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Market insight 18.10.2018

Eroding US Philly Fed; falling UKS retail sales

Eroding US Philly Fed; falling UKS retail sales

US: Philadelphia Fed. (Oct.): 22.2 vs 20 expected (prior: 22.9)

  • Sentiment has eased on current and future situation. On the short run, new orders eased and shipment increased; large swings in inventories and delivery from the past months suggest some disruption in the production chain.
  • Expectations have moderated, but remained high thanks to orders and shipments; opinions have moderated on capex and employment from already high level.
  • Despite this easing and some volatility, trend in activity looks positive.

 

US: Initial jobless claims (Oct.13): 210k vs 211k expected (prior: 215k revised from 214k)

  • Continuing claims: 1640 k vs 1663 k expected (1653 k past week).

 

UK: Retail sales (Sept.): -0.8% m/m vs -0.4% expected (prior: 0.5% revised from 0.3%)

  • Despite upwards revisions to past month data, the fall was larger than expected due to food sales.
  • Yearly trend has slowed down, but is still close to 3% y/y.

 

Switzerland: Trade balance (Sept.): 2.43 Bn CHF (prior: 2.08Bn)

  • Real exports: -0.8% m/m after -0.3% m/m; real imports: -0.4% m/m after -2.5% m/m.
  • Trade surplus has increased over the month, but trend has deteriorated on export performances.

 

Sweden: Unemployment rate (Sept.): 6.5% as expected (prior: 6.6%)

  • Unemployment stayed on a decreasing trend in place since June.


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Market insight 19.10.2018

US: decreasing trend in existing home sales

US: Existing home sales (Sept.): 5.15M vs 5.29M expected (prior: 5.33M revised from 5.34M)

  • Sales of single and multi-family houses have decreased from past month and remained on a weakening trend.
  • Prices of home sold stayed high, being up by 4.2% y/y (median prices); it takes a longer period of time to sold existing houses in the current environment.

 

Poland: Retail sales (Sept.): -3.4% m/m vs -1.3% expected (prior: 0.9%)

  • A broad based fall across sectors and a reversal after the rebound in the prior month. Yearly trend in volume terms has moderated from 6.7% y/y to 3.6% y/y.
Market insight 16.10.2018

A new record high in US job openings

US: Industrial production (Sept.): 0.3% m/m vs 0.2% expected (prior: 0.4%)

  • Manufacturing production has increased by 0.2% m/m after 0.3% m/m the prior month, driven higher by auto production and some equipment goods. The production in utility sector was down over the month.
  • Industrial activity was firmer in Q3 than in Q2, and the impact of hurricanes stayed modest.

 

US: NAHB housing market index (Oct.): 68 vs 66 expected (prior: 67)

  • Sentiment in housing has slightly increased on firmer sales.
  • This could point towards some stabilization after regular erosion since Jan.

 

US: JOLTS Job Openings (Aug.): 7136 vs 6900 expected (prior: 7077 revised from 6939)

  • Job openings stayed on an upward trend. The new acceleration in openings came from business services, education and health sectors. The turnover has also marginally increased.
  • Pressures on wages could remain in place in this environment.

 

UK: Unemployment rate (ILO) (Aug.): 4% as expected (prior: 4%)

  • Claimant count rate was also stable at 2.6%; nevertheless, jobless claims have increased from 14.2 k the prior month to 18.5 k.
  • Despite stable unemployment ratio, unemployed has turned more volatile and slightly on the rise.

 

UK: Average earnings incl. Bonus (Aug.): 2.7% y/y vs 2.6% expected (prior: 2.6%)

  • After a moderation in June, trend in wages is rising again, driven by rises in construction, retail and services.
  • This will fuel the BoE's tightening bias already in place; real wage growth has returned to positive territory.

 

Germany: Zew (Oct.): -24.7 vs -12 expected (prior: -10.6)

  • Expectations and views on current situation have plunged among financial community regarding Germany. This reflects rising concerns on trade and deteriorating domestic political situation.

