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Daily Macroeconomic Digest

Friday 10 August
Moderate US inflation; UK GDP has rebounded in Q2

US: CPI (July): 0.2% m/m as expected (prior: 0.1%)

  • Inflation remained moderate; prices of energy, apparels and computers were down over the month, while rents and services were up by 0.3% m/m; core inflation was up by 0.2% m/m as expected.
  • Headline inflation stayed on a stable trend at 2.9% y/y, while core inflation has slightly accelerated at 2.4% y/y after 2.3% y/y the prior month.
  • Headline inflation is expected to moderate at year-end, but the Fed should continue to hike in H2-18.


France: Industrial production (June): 0.6% m/m vs 0.5% expected (prior: -0.2%)

  • Activity has rebounded in all sectors, and particularly activity in refinery, reversing the decrease seen past months.
  • Construction and production of autos have both rebounded, which should be a positive signal for consumption and growth on Q3.


UK: Industrial production (June): 0.4% m/m vs 0.3% expected (prior: -0.2% revised from -0.4%)

  • The rebound was mainly led by consumer goods production, while production in investment good was flat; production was down for intermediate, energy and oil sectors.


UK: GDP (Q2-18): 0.4% q/q as expected (prior: 0.2%)

  • Investment has driven the rebound, with firmer consumption. Exports have sharply fallen, still contributing negatively to GDP.
  • In terms of sectors, the main positive contribution came from services, transport, leisure and water distribution.
  • On a yearly basis, GDP has stabilized at 1.3% y/y, but domestic growth has slowed down further from 2.3% y/y in Q4-17.
  • The growth outlook depends from next UK-EU negotiations on Brexit.


Russia: GDP (Q2-18): 1.8% y/y vs 1.9% expected (prior: 1.3%)

  • Growth trend has slightly improved by Q2, but remained moderate as sanctions remained a drag on activity.
Thursday 09 August
US: flat monthly PPIs due to lower food and energy prices

US: Initial jobless claims (Aug. 4): 213k vs 220k expected (prior: 219k revised from 218k)

  • Continuing claims: 1755 k after 1726 k the prior week.


US: PPI (July): 0% m/m vs 0.2% expected (prior: 0.3%)

  • Prices stayed moderate due to lower prices in food and energy. Few rises are related to the increase of tariffs in steel.
  • Core prices (ex food, energy and trade) were up by a firmer 0.3% m/m; prices of capital equipment, transport and travel services have strongly rebounded over the month. This could push higher inflation at the core PCE/CPI level later on.
  • PPIs stayed on a quite stable yearly trend: 3.3% y/y after 3.4% y/y the prior month.


US: Wholesale inventories (June): 0.1% m/m vs 0% expected (prior: 0%)

  • Inventories have decreased on autos but have risen further for machinery; sales were negative (-0.1% m/m after 2.1% m/m), but were positive for autos and sustained for machinery.
  • The inventory-to-sales ratio stayed stable at a low level.


UK: RICS house price balance (July): 4% as expected (prior: 3% revised from 2%)

  • Sentiment on housing has slightly increased, but views on prices and future sales have weakened.


Switzerland: Unemployment rate (sa) (July): 2.6% as expected (prior: 2.6%)

  • Unemployed has decreased further, but its pace has moderated compared to the prior quarter.
Wednesday 08 August
Stable business confidence in France; weakening industrial activity in Spain

France: Business sentiment (Bank of France) (July): 101 as expected (prior: 101)

  • Sentiment has eased on production and orders, but it has globally stabilized.


Spain: Industrial production (June): -0.6% m/m vs -0.2% expected (prior: 0.8% revised from 0.9%)

  • A large fall in production in energy and in durable consumer goods.
  • Trend in industry has slowed down, and is now at the bottom of the growth range (0-5%y/y) in place since 2014.


Brazil: CPI (IBGE) (July): 0.33% m/m vs 0.26% expected (prior: 1.26%)

  • Housing prices remained on a strong growth, but prices of food and clothes have decreased over the month.
  • Inflation is still on a rising trend: 4.48% y/y after 4.39% y/y in June.
Tuesday 07 August
Sustained job openings in the US; Germany: industrial activity at risk

US JOLTS survey (June): 6662 k vs 6625 k expected (6659 k prior month, revised from 6638 k)

  • Hiring and job opening remained on a sustained trend after upwards revisions, while quitters stayed at a high level but have moderated from the prior month.
  • On average, labor remains on a healthy trend, with rising turnover.

Germany: Industrial production (June): -0.9% m/m vs -0.5% m/m expected (prior: 2.4%m/m)

  • Except energy, production has fallen in all sectors including construction.
  • This came after a strong rebound in May; as orders have fallen on trade concerns, there is a clear risk to see further disappointing numbers for July-August industrial activity.

Germany: Current account balance (June): EUR 26.2 bn vs EUR 21 bn expected (prior: EUR 12.6 bn)

  • Exports were flat over the month, while imports were up by 1.2% m/m.
  • Trade and current account surplus has increased further despite flat export performances.

UK: BRC sales (like-for-like) (July): 0.5% y/y vs 1.5% expected (prior: 1.1%)

  • The rebound has been driven by food sales, but total figures remained below expectations.

Sweden: Industrial production (June): 1.2% m/m (prior: 2.9%)

  • Trend in production has increased from 4.7% y/y to 5.7% y/y.

Norway: Industrial production (June): 4.7% m/m (prior: -1.0%)

  • Manufacturing production was flat (versus 0.3% m/m expected) and after -0.6% m/m in the prior month.
  • Extraction industry, oil-related industry and capital good production have rebounded over the month, while other sectors were flat or negative.
  • Total production was up by 2.4% y/y but manufacturing production stayed on a more moderate trend (0.6% y/y).
Monday 06 August
Germany: falling orders on rising trade concerns

Germany: Factory orders (June): -4% m/m vs -0.5% expected (prior: 2.6%)

  • With rising uncertainties on trade, orders fell on all categories, including on domestic orders; foreign orders have fallen the most in all sectors from intermediate to consumer goods.
  • After some improvement in the German economic indicators, situation has reversed with rising trade uncertainties; trade dispute could impact real data after having only a limited impact on sentiment in the manufacturing sector.


Russia: CPI (July): 0.3% m/m vs 0.4% expected (prior: 0.5%)

  • Food prices have moderated over the month. Yearly inflation has increased from 2.3% y/y to 2.5% y/y. Core inflation was also up by 0.3% m/m and up by 2.4% y/y.
  • Upside risks could remain in place in H2-18.
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