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Market insight 18.11.2020

US housing starts on record highs

US housing starts on record highs

US: Housing starts (Oct.): 1530k vs 1460k expected (prior: 1459k revised from 1415k)

  • Building permits: 1545 k vs 1567 k expected; 1545 k prior month.
  • Housing starts have increased further, particularly for single family houses and data were back to the 2019 highs. Building permits for single family houses have increased in parallel, while total permits stayed below expectations.
  • Despite some losing momentum in several sectors (retail sales, consumer confidence, regional business confidence) demand for housing remained strong especially for houses outside cities, benefiting from still low interest rates and a remaining healthy labour.

 

UK: CPI (Oct.): 0% m/m vs -0.1% expected (prior: 0.4%)

  • While prices of clothes and education were on the rise over the month, prices for energy, housing and health have declined on a monthly basis.
  • Yearly trend in headline inflation has accelerated from 0.5% y/y the prior month to 0.7% y/y. Core inflation has also gained further, from 1.3% y/y to 1.5% y/y. Despite these trends, inflation remained well below target, and BoE's communication this week has pointed towards further accommodation if necessary.

 

UK: PPI Input prices (Oct.): 0.2% m/m vs 0% expected (prior: 0.3% revised from 1.1%)

  • Prices were on a less negative trend, from -2.2% y/y the prior month to -1.3% y/y.

 

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

  • Energy prices were down over the month.
  • Yearly trend has turned less negative from -1.6% y/y the prior month to -1.3% y/y.

 

Eurozone: CPI (Oct.): 0.2% m/m as expected (prior: 0.1%)

  • Core inflation was up by 0.1 % m/m; over the month, the rises in food and energy prices have been balanced by decreasing service prices.
  • Yearly trend remained stable, down by 0.3% y/y.

 


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Actualités les plus lues

Market insight 24.11.2020

US consumer confidence has declined more than expected

US: Consumer confidence (CB) (Nov.): 96.1 vs 98 expected (prior: 101.4 revised from 100.9)

  • Sentiment has decreased more than expected from the prior month.
  • Sentiment on current conditions has decreased from 106.2 past month to 105.9; it remained at high level, notably on employment.
  • Expectations have dramatically fallen from 98.2 past month to 89.5, back to their previous lows seen during the year. This fall was mainly driven by rising worries on future economy and future employment.
  • It seems that rising virus contagion, renewed local restrictions, coupled with some political uncertainties after US elections, have weighed down on consumer confidence.

 

US: Richmond Fed manufacturing (Nov.): 15 vs 20 expected (prior: 29)

  • Views on current situation has decreased from the prior month, on lower production, orders, shipments and employment.
  • The 6-month view remained stable, notably on orders and capex.

 

US: House price Index MoM (FHFA) (Sept.): 1.7% m/m vs 0.8% expected (prior: 1.5%)

  • Prices remained on a rising trend; prices were up by 9.1% y/y.

 

US: S&P CoreLogic CS 20-City (Sept.): 6.57% y/y vs 5.3% expected (prior: 5.33% revised from 5.18%)

  • Prices stayed on a rising monthly trend (1.27% m/m after 1.35% m/m the prior month); yearly trend has accelerated further.

 

France: Business confidence (Nov.): 79 vs 84 expected (prior: 90)

  • Business sentiment has sharply declined, back to March level, due to the fall in retail and services.
  • Confidence in the manufacturing sector has marginally eased, from 94 to 92; while views on orders were marginally less negative, opinions have sharply declined on future production; the production largely contributed to past months recovery after the lockdown.

 

Germany: IFO (Nov.): 90.7 vs 90.2 expected (prior: 92.5 revised from 92.7)

  • Business sentiment has decreased from the prior month, but less than expected as seen in PMI data.
  • Sentiment on current situation stayed quite resilient (index at 90 from 90.4 the prior month), but expectations have declined more than expected, from 94.7 to 91.5, back to index level seen in Jan.
  • As seen in PMI, the fall in confidence seems limited, and more limited in Germany than in France.