 

Italy: Industrial orders (Aug.): 4.9% m/m (prior: -2.2% revised from -2.3%)

  • Foreign orders have strongly rebounded, while domestic orders were quite flat over the month. On a yearly basis, foreign orders also drive the trend (11% y/y), while domestic orders are depressed (-7.5% y/y).
  • Total sales were up by 1.2% m/m (driven by foreign sales), and up by 3% y/y.

 

Turkey: Industrial production (Aug.): -1.1% m/m vs -2.4% expected (prior: 3.5%)

  • Production has fallen less than expected, but trend across sectors is diverging.
  • Production in manufacturing was down by 1.5% m/m after the rebound seen in July (3.9% m/m). Yearly trend has moderated from 5.6% y/y in July to 1.7% y/y in Aug.
Market insight 17.10.2018

Lower UK inflation; US housing starts impacted by hurricanes

US: Housing starts (Sept.): 1201k vs 1210k expected (prior: 1268k revised from 1282k)

  • Building permits: 1241 k vs 1275 k expected (1249 k prior month).
  • The fall in building permits and housing starts has been driven by a collapse in multifamily houses. Building permits for single family have slightly rebounded over the month.
  • Hurricanes have affected Sept. data and should also impact the Oct. numbers; nevertheless, these two indicators have already shown a decreasing trend since Q2.

 

UK: CPI (Sept.): 0.1% m/m vs 0.3% expected (prior: 0.7%)

  • Inflation has eased from 2.7% y/y to 2.4% y/y, and core inflation from 2.1% y/y to 1.9% y/y.
  • A large decrease in transport costs (sea fares) and lower food inflation have moderated inflation despite a seasonal rebound in clothes.
  • These data remove existing pressure on BoE, but upside risks remain due to tight labor.

 

UK: PPI Input prices (Sept.): 1.3% m/m vs 0.8% expected (prior: 1.2% revised from 0.5%)

  • A large rebound in fuel prices. Input prices have reached 10.3% y/y after 9.4% y/y the prior month.

 

UK: PPI Output prices (Sept.): 0.4% m/m vs 0.2% expected (prior: 0.2%)

  • Oil prices were up, but at a lower magnitude than input prices; prices have increased from 2.9% y/y to 3.1% y/y.
  • Core output prices have shown a more moderate trend: 0.1% m/m, 2.4% y/y.

 

Eurozone: CPI (Sept.): 0.5% m/m as expected (prior: 0.2%)

  • The rebound in inflation has been confirmed in Sept., driven by gas, electricity and food prices; yearly trend was up from 2% y/y to 2.1% y/y; core inflation stayed stable at 0.9% y/y.

 

Poland: Industrial production (Sept.): 3.5% m/m vs 5.3% expected (prior: 0.8%)

  • Data are volatile and trend came at the bottom of the 3%-10% y/y range.

 

Russia: PPI (Sept.): 1.3% m/m vs 0.8% expected (prior: 0.2%)

  • Inflation has accelerated over the month after past fall of the currency and mining and manufacturing prices have rebounded.
  • Yearly trend has moderated from 15.3% y/y to 14.4% y/y.

 

Russia: Retail sales (Sept.): 2.2% y/y vs 2.4% expected (prior: 2.8%)

  • Trend has moderated further.

 

Russia: Unemployment rate (Sept.): 4.5% vs 4.7% expected (prior: 4.6%)

  • Unemployed stays on a declining trend.

 

Russia: Real wages (Sept.): 7.2% y/y vs 6.5% expected (prior: 6.8% revised from 7%)

  • Despite acceleration in wages, real disposable income has decreased further, being down by 1.5% y/y after -0.9% y/y.

 


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Market insight 22.10.2018

Swiss economy: a sustained growth trend for the most liquid monetary assets

Switzerland: M3 (Sept.): 2.3% y/y (prior: 2.5%)

  • While time and savings deposits continued to fall, currency in circulation was up by 6.2% y/y and sight deposits by 6% y/y.

