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Daily Macroeconomic Digest

vendredi 03 juillet
Rebounding business confidence in services (PMI) in Europe


Eurozone: PMI Services (June): 48.3 vs 47.3 expected (prior: 30.5)

  • Sentiment has significantly rebounded in all major countries from the prior month.
  • Index was back above 50 in France and Spain from depressed levels; only PMI services in Italy was slightly below expectations, but the index has nevertheless rebounded from 28.9 to 46.4.
  • Business sentiment has strongly regained in both manufacturing and service sectors, paving the way to rebuilding momentum in domestic activity in Q3.


UK: GFK consumer confidence (June): -27 vs -29 expected (prior: -30)

  • Confidence has slightly regained from the prior month. Opinions on future economic situation remained depressed.
  • The index remained close to the 2012 low levels.


UK: PMI Services (June): 47.1 vs 47 expected (prior: 29)

  • With progressive reopening of the economy, sentiment has continued to regain, and the index was coming back closer to 50.


Turkey: CPI (June): 1.13% m/m vs 0.6% expected (prior: 1.36%)

  • Despite falling prices in food, prices have accelerated significantly over the month on clothes, communication, transport and leisure. Core inflation was up by 2.1% m/m.
  • Headline inflation has accelerated from 11.39% y//y the prior month to 12.62% y/y and core inflation from 10.32% y/y to 11.64% y/y.


jeudi 02 juillet
US: better than expected non-farm payrolls in June

US: Non-farm payrolls (June): 4800k vs 3230k expected (prior: 2699k revised from 2506k)

  • The unemployment rate has come back from13.26% to 11.09% (12.5% expected).
  • Past month payrolls data were also revised up; largest job creations were seen in services (4.26 M after 2.54 M past month), driven as the prior month by leisure, education-health and business services; payrolls were also sustained in the manufacturing sector (504 k after 684 k the prior month).
  • Wage growth was down by 1.2% m/m (5% y/y), but data are distorted by current situation and did not reveal any new trend.
  • Other alternative unemployment rates were also on a downward trend (U6 – reflecting involuntary unemployment, was down from 21.2% to 18%).
  • End of lockdown and resuming activity has refueled hiring in services; but with rising COVID cases in some States, downside risks on employment could be refueled in services (leisure-hospitality) in these States if the end of the lockdown is reversed.


US: Initial jobless claims (June 27): 1427k vs 1350k expected (prior: 1482k revised from 1480k)

  • Continuing claims: 19 290 k after 19 231 k past week.
  • Weekly data were less positive than payrolls, as the rebound in COVID cases has impacted labor and fueled unemployment benefits at a high level.


US: Trade balance (May): -54.6 bn USD vs -53.2 bn expected (prior: -49.8 bn revised from -49.4 bn)

  • Trade deficit has increased as exports were down by 4.4% m/m and imports down by 0.9% m/m.


US: Factory orders (May): 8% m/m vs 8.6% expected (prior: -13.5% revised from -13%)

  • A strong rebound in orders on defense and transport; orders for capital goods non-defense ex aircraft were up by 1.6% m/m after -6.6% m/m the prior month.
  • Total shipments were up by 3.1% m/m and inventories up by 0.2% m/m.


Switzerland: CPI (June): 0% m/m vs 0.1% expected (prior: 0%)

  • Energy and food prices were up over the month, while prices of clothes and other durable goods were down; core inflation was down by 0.1% m/m.
  • Inflation remained on a negative trend: -0.7% y/y for headline, -0.1% y/y on core inflation (0.1% y/y the prior month).


Eurozone: PPI (May): -0.6% m/m vs -0.4% expected (prior: -2%)

  • Prices of energy and intermediary goods stayed negative over the month, while prices in other sectors have stabilized.
  • Yearly trend has deteriorated further, from -4.5% y/y to -5% y/y (-0.6% y/y ex energy).


Eurozone: Unemployment rate (May): 7.4% vs 7.7% expected (prior: 7.3%)

  • Unemployed has increased less than forecasted, but trend is still rising.


Italy: Unemployment rate (May): 7.8% vs 7.9% expected (prior: 6.6% revised from 6.3%)

  • After initial decrease the prior month, unemployed has strongly rebounded over the month.


mercredi 01 juillet
Strong rebound in PMI-ISM manufacturing

US: ADP Employment change (June): 2369k vs 2900k expected (prior: 3065k revised from -2760k)

  • Job creations were below expectations, while past month data were strongly revised up.
  • Trend was driven by resuming activity in services, with a rebound in jobs in leisure, health and trade/transport sectors. Creations were also sustained over the past two months in the construction sector.


