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Daily Macroeconomic Digest

venerdì 14 agosto
US: rising July retail sales, but at a slower pace than expected

US: Retail sales (July): 1.2% m/m vs 2.1% expected (prior: 8.4% revised from 7.5%)

  • Prior month data were revised up, while July data came slower than expected.
  • Several sectors have shown a still sustained growth pace, even slightly slower than the prior month: electronics, health, clothes, eating and gasoline.
  • On the opposite, some pullback was seen in sales for: building materials, auto parts and sport.
  • Sales ex building materials, autos and gasoline were up by 1.4% m/m (more than expected at 0.8% m/m), after 6% m/m the prior month (10.4% m/m in May).
  • More sector rotation in sales and still decent growth, but some slowdown in its pace: without renewed labor support, it will probably be difficult to remain on a sustained consumption trend.


US: Industrial production (July): 3% m/m as expected (prior: 5.7% revised from 5.4%)

  • Another third month of strong rebound in auto production and rising momentum in utility.
  • Production in business equipment and material sectors has increased but at a slower pace than in the prior month.
  • Momentum remained positive, but with some slowdown in the pace; global activity in the US relies a lot on consumption and related sectors such as autos, meaning than any meaningful slowdown would put total recovery under risky challenges.


US: Consumer confidence (Michigan) (Aug.): 72.8 vs 72 expected (prior: 72.5)

  • Sentiment has regained after past month fall and was slightly better than expected; the index remained below the June and the March level.
  • Sentiment on current conditions has eased for the second month (but less than expected). Expectations have slightly regained after past month fall.
  • Details of the index give mixed picture with small rise in concerns on personal financial situation, eroding sentiment on current and future economic situation, changes in rating on current government policy.
  • Willingness to buy autos has eroded but demand remained stable on houses.
  • Preliminary consumer confidence was more constructive, but details revealed some fragilities that could reverse or improve further during the month and influence the final index.


US: Nonfarm productivity (Q2-20): 7.3% q/q vs 1.5% expected (prior: -0.3% revised from -0.9%)

  • Large swings in productivity and unit labor costs (up by 12.2% q/q after 98% q/q) over the quarter; despite the fall in output (-39% q/q), the fall in employee hours was greater (-43% q/q).


US: Business inventories (June): -1.1% m/m as expected (prior: -2.3%)

  • Inventories have strongly decreased for autos and retailers, but they increased for other manufacturers.
  • Sales were strongly up for the second month (8.5% m/m).
  • The inventory/sales ratio has declined from another month and was back to level seen in Feb.-Jan. (at 1.37).


Switzerland: PPI-import prices (July): 0.1% m/m (prior: 0.5%)

  • Import prices were up by 0.5% m/m and production prices up by % m/m.
  • Yearly trend was less negative, from -3.5% y/y the prior month to -3.3%y/y.


France: CPI (July): 0.4% m/m as expected (prior: 0.1%)

  • Final data confirmed rebound in prices, mainly due to energy and transport costs, while food prices eased over the month.
  • The yearly trend has rebounded from 0.2% y/y the prior month to 0.9% y/y.


Turkey: Industrial production (June): 17.6% m/m vs 4.7% expected (prior: 18% revised from 14.7%)

  • Second month of strong rebound in industrial activity in all sectors.
  • Production has turned back positive on yearly trend at 0.1% y/y after -19.4% y/y the prior month.


Turkey: Current account (June): -2.9bn USD (prior: -3.8bn)

  • Trade deficit has moderated over the month, thanks to firmer rebound in exports,
  • After interventions in markets, official reserves declined by7.7 bn over the month.


giovedì 13 agosto
US: better than expected weekly jobless claims

US: Initial jobless claims (Aug.8): 963k vs 1100k expected (prior: 1191k revised from 1186k)

  • Continuing claims: 15 486 k after 16 090 k the prior week.
  • Jobless claims have improved further and passed below 1 million.
  • After fears of a renewed deterioration in July, labor trend has regained and data have improved on parallel with latest non-farm payrolls.


US: Import price index (July): 0.7% m/m vs 0.6% expected (prior: 1.4%)

  • Prices of imported goods remained on sustained trend, particularly oil (7.8% m/m) and industrial supplies (3.1% m/m).
  • Export prices were up by 0.8% m/m (1.2% m/m the prior month).
  • Import prices were less negative on a yearly basis (from -3.9% y/y the prior month to -3.3% y/y).


UK: RICS house price balance (July): 12% vs -5% expected (prior: -13% revised from -15%)

  • Sentiment has sharply rebounded on prices and future sales.
  • The index was back to the range seen in Q1-20


France: Unemployment rate (Q2-20): 7.1% vs 8.3% expected (prior: 7.8%)

  • Supports to labor have maintained unemployment at a low level but the unemployment ratio is expected to rise in H2-20 despite ongoing public supports with labor force adjustments in corporates.


Germany: CPI (July): -0.5% m/m as expected (prior: 0.6%)

  • Cuts in VAT tax has led to global decline in prices in all sectors; yearly trend declined from 0.8% y/y the prior month to 0% y/y. Core inflation was down by 0.5% m/m and declined from 1.3% y/y the prior month to 0.7% y/y.


Spain: CPI (July): -1.6% m/m as expected (prior: 0.4%)

  • While energy-transport prices were up over the month, prices of food, clothes (-20% m/m), hotels-leisure and communication were down over the month.
  • Headline inflation has declined further, from -0.3% y/y the prior month to -0.7% y/y. Core inflation has eased from 1% y/y the prior month to 0.6% y/y.
mercoledì 12 agosto
US: earlier than expected normalization in inflation pattern

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.
martedì 11 agosto
US: weakening sentiment among small-medium sized firms and firmer PPI due to energy prices

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.


lunedì 10 agosto
US: strong June job openings

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%.
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Analisi 31.07.2020

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