, unemployment and income situation.
- The current view has moderated after the prior month rebound with less positive situation on income and also willingness to buy large items, except housing.
- Cautious stance on current situation could reflect uncertainties on contagion, fiscal debate and uncertainties related to presidential elections, while the outlook remained positive and sales still positively oriented.
US: Business inventories (Aug.): 0.3% m/m vs 0.4% expected (prior: 0.1%)
- Inventories have increased for autos and general merchandises; sales were up by 0.6% m/m.
Eurozone: CPI (Sept.): 0.1% m/m as expected (prior: %)
- Headline inflation was down by 0.3 % y/y after -0.2 % y/y the prior month; final data were in line with expectations, showing declining monthly data in energy, food and in services; one part is due to VAT cuts in Germany, but also related to weakening demand in some sectors.
- This environment should add pressure on the ECB to accommodate further its monetary stance or to adopt a new inflation targeting strategy.