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Daily Macroeconomic Digest

Wednesday 01 July
Strong rebound in PMI-ISM manufacturing

US: ADP Employment change (June): 2369k vs 2900k expected (prior: 3065k revised from -2760k)

  • Job creations were below expectations, while past month data were strongly revised up.
  • Trend was driven by resuming activity in services, with a rebound in jobs in leisure, health and trade/transport sectors. Creations were also sustained over the past two months in the construction sector.


US: Markit Manufacturing PMI (June): 49.8 vs 49.6 expected (prior: 39.8)

  • Final index is better than expected and just below the 50 level. Sentiment on new orders and production has improved from past month.


US: ISM Manufacturing (June): 52.6 vs 49.8 expected (prior: 43.1)

  • A strong rebound of sentiment on production and new orders; the two related indices were back above 50 (57.3 and 56.4 respectively), reflecting the effects of the end of the lockdown.
  • Sentiment on other components and particularly on exports, backlog of orders and employment have all improved from the prior month, but indices remained well below 50.
  • Activity is on a recovery trend at the end of Q2, paving the way to a return to growth if new COVID cases in some states do not oblige to renewed lockdown.


US: Construction spending (May): -2.1% m/m vs 1% expected (prior: -3.5% revised from -2.9%)

  • During the lockdown, activity has declined in construction.


Eurozone: PMI Manufacturing (June): 47.4 vs 46.9 expected (prior: 39.4)

  • Final business sentiment was more positive than initially estimated and has significantly and rapidly rebounded from depressed levels.
  • Sentiment has rebounded in all major countries: the index has passed above 50 in France (52.3), and the rebound was strong in Germany (from 36.6 to 45.2) and in Spain (from 38.3 to 49). Sentiment in Italy was slightly lower than expected and the rebound from the prior month was limited.
  • Sentiment on production (notably for consumer goods) and orders was less depressed than past months, while export orders remained weak.
  • A regaining momentum in industry is under way entering Q3.


Germany: Retail sales (May): 13.9% m/m vs 3.5% expected (prior: -6.5% revised from -5.3%)

  • A strong rebound in all sectors (particularly for clothes, IT goods and furniture) after sharp decline the prior month.


Germany: Unemployment rate (June): 6.4% vs 6.5% expected (prior: 6.3%)

  • Unemployed has increased by 69 k (120 k expected after 237 k the prior month).
  • Unemployment has moderated from the prior month, but the trend is still rising even at slower pace.


Poland: PMI Manufacturing (June): 47.2 vs 46.1 expected (prior: 40.6)

  • With progressive end of the lockdown, the sentiment on production and orders has strongly rebounded.


UK: Nationwide house prices (June): -1.4% m/m vs -0.6% expected (prior: -1.7%)

  • Yearly trend was negative: -0.1% y/y after 1.8% y/y the prior month.


UK: PMI Manufacturing (June): 50.1 as expected (prior: 40.7)

  • While sentiment remained depressed on exports, it has rebounded to growth territory on production.


Switzerland: PMI Manufacturing (June): 41.9 vs 48 expected (prior: 42.1)

  • Sentiment has slightly increased on production and orders but eased on supply delivery.


Russia: PMI Manufacturing (June): 49.4 vs 45 expected (prior: 36.2)

  • A rebuilding momentum in production and orders.


Turkey: PMI Manufacturing (June): 53.9 (prior: 40.9)

  • Sentiment on new orders has strongly rebounded and the index has passed above 50 (at 53.2).


Tuesday 30 June
US: strong rebound in consumer confidence, but modest increase in Chicago MNI-PMI

US: S&P CoreLogic CS 20-City (April): 3.98% y/y vs 3.8% expected (prior: 3.91% revised from 3.92%)

  • Monthly and yearly trend remained positive in aggregated house prices.


US: Chicago MNI (ex PMI - June): 36.6 vs 45 expected (prior: 32.3)

  • Despite some rebound in activity, sentiment has improved less than expected.


US: Consumer confidence (CB) (June): 98.1 vs 91.5 expected (prior: 85.9 revised from 86.6)

  • Sentiment has increased from past month; opinions on current situation have rebounded but remained well below March level. The rebound was mainly driven by improving current conditions on the labor market.
  • Expectations have rebounded, coming closer to their Feb. level, thanks to improving 6-month views on future activity and employment.
  • Willingness to buy large items has strongly rebounded for autos and houses coming closer or even slightly above the level seen in Q1-20.


UK: GDP (Q1 20): -2.2% q/q vs -2% expected (prior: 0%)

  • Final data have pointed towards slightly sharper decline in Q1 than initially estimated.
  • All major sectors have shown sharp contraction; exports were down by 13.5% q/q (with negative net exports contribution), consumption down by 2.5% q/q and investment down by just 1.1% q/q.
  • By sector, the largest fall was seen in utility, leisure, hotels and public sectors.
  • Q2 is expected to show double digit contraction and the 2020 yearly recession should be close to 8%y/y.


