Market insight

US: CPI (July): 0.6% m/m vs 0.3% expected (prior: 0.6%)

• A larger than expected rebound in inflation due to energy and services over the month.
• Energy prices were up by 2.5% m/m (motor fuel up by 5.5% m/m), apparel prices up by 1.1% m/m (2.3% m/m on used cars), services were up by 0.6% m/m, fueled by medical care (0.5% m/m) and communication (1.1% m/m). Food prices were down by 0.4% m/m.
• Yearly trend has rebounded on headline index from 0.6% y/y the prior month to 1% y/y, and core inflation from 1.2% y/y to 1.6% y/y.
• This represents a normalization in the inflation pattern earlier than expected (with parallel normalization in inflation expectations), due to reversal in food and energy prices from the trend seen during the lockdown, and a larger but temporary rebound in some sectors with the reopening of the economy.
• The decline in inflation has favored purchasing power in Q2, which is no longer the case.
• These data should comfort the Fed to adopt rapidly an “average inflation” target in its forward guidance policy on rates.

UK: GDP (Q2-20): -20.4% q/q vs -20.7% expected (prior: -2.2%)

• A large fall in all GDP components with the lockdown in place; consumption was down by 23% q/q, investment down by 25% q/q and trade (exports and imports) has fallen in parallel. Public consumption has also fallen by 14% q/q during the period.
• Separately, monthly proxy of GDP has pointed to progressive recovery (2.4% m/m in May, 8.7% m/m in June), thanks to rebound in domestic demand and in industrial activity with the end of the lockdown.

Sweden: CPI (July): 0.2% m/m vs -0.1% expected (prior: 0.6%)

• Food, transport-energy and leisure prices have rebounded over the month.
• Yearly trend has declined from 0.7% y/y the prior month to 0.5% y/y; core inflation has regained from 1.3% y/y the prior month to 1.5% y/y.

Eurozone: Industrial production (June): 9.1% m/m vs 10% expected (prior: 12.3% revised from 12.4%)

• The rebound in activity has continued with the end of the lockdown and all sectors have shown a rebound in production, even at a slower pace than in May. The rebound was the most pronounced in sectors hit by the lockdown.
• The total index stayed 13% below its pre-COVID level.

Brazil: Retail sales (June): 12.6% m/m vs 6.7% expected (prior: 19.2% revised from 19.6%)

• The rebound in consumption continued in June, driven by all sectors except food. Largest rebound was seen in clothes and leisure goods.
• On a yearly basis, sales were up by 0.5% y/y from -6.4% y/y the prior month.

US: NFIB Small Business optimism (July): 98.8 vs 100.5 expected (prior: 100.6)

• After a rebound in the past 3 months, sentiment has weakened on future economic situation, future higher sales and on opportunities to expand.
• Plan to hire people has modestly increased from past month.
• Despite a rebound over past 4 months, the total index remained well below its Feb. level.

US: PPI (July): 0.6% m/m vs 0.3% expected (prior: -0.2%)

• Energy prices were up by 5.3% m/m and trade services up by 0.8% m/m; core PPIs were up by 0.3% m/m, same pace as the prior month.
• Yearly trend has turned less negative, from -0.8% y/y the prior month to -0.4% y/y. Core PPI ex trade costs have rebounded from -0.1% y/y to 0.1% y/y.
• Energy prices and trade services were responsible for the rebound in prices, pointing to rising costs and some pressure on corporate margins.

UK: Unemployment rate (ILO) (July): 3.9% vs 4.2% expected (prior: 3.9%)

• Claimant count rate: 7.5% after 7.2% the prior month (revised down from 7.3%). Employment has declined by 220 k over the past three months.
• Jobless claims have increased by 94.4 k over the month after a decline by 68.5 k (-28.5 k previous estimate).
• After some improvement in June, negative trend has come back with strong rise in jobless claims.
• The unemployment rate is expected to rebound sharply in H2 if public measures on labor and wage end next October.

UK: Average earnings incl. Bonus (June): -1.2% y/y vs -1.1% expected (prior: -0.3%)

• Wages were down in all sectors except the public sector. Furloughed workers have benefited from public support on wages to compensate the loss in income.

UK: BRC retail sales (July): 4.3% y/y (prior: 10.9%)

• Non-food sales remained on a sustained trend over the past two months.