 

Poland: M3 (Sept.): 0.8% m/m vs 0.5% expected (prior: 0.6%)

  • M3 growth has accelerated from 7.5% the prior month to 7.9% y/y. Credit to households and corporates was up by more than 5% y/y in both sectors.
Market insight 19.10.2018

US: decreasing trend in existing home sales

US: Existing home sales (Sept.): 5.15M vs 5.29M expected (prior: 5.33M revised from 5.34M)

  • Sales of single and multi-family houses have decreased from past month and remained on a weakening trend.
  • Prices of home sold stayed high, being up by 4.2% y/y (median prices); it takes a longer period of time to sold existing houses in the current environment.

 

Poland: Retail sales (Sept.): -3.4% m/m vs -1.3% expected (prior: 0.9%)

  • A broad based fall across sectors and a reversal after the rebound in the prior month. Yearly trend in volume terms has moderated from 6.7% y/y to 3.6% y/y.
Market insight 17.10.2018

Lower UK inflation; US housing starts impacted by hurricanes

US: Housing starts (Sept.): 1201k vs 1210k expected (prior: 1268k revised from 1282k)

  • Building permits: 1241 k vs 1275 k expected (1249 k prior month).
  • The fall in building permits and housing starts has been driven by a collapse in multifamily houses. Building permits for single family have slightly rebounded over the month.
  • Hurricanes have affected Sept. data and should also impact the Oct. numbers; nevertheless, these two indicators have already shown a decreasing trend since Q2.

 

UK: CPI (Sept.): 0.1% m/m vs 0.3% expected (prior: 0.7%)

  • Inflation has eased from 2.7% y/y to 2.4% y/y, and core inflation from 2.1% y/y to 1.9% y/y.
  • A large decrease in transport costs (sea fares) and lower food inflation have moderated inflation despite a seasonal rebound in clothes.
  • These data remove existing pressure on BoE, but upside risks remain due to tight labor.

 

UK: PPI Input prices (Sept.): 1.3% m/m vs 0.8% expected (prior: 1.2% revised from 0.5%)

  • A large rebound in fuel prices. Input prices have reached 10.3% y/y after 9.4% y/y the prior month.

 

UK: PPI Output prices (Sept.): 0.4% m/m vs 0.2% expected (prior: 0.2%)

  • Oil prices were up, but at a lower magnitude than input prices; prices have increased from 2.9% y/y to 3.1% y/y.
  • Core output prices have shown a more moderate trend: 0.1% m/m, 2.4% y/y.

 

Eurozone: CPI (Sept.): 0.5% m/m as expected (prior: 0.2%)

  • The rebound in inflation has been confirmed in Sept., driven by gas, electricity and food prices; yearly trend was up from 2% y/y to 2.1% y/y; core inflation stayed stable at 0.9% y/y.

 

Poland: Industrial production (Sept.): 3.5% m/m vs 5.3% expected (prior: 0.8%)

  • Data are volatile and trend came at the bottom of the 3%-10% y/y range.

 

Russia: PPI (Sept.): 1.3% m/m vs 0.8% expected (prior: 0.2%)

  • Inflation has accelerated over the month after past fall of the currency and mining and manufacturing prices have rebounded.
  • Yearly trend has moderated from 15.3% y/y to 14.4% y/y.

 

Russia: Retail sales (Sept.): 2.2% y/y vs 2.4% expected (prior: 2.8%)

  • Trend has moderated further.

 

Russia: Unemployment rate (Sept.): 4.5% vs 4.7% expected (prior: 4.6%)

  • Unemployed stays on a declining trend.

 

Russia: Real wages (Sept.): 7.2% y/y vs 6.5% expected (prior: 6.8% revised from 7%)

  • Despite acceleration in wages, real disposable income has decreased further, being down by 1.5% y/y after -0.9% y/y.