Switzerland: KOF (June): 59.4 vs 77 expected (prior: 49.6 revised from 53.2)

  • Business sentiment stayed relatively depressed and below expectations.


Eurozone: CPI estimate (June): 0.3% y/y vs 0.2% expected (prior: 0.1%)

  • Inflation is expected to regain after past month lows; core inflation is expected to slightly ease from 0.9% y/y to 0.8% y/y.


France: CPI (June): -0.1% m/m vs 0.3% expected (prior: 0.2%)

  • Preliminary inflation has pointed to further decline, contrary to expectations. While energy prices have rebounded over the month (1.8% m/m), fresh food prices have sharply declined (-5.4% m/m).
  • Trend has declined further from 0.4% y/y the prior month to 0.1% y/y.


France: Consumer spending (May): 36.6% m/m vs 30% expected (prior: -19.1% revised from -20.2%)

  • Sales of autos, durable goods and clothes have strongly rebounded over the month after two-month decline. In absolute terms, consumption remained well below its February levels (-7%), but this rebound looks positive for potential Q3 rebound and limited fall in Q2.


France: Producer Prices (May): -0.1% m/m (prior: -2.9%)

  • PPIs remained in negative trend, but less severe than in the prior month (-4.1% y/y after -4.5% y/y) due to a rebound in energy prices.


Italy: PPI (May): -0.3% m/m (prior: -3.5% revised from -3.4%)

  • PPIs remained in negative trend (-5.1% y/y after -5.3% y/y the prior month).


Italy: CPI (June): 0% m/m vs 0.1% expected (prior: -0.3% revised from -0.2%)

  • Food prices have turned negative over the month and energy and leisure prices have rebounded.
  • Yearly trend remained negative: -0.4% y/y after -0.3% y/y the prior month.


Poland: CPI (June): 0.7% m/m vs 0.3% expected (prior: -0.2%)

  • Food prices have slightly declined over the month, but energy prices have strongly rebounded (+5.4% m/m).


Brazil: Unemployment rate (May): 12.9% vs 13.1% expected (prior: 12.6%)



Monday 29 June
Sharp rebound in US pending home sales

US: Pending home sales (May): 44.3% m/m vs 19.3% expected (prior: -21.8%)

  • Following a 21.8% drop in April, pending home sales rebounded sharply in May (+44.3% m/m; -10.4% y/y) in all US regions, including a 56.2% monthly jump in the West and a 43.3% gain in the South.
  • However, even with the outsize advance, the index SA (current level: 99.6) is below the pre-pandemic high of 111.4, reached in February.


UK: M4 (May): 11.9% y/y (prior: 9.5%)

  • While monetary aggregates have accelerated further, lending growth remained on stable but sustained trend (6.8% y/y).


Eurozone: Industrial confidence (June): -21.7 vs -19.7 expected (prior: -27.5)

  • Sentiment has modestly improved from the prior month; views on future production have improved with the end of the lockdown but sentiment on orders and exports remained depressed and even decreased further.
  • Finally, sentiment on employment was just less depressed than past month.


Eurozone: Consumer confidence (June): -14.7 (prior: -18.8)

  • Sentiment has slightly regained, mainly on future economic situation and employment, but unemployment remained an important concern.


Eurozone: Service confidence (June): -35.6 vs -25.4 expected (prior: -43.6)

  • Sentiment has regained, driven by prospects of the end of the lockdown and rising future demand; nevertheless, views on future activity remained low.


Germany: CPI (June): 0.7% m/m vs 0.4% expected (prior: 0%)

  • Preliminary data pointed to a rebound in inflation trend, from 0.5% y/y to 0.8% y/y.


Spain: CPI (June): 0.4% m/m as expected (prior: 0.1%)

  • Estimate for inflation has pointed towards a rebound, from -0.9% y/y to -0.3% y/y.


Brazil: CPI (June): 1.56% m/m vs 1.5% expected (prior: 0.28%)

  • Proxy for global inflation (production prices, consumer prices and construction costs) has rebounded on rising producer prices on raw materials.
  • At consumer level, prices have stabilized (0.04% m/m after -0.6% m/m): except food prices, leisure and household goods prices remained under contraction over the month. Trend in consumer prices has slightly regained from 1.6% y/y the prior month to 1.76% y/y.
Friday 26 June
US: rebounding household sentiment and consumer spending, but slower than expected

US: Personal income (May): -4.2% m/m vs -6% expected (prior: 10.8% revised from 10.5%)

  • Wage growth has rebounded (2.5% m/m), but unemployment benefits and income supports have declined from the prior month, leading to declining disposable income (-4.9% m/m).