Sweden: Unemployment rate (July): 5.7% (prior: 5.3%)

• Unemployment rate is on a rising trend since Feb. (4%).

Germany: Zew (Aug.): 71.5 vs 55.8 expected (prior: 59.3)

• While sentiment on current situation has deteriorated, expectations have rebounded further among financial community.

US: JOLTS Job Openings (June): 5889 vs 5300 expected (prior: 5397)

• Job openings were strong in June and hirings also sustained (even lower than in May) with reopening of the economy.
• Openings and hirings were particularly strong in services. In parallel, separations and quitters ratios have increased from May to June.

Switzerland: Unemployment rate (sa) (July): 3.3% vs 3.4% expected (prior: 3.3%)

• Unemployed has slightly increased over the month, notably long-term unemployed, but the seasonally adjusted unemployment rate stayed stable.

Sweden: Retail sales (June): 2.9% m/m (prior: 2% revised from 1.2%)

• Yearly trend has turned less negative from -9.2% y/y the prior month to -58% y/y.

Norway: CPI (July): 0.7% m/m vs 0.5% expected (prior: 0.2%)

• Prices of food, household goods and transport have strongly rebounded over the month; core inflation was up by 0.9% m/m after 0.4% m/m the prior month.
• Yearly trend stayed quite stable (1.3% y/y after 1.4% y/y the prior month), while core inflation has gained from 3.1% y/y to 3.5% y/y.

France: Business sentiment (Bank of France) (July): 99 vs 92 expected (prior: 89)

• Sentiment has regained further on production and orders. Absolute level of orders remained depressed.
• Separately, sentiment has improved on in parallel in services, while it has stagnated in construction.

Turkey: Unemployment rate (May): 12.9% (prior: 12.8%)

• Unemployed has slightly increased over the month and trend remained up; the seasonally adjusted unemployment rate has increased from 13.8% the prior month to 14%.

US: Non-farm payrolls (July): 1800k vs 1480k expected (prior: 4800k)

• Unemployment rate has fallen from 11.1% to 10.2% (10.6% expected)
• Better than expected job creations, even lower than the past month.
• Creations were still strong in services (1423 k after 4222 k prior month): leisure-hospitality (592 k), public sector (301 k), retail (258 k). Creations were modest but positive on construction and manufacturing (20-26 k range).
• Alternative measures on unemployment rates have decreased: U6 from 18% to 16.5%.
• Hours worked were quite stable (34.5 after 34.6); wage growth remained on a 4.8% y/y trend.
• Finally, the "strong numbers" mentioned by Trump, which is positive for the underlying economic recovery but less so for ongoing fiscal negotiations at Congress.

Germany: Trade Balance (June): 15.6bn EUR vs 11.3bn expected (prior: 7bn revised from 7.1bn)

• Current account: EUR 22.4 bn after 7 bn the prior month.
• Exports: 14.9% m/m after 8.9% m/m the prior month; imports: 7% m/m after 3.6% m/m the prior month.
• Export growth is gaining more traction, refueling orders in industry.

Germany: Industrial production (June): 8.9% m/m vs 8.2% expected (prior: 7.4% revised from 7.8%)

• A second month of a strong rebound in production of capital goods. Rebound has accelerated in the other sectors, notably the consumer goods.
• Total production index remained well below its March-Feb level.

France: Industrial production (June): 12.7% m/m vs 8.4% expected (prior: 19.9% revised from 19.6%)

• Manufacturing production was up by 14.4% m/m after 22.2% m/m the prior month.
• The rebound was once again driven by auto and also by activity in refinery over the past two months.

Spain: Industrial production (June): 14% m/m vs 10% expected (prior: 14.3% revised from 14.7%)

• A second month of strong recovery in industrial activity; the rebound was mainly driven by capital goods and the auto sector, but production momentum was also sustained in the other sectors.
• Total index of production was higher than its March level, but below the Feb. level.

Norway: Industrial production (June): -2.2% m/m (prior: -0.9% revised from -1%)

• Manufacturing production was up by 0.4% m/m after -3% m/m the prior month.
• Only chemical and ships-oil platforms sectors have shown growth in production over the month.

Brazil: CPI (July): 0.36% m/m vs 0.35% expected (prior: 0.26%)

• Trend has slightly accelerated from 2.13% y/y the prior month to 2.31% y/y.
• Prices of transport, housing and energy have rebounded over the month.