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Daily Macroeconomic Digest

venerdì 14 giugno
Solid US activity data

US: Consumer confidence (Michigan) (June Prel.): 97.9 vs 98.0 expected (prior: 100.0)

  • Current conditions: 112.5 vs 109.0 expected (prior: 110.0)

  • Expectations: 88.6 vs 92.0 expected (prior: 93.5)

  • The escalation of trade tensions and slower gains in employment unsurprisingly weighed slightly on consumer sentiment, but it remains at high levels, which should continue to support consumption.

  • Inflation expectations continued to decline.


US: Industrial production (May): 0.4% m/m vs 0.2% expected (prior: -0.4% revised from -0.5%)

  • The rebound was led by motor vehicle (+2.4% m/m), utilities (+2.1% m/m) and mining (+0.1%).

  • However, business sentiment in the manufacturing sector, the overall global environment and inventory overhang suggests the industrial production remains in a soft patch.


US: Retail sales (May): 0.5% m/m vs 0.6% expected (prior: 0.3% revised from -0.2%)

  • Ex auto & gasoline: 0.5% m/m vs 0.4% expected (prior: 0.3% revised from -0.2%)

  • The fact that most discretionary categories of sales posted strong gains (like sales at food services and drinking places, which rose by 0.7% m/m or autos up 0.7% m/m) reflects the very elevated consumer confidence. Non-store retail sales (mostly online) jumped by 1.4% m/m, lifting its y/y change to 11.4% from 9.9%.

  • Following the sizable upward revision for April, the 10.9% annualized increase in retail sales over the last three months is the strongest since November 2017, which will lead to (possibly significant) upward revisions to Q2 GDP growth forecasts.


France: CPI (May F.): 0.1% m/m vs 0.2% expected (prior: 0.2%)

  • CPI y/y: 1.1% as expected (prior: 1.5%)

  • The monthly increase has been revised down from the flash estimate to 0.1% (vs 0.2%), but the y/y rate is unchanged at 1.1% (lowest since September 2017).


Russia: central bank cut rate by 25bp to 7.50%, as expected

  • The cut was widely expected (because of soft inflation and weak demand) but the central bank sent a stronger-than-expected signal of another reduction in the short term (at an "upcoming" meeting).


giovedì 13 giugno
US: volatile and rising jobless claims; weak industrial activity in the eurozone

US: Initial jobless claims (June 8): 222k vs 215k expected (prior: 219k revised from 218k)

  • Continuing claims: 1695 k after 1693 k past week.


US: Import price index (May): -0.3% m/m vs -0.2% expected (prior: 0.1% revised from 0.2%)

  • Lower oil prices and strong USD have driven import prices lower; in parallel, export prices have also declined by 0.2% m/m after 0.1% m/m past month.


UK: RICS house price balance (May): -10% vs -21% expected (prior: -22% revised from -23%)

  • Balance of sentiment in housing has improved, contrary to expectations; views on prices, sales and new buyers have improved from past month.


Sweden: Unemployment rate (May): 3.4% (prior: 3.5%)

  • An improving trend remained in place.


Eurozone: Industrial production (Apr.): -0.5% m/m as expected (prior: -0.4% revised from -0.3%)

  • Despite a rebound in energy production, activity remained in contraction in all other sectors.

  • The yearly trend remained in negative territory: -0.4% y/y after -0.7% y/y past month.


Germany: CPI (May): 0.3% m/m as expected (prior: 1.0%)

  • Prices of clothes and for communication have declined and they have moderated in other sectors.

  • The yearly trend has declined from 2.1% y/y to 1.3% y/y.


Italy: Unemployment rate (Q1-19): 10.4% as expected (prior: 10.6%)

  • After a rebound in Q4, employment has recovered on a positive even moderate trend.

mercoledì 12 giugno
US: a moderate inflation and yearly change just below 2% y/y

US: CPI (May): 0.1% m/m as expected (prior: 0.3%)

  • Inflation has moderated on lower energy prices, and related sectors such as transport, and lower prices for computers. Core inflation was also moderate, up by 0.1% m/m, as prices of services have also moderated (0.1% m/m after 0.3% m/m).

  • Yearly trend has moderated from 2% y/y to 1.8% y/y, and for core inflation from 2.1% y/y to 2% y/y.

  • A large part of the change in inflation is related to energy, which will probably not really change the Fed's view on a transitory moderation in inflation.


Spain: CPI (May): 0.2% m/m as expected (prior: 1.0%)

  • Inflation has been confirmed on a slower pace; yearly trend has decreased from 1.6% y/y to 0.9% y/y.