 

Germany: GDP (Q3-20): 8.5% q/q vs 8.2% expected (prior: -9.8%)

  • Final data pointed towards stronger recovery than initially estimated.
  • Consumption was up by 10.8% q/q, investment up by 3.6% q/q and public consumption by 0.8% q/q; net exports were positive over the quarter (3.9 pp contribution).
  • With renewed lockdown, GDP should contract again in Q4-20.

 

Turkey: Industrial confidence (Nov.): 107.4 (prior: 109.7)

  • Views on current orders have slightly increased, but opinions on output, new orders and new exports have all decreased significantly from the prior month.
  • Despite current slowdown, the index remained at higher level than during the crisis.
Market insight 23.11.2020

Business sentiment: positive momentum in place in the US vs weakening sentiment in services in Europe

US: Markit Manufacturing PMI (Nov.): 56.7 vs 53 expected (prior: 53.4)

  • Contrary to expectations and to some regional surveys, momentum remained positive in manufacturing from the prior month.
  • The index has increased further to reach the highs seen in 2018.

 

US: Markit Services PMI (Nov.): 57.7 vs 55 expected (prior: 56.9)

  • Sentiment in services has also increased further from the prior month; despite some local restrictions at state level and slower high frequency indicators in services in big cities, sentiment remained on a positive momentum.
  • The service index has recovered to the highs seen in 2018.

 

UK: PMI Manufacturing (Nov.): 55.2 vs 50.5 expected (prior: 53.7)

  • Sentiment has increased further over the month, contrary to expectations.
  • Despite weakening sentiment on new orders, momentum remained positive in manufacturing industry, with prospects of a vaccine production.

 

UK: PMI Services (Nov.): 45.8 vs 43 expected (prior: 51.4)

  • With renewed lockdown, sentiment has sharply decreased in services from the prior month, as these sectors were the most hit by restrictions; nevertheless, the index remained above expectations and was back to June or Feb. levels.

 

Switzerland: M3 (Oct.): 5.6% y/y vs 4.1% expected (prior: 4.2%)

  • M1 and M3 have strongly accelerated over the month, due to expanding liquidities.

 

Eurozone: PMI Manufacturing (Nov.): 53.6 vs 53.2 expected (prior: 54.8)

  • Sentiment has declined from the prior month, but less than expected.
  • According to preliminary data, sentiment has sharply declined in France (index at 49.1), while it has only modestly decreased in Germany, remaining relatively high (57.9).

 

Eurozone: PMI Services (Nov.): 41.3 vs 42 expected (prior: 46.9)

  • With restrictions and new lockdown, sentiment has significantly decreased in services.
  • According to preliminary data, sentiment has plunged back to low levels in France (index at 38 from 46.5); index has also decreased in Germany, but at a lower extend (from 49.5 to 46.2).

 

Poland: Retail sales (Oct.): 2.3% m/m vs 2.9% expected (prior: -1.8%)

  • Highly volatile data; the rebound was mainly driven by household goods, food and pharma products.
  • The yearly trend was negative, down by 2.5% y/y.
Market insight 20.11.2020

Firmer than expected UK retail sales

UK: GFK consumer confidence (Nov.): -33 vs -34 expected (prior: -31)

  • Consumers remained worried about economic conditions and sentiment has deteriorated over the month on present and future personal financial conditions.
  • The index remained above the lows seen in March (index at -37)

 

UK: Retail sales (Oct.): 1.2% m/m vs -0.3% expected (prior: 1.4% revised from 1.5%)

  • Sales were better than expected, driven by household goods, sales in non-specialized stores and by internet sales.
  • Pre-Christmas sales and inventory building in a lockdown environment have boosted sales; consequently, sales in Nov. should significantly fall.

 

Eurozone: Consumer confidence (Nov.): -17.6 vs -18 expected (prior: -15.5)

  • Consumer confidence has decreased slightly less than expected from the prior month, according to preliminary estimates.
  • The index plunged at -22 in March and rebounded to -14 in Sept.; with renewed lockdown, the index was back in the middle of this range; if lockdown lasts longer than expected, confidence and activity should decline further.

 

Germany: PPI (Oct.): 0.1% m/m as expected (prior: 0.4%)

  • Prices of energy and basic goods were up by 0.1 %m/m, while those of non-durable consumer goods were down by 0.2% m/m.
  • Yearly trend was just less negative, from -1% y/y the prior month to -0.7% y/y.