US: Personal spending (May): 8.2% m/m vs 9.3% expected (prior: -12.6% revised from -13.6%)

  • Purchases of goods and services have rebounded, but slightly less than expected; positive revisions to prior month data.


US: Core PCE (May): 0.1% m/m vs 0% expected (prior: -0.4%)

  • Energy prices have declined further, while food prices have accelerated further.
  • Core prices stayed on a stable trend (1% y/y).


US: Consumer confidence (Michigan) (June): 78.1 vs 79.2 expected (prior: 72.3)

  • Sentiment has improved on both current views and expectations but slightly less than in the first estimate.
  • Views on future economy have improved, while opinions regarding personal financial situation have improved less than in the first estimate and unemployment remained a concern.
  • Willingness to buy big items has improved and they did not change so much in final estimate from the first estimate, which should be positive for consumption trend.


Sweden: Retail sales (May): 0.5% m/m vs 0% expected (prior: 0.4% revised from 0.2%)

  • Sales have rebounded over the past two months and the yearly trend has recovered into positive (2.4% y/y after -1.4% y/y the prior month).


Norway: Retail sales (May): 2.8% m/m vs -0.5% expected (prior: 4.8%)

  • A rebound in food sales have maintained total sales on positive yearly trend.


Eurozone: M3 (May): 8.9% y/y vs 8.7% expected (prior: 8.2% revised from 8.3%)

  • M2 and M1 growth trend has accelerated further.
  • Credit to private sector has increased by 4.9% y/y after 4.4% y/y the prior month.
  • The ECB policy seems to be successful maintaining favorable environment for credit to real economy.


France: Consumer confidence (June): 97 vs 95 expected (prior: 93)

  • Sentiment was globally less negative, and it has rebounded from the prior month; unemployment remained a concern.


Italy: Consumer confidence (June): 100.6 vs 97.5 expected (prior: 94.3)

  • Sentiment has rebounded to past March level, driven by rising expectations on future activity; nevertheless, views on current situation remained depressed.


Italy: Manufacturing confidence (June): 79.8 vs 80 expected (prior: 71.5 revised from 71.2)

  • Sentiment has regained from depressed levels the prior month, mainly driven by sentiment on future production.


Spain: Retail sales (real) (May): -19% y/y vs -19.8% expected (prior: -31.6%)

  • On a monthly basis, sales have rebounded by 19% m/m, driven by purchases of personal and household goods after four months of declines.


Thursday 25 June
US: rebound in durable orders goods, but modest decline in weekly jobless claims

US: Initial jobless claims (June 20): 1480k vs 1320k expected (prior: 1540k revised from 1508k)

  • Continuing claims: 19522 k (20000 k expected) after 20289 k past week.
  • Trend in unemployment benefit is decreasing but more slowly than expected over the past weeks.
  • States that currently faced renewed COVID cases have also seen the rise in in weekly claims, which should weigh on consumption and activity in these areas.


US: Durable goods orders (May): 15.8% m/m vs 10.5% expected (prior: -18.1% revised from -17.7%)

  • Except orders for non-defense aircraft in sharp fall, orders have strongly rebounded in the other sectors, driven by higher demand in metals.
  • Orders for capital goods non-defense and ex aircraft (core orders) were up by 2.3% m/m after -6.5% m/m. this remained modest improvement after several months of decline.
  • Shipments were up by 4.4% m/m after -18.6% m/m the prior month (up also by 1.8% m/m for core orders), and inventories were up by 0.1% m/m.
  • Transport and aircraft are fueling even higher volatility than in normal times; a full recovery of capex could lag other sectors and downside risks have recently increased again in some specific states.


US: Wholesale inventories (May): -1.2% m/m vs 0.4% expected (prior: 0.2% revised from 0.3%)

  • Inventories have declined in all sectors, particularly in autos.


Germany: GFK consumer confidence (July): -9.6 vs -12 expected (prior: -18.6 revised from -18.9)

  • Preliminary data pointed towards improving confidence after two months of depressed index.


Spain: PPI (May): -0.2% m/m (prior: -3%)

  • Oil prices included in PPIs have continued to decrease and food prices have turned negative over the month.
  • Yearly trend has declined further from -8.4% y/y the prior month to -8.7% y/y.


Brazil: CPI (IBGE) (June): 0.02% m/m vs -0.06% expected (prior: -0.59%)

  • Prices for household items have rebounded over the month, while declines in other sectors were less pronounced than in the prior month.
  • Yearly trend has moderately declined from 1.96% y/y the prior month to 1.92% y/y.


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