Brazil: Retail sales (Apr.): 0% m/m vs 0.3% expected (prior: 1.1%)

  • Sales including autos were flat, but down by 0.6% m/m ex autos, due to reversal on clothes and communication items.

  • Yearly trend (broad sales) has turned mildly positive, up by 1.7% y/y after a large fall in the prior month (-3.4% y/y).

martedì 11 giugno
US: rising optimism among small firms

US: NFIB Small Business optimism (May): 105 vs 102 expected (prior: 103.5)

  • Contrary to expectations, sentiment among small firms has increased, driven up by higher sales, better economy and increased capex and compensation.

  • The index has recovered to the levels seen in past Oct. 18, with constructive view on the business cycle.


US: PPI (May): 0.1% m/m as expected (prior: 0.2%)

  • Inflation has eased on food, energy, while it was firmer in services, due to prices for warehouses and transport. Core PPIs were up by 0.4% m/m.

  • Inflation trend in PPI has moderated from 2.2% y/y to 1.8% y/y; in PPI ex food-energy and trade were slightly firmer from 2.2% y/y to 2.3% y/y.


UK: Unemployment rate (ILO) (Apr.): 3.8% as expected (prior: 3.8%)

  • Claimant count: 3.1% after 3% past month; the ratio is on a regular rising trend.

  • Growth in employment is mainly coming from the self-employed sector.


UK: Average earnings incl. Bonus (Apr.): 3.1% y/y vs 3.0% expected (prior: 3.3%)

  • Wages ex bonuses were up by 3.4% y/y after 3.3% y/y the prior month.

  • Wages in the construction sector was the most buoyant, up by 4.4% y/y; yearly trend in wages remained firm.


Norway: CPI (May): -0.3% m/m vs 0.1% expected (prior: 0.4%)

  • Yearly trend in inflation has moderated from 2.9% y/y to 2.5% y/y; underlying trend has eased from 2.6% y/y to 2.3% y/y.


France: Business sentiment (Bank of France) (May): 99 vs 100 expected (prior: 99)

  • Index was stable, but sentiment on orders and production has slightly increased from past month.

  • Separately, sentiment was also stable in services and in construction.

venerdì 07 giugno
Weak US employment report

US: Non-farm payrolls (May): 75k vs 175k expected (prior: 224k revised from 263k)

  • Soft increase which contrasts with other labor market indicators (jobless claims, consumer confidence in job-finding prospects, hiring intention in business surveys) indicating a more robust performance.

  • Weak hiring continued in the manufacturing sector that added only 3k jobs.

  • This report (including 75k downward revisions for the previous two months) suggests some weakening momentum in the labor market, which appears to be broad-based across sectors.

  • Even though monthly job growth of around 100k is sufficient to keep the unemployment rate at 3.6%, today's data will boost expectations for a Fed rate cut.


US: Unemployment rate (May): 3.6% as expected (prior: 3.6%)

  • The U6 underemployment rate declined by two tenths to a new cyclical low of 7.1%, reflecting a decline in workers with a part-time job for economic reasons.


US: Average hourly earnings (May): 0.2% m/m vs 0.3% expected (prior: 0.2%)

  • Y/y: 3.1% vs 3.2% expected (prior: 3.2%)

  • The yearly change fell to the lowest level since last September.


Germany: Industrial production (April): -1.9% m/m vs -0.5% expected (prior: 0.5%)

  • IP y/y: -1.8% vs -0.4% expected (prior: -0.9%)

  • Sharp decline with broad-based weakness across sectors, but these data can be very volatile around Easter.


Germany: Trade Balance (April): 17.9bn EUR vs 19.5bn expected (prior: 22.6bn revised from 22.7bn)

  • Exports: -3.7% m/m vs -0.9% expected (prior: 1.6%)

  • Imports: -1.3% m/m vs -0.2% expected (prior: 0.7%)

  • Sharp decline with the same caveat as for industrial production.


France: Industrial production (April): 0.4% m/m vs 0.3% expected (prior: -1.1% revised from -0.9%)

  • IP y/y: 1.1% vs 1.0% expected (prior: -0.7% revised from -0.9%)

  • The rebound was led by consumer goods and energy production.


Switzerland: Unemployment rate (sa) (May): 2.4% as expected (prior: 2.4%)

  • Unchanged for the 7th consecutive month.

Macro economic

The Chief Economist's weekly update

To help you navigate through the economic news, here is a summary of last week’s main events and what to look out for next week.

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Analisi 12.06.2019

Navigating through an ageing economic cycle

A market backdrop favourable to convertible bonds