 

Italy: Industrial orders (Sept.): 3.2% m/m (prior: 5.8% revised from 6.1%)

  • Industrial sales were down by 3.2% m/m after 5.6% m/m the prior month.
  • Foreign orders were flat over the month, only domestic orders were up by 5% m/m.

 

Poland: Industrial production (Oct.): 3.2% m/m vs 2.5% expected (prior: 15.5%)

  • The pace of activity has globally slowed down over the month; activity remained sustained in mining and utility sectors, while it looked on moderate pace in manufacturing (up by 2.3% m/m after 17% m/m the prior month).

 

Turkey: Consumer confidence (Nov.): 80.1 (prior: 81.9)

  • Confidence has decreased over the month; the fall was broad-based on sub-components but driven by lower expectations on future economic activity.

A lire également

Market insight 24.11.2020

US consumer confidence has declined more than expected

US: Consumer confidence (CB) (Nov.): 96.1 vs 98 expected (prior: 101.4 revised from 100.9)

  • Sentiment has decreased more than expected from the prior month.
  • Sentiment on current conditions has decreased from 106.2 past month to 105.9; it remained at high level, notably on employment.
  • Expectations have dramatically fallen from 98.2 past month to 89.5, back to their previous lows seen during the year. This fall was mainly driven by rising worries on future economy and future employment.
  • It seems that rising virus contagion, renewed local restrictions, coupled with some political uncertainties after US elections, have weighed down on consumer confidence.

 

US: Richmond Fed manufacturing (Nov.): 15 vs 20 expected (prior: 29)

  • Views on current situation has decreased from the prior month, on lower production, orders, shipments and employment.
  • The 6-month view remained stable, notably on orders and capex.

 

US: House price Index MoM (FHFA) (Sept.): 1.7% m/m vs 0.8% expected (prior: 1.5%)

  • Prices remained on a rising trend; prices were up by 9.1% y/y.

 

US: S&P CoreLogic CS 20-City (Sept.): 6.57% y/y vs 5.3% expected (prior: 5.33% revised from 5.18%)

  • Prices stayed on a rising monthly trend (1.27% m/m after 1.35% m/m the prior month); yearly trend has accelerated further.

 

France: Business confidence (Nov.): 79 vs 84 expected (prior: 90)

  • Business sentiment has sharply declined, back to March level, due to the fall in retail and services.
  • Confidence in the manufacturing sector has marginally eased, from 94 to 92; while views on orders were marginally less negative, opinions have sharply declined on future production; the production largely contributed to past months recovery after the lockdown.

 

Germany: IFO (Nov.): 90.7 vs 90.2 expected (prior: 92.5 revised from 92.7)

  • Business sentiment has decreased from the prior month, but less than expected as seen in PMI data.
  • Sentiment on current situation stayed quite resilient (index at 90 from 90.4 the prior month), but expectations have declined more than expected, from 94.7 to 91.5, back to index level seen in Jan.
  • As seen in PMI, the fall in confidence seems limited, and more limited in Germany than in France.

 

Germany: GDP (Q3-20): 8.5% q/q vs 8.2% expected (prior: -9.8%)

  • Final data pointed towards stronger recovery than initially estimated.
  • Consumption was up by 10.8% q/q, investment up by 3.6% q/q and public consumption by 0.8% q/q; net exports were positive over the quarter (3.9 pp contribution).
  • With renewed lockdown, GDP should contract again in Q4-20.

 

Turkey: Industrial confidence (Nov.): 107.4 (prior: 109.7)

  • Views on current orders have slightly increased, but opinions on output, new orders and new exports have all decreased significantly from the prior month.
  • Despite current slowdown, the index remained at higher level than during the crisis.
Market insight 23.11.2020

Business sentiment: positive momentum in place in the US vs weakening sentiment in services in Europe

US: Markit Manufacturing PMI (Nov.): 56.7 vs 53 expected (prior: 53.4)

  • Contrary to expectations and to some regional surveys, momentum remained positive in manufacturing from the prior month.
  • The index has increased further to reach the highs seen in 2018.

 

US: Markit Services PMI (Nov.): 57.7 vs 55 expected (prior: 56.9)

  • Sentiment in services has also increased further from the prior month; despite some local restrictions at state level and slower high frequency indicators in services in big cities, sentiment remained on a positive momentum.
  • The service index has recovered to the highs seen in 2018.

 

UK: PMI Manufacturing (Nov.): 55.2 vs 50.5 expected (prior: 53.7)

  • Sentiment has increased further over the month, contrary to expectations.
  • Despite weakening sentiment on new orders, momentum remained positive in manufacturing industry, with prospects of a vaccine production.

 

UK: PMI Services (Nov.): 45.8 vs 43 expected (prior: 51.4)

  • With renewed lockdown, sentiment has sharply decreased in services from the prior month, as these sectors were the most hit by restrictions; nevertheless, the index remained above expectations and was back to June or Feb. levels.

 

Switzerland: M3 (Oct.): 5.6% y/y vs 4.1% expected (prior: 4.2%)

  • M1 and M3 have strongly accelerated over the month, due to expanding liquidities.

 

Eurozone: PMI Manufacturing (Nov.): 53.6 vs 53.2 expected (prior: 54.8)

  • Sentiment has declined from the prior month, but less than expected.
  • According to preliminary data, sentiment has sharply declined in France (index at 49.1), while it has only modestly decreased in Germany, remaining relatively high (57.9).

 

Eurozone: PMI Services (Nov.): 41.3 vs 42 expected (prior: 46.9)

  • With restrictions and new lockdown, sentiment has significantly decreased in services.
  • According to preliminary data, sentiment has plunged back to low levels in France (index at 38 from 46.5); index has also decreased in Germany, but at a lower extend (from 49.5 to 46.2).

 

Poland: Retail sales (Oct.): 2.3% m/m vs 2.9% expected (prior: -1.8%)

  • Highly volatile data; the rebound was mainly driven by household goods, food and pharma products.
  • The yearly trend was negative, down by 2.5% y/y.
Market insight 20.11.2020

Firmer than expected UK retail sales

UK: GFK consumer confidence (Nov.): -33 vs -34 expected (prior: -31)

  • Consumers remained worried about economic conditions and sentiment has deteriorated over the month on present and future personal financial conditions.
  • The index remained above the lows seen in March (index at -37)

 

UK: Retail sales (Oct.): 1.2% m/m vs -0.3% expected (prior: 1.4% revised from 1.5%)

  • Sales were better than expected, driven by household goods, sales in non-specialized stores and by internet sales.
  • Pre-Christmas sales and inventory building in a lockdown environment have boosted sales; consequently, sales in Nov. should significantly fall.

 

Eurozone: Consumer confidence (Nov.): -17.6 vs -18 expected (prior: -15.5)

  • Consumer confidence has decreased slightly less than expected from the prior month, according to preliminary estimates.
  • The index plunged at -22 in March and rebounded to -14 in Sept.; with renewed lockdown, the index was back in the middle of this range; if lockdown lasts longer than expected, confidence and activity should decline further.

 

Germany: PPI (Oct.): 0.1% m/m as expected (prior: 0.4%)

  • Prices of energy and basic goods were up by 0.1 %m/m, while those of non-durable consumer goods were down by 0.2% m/m.
  • Yearly trend was just less negative, from -1% y/y the prior month to -0.7% y/y.

 

Italy: Industrial orders (Sept.): 3.2% m/m (prior: 5.8% revised from 6.1%)

  • Industrial sales were down by 3.2% m/m after 5.6% m/m the prior month.
  • Foreign orders were flat over the month, only domestic orders were up by 5% m/m.

 

Poland: Industrial production (Oct.): 3.2% m/m vs 2.5% expected (prior: 15.5%)

  • The pace of activity has globally slowed down over the month; activity remained sustained in mining and utility sectors, while it looked on moderate pace in manufacturing (up by 2.3% m/m after 17% m/m the prior month).

 

Turkey: Consumer confidence (Nov.): 80.1 (prior: 81.9)

  • Confidence has decreased over the month; the fall was broad-based on sub-components but driven by lower expectations on future economic activity.