US: Markit Manufacturing PMI (June): 49.8 vs 49.6 expected (prior: 39.8)

  • Final index is better than expected and just below the 50 level. Sentiment on new orders and production has improved from past month.


US: ISM Manufacturing (June): 52.6 vs 49.8 expected (prior: 43.1)

  • A strong rebound of sentiment on production and new orders; the two related indices were back above 50 (57.3 and 56.4 respectively), reflecting the effects of the end of the lockdown.
  • Sentiment on other components and particularly on exports, backlog of orders and employment have all improved from the prior month, but indices remained well below 50.
  • Activity is on a recovery trend at the end of Q2, paving the way to a return to growth if new COVID cases in some states do not oblige to renewed lockdown.


US: Construction spending (May): -2.1% m/m vs 1% expected (prior: -3.5% revised from -2.9%)

  • During the lockdown, activity has declined in construction.


Eurozone: PMI Manufacturing (June): 47.4 vs 46.9 expected (prior: 39.4)

  • Final business sentiment was more positive than initially estimated and has significantly and rapidly rebounded from depressed levels.
  • Sentiment has rebounded in all major countries: the index has passed above 50 in France (52.3), and the rebound was strong in Germany (from 36.6 to 45.2) and in Spain (from 38.3 to 49). Sentiment in Italy was slightly lower than expected and the rebound from the prior month was limited.
  • Sentiment on production (notably for consumer goods) and orders was less depressed than past months, while export orders remained weak.
  • A regaining momentum in industry is under way entering Q3.


Germany: Retail sales (May): 13.9% m/m vs 3.5% expected (prior: -6.5% revised from -5.3%)

  • A strong rebound in all sectors (particularly for clothes, IT goods and furniture) after sharp decline the prior month.


Germany: Unemployment rate (June): 6.4% vs 6.5% expected (prior: 6.3%)

  • Unemployed has increased by 69 k (120 k expected after 237 k the prior month).
  • Unemployment has moderated from the prior month, but the trend is still rising even at slower pace.


Poland: PMI Manufacturing (June): 47.2 vs 46.1 expected (prior: 40.6)

  • With progressive end of the lockdown, the sentiment on production and orders has strongly rebounded.


UK: Nationwide house prices (June): -1.4% m/m vs -0.6% expected (prior: -1.7%)

  • Yearly trend was negative: -0.1% y/y after 1.8% y/y the prior month.


UK: PMI Manufacturing (June): 50.1 as expected (prior: 40.7)

  • While sentiment remained depressed on exports, it has rebounded to growth territory on production.


Switzerland: PMI Manufacturing (June): 41.9 vs 48 expected (prior: 42.1)

  • Sentiment has slightly increased on production and orders but eased on supply delivery.


Russia: PMI Manufacturing (June): 49.4 vs 45 expected (prior: 36.2)

  • A rebuilding momentum in production and orders.


Turkey: PMI Manufacturing (June): 53.9 (prior: 40.9)

  • Sentiment on new orders has strongly rebounded and the index has passed above 50 (at 53.2).


mardi 30 juin
US: strong rebound in consumer confidence, but modest increase in Chicago MNI-PMI

US: S&P CoreLogic CS 20-City (April): 3.98% y/y vs 3.8% expected (prior: 3.91% revised from 3.92%)

  • Monthly and yearly trend remained positive in aggregated house prices.


US: Chicago MNI (ex PMI - June): 36.6 vs 45 expected (prior: 32.3)

  • Despite some rebound in activity, sentiment has improved less than expected.


US: Consumer confidence (CB) (June): 98.1 vs 91.5 expected (prior: 85.9 revised from 86.6)

  • Sentiment has increased from past month; opinions on current situation have rebounded but remained well below March level. The rebound was mainly driven by improving current conditions on the labor market.
  • Expectations have rebounded, coming closer to their Feb. level, thanks to improving 6-month views on future activity and employment.
  • Willingness to buy large items has strongly rebounded for autos and houses coming closer or even slightly above the level seen in Q1-20.


UK: GDP (Q1 20): -2.2% q/q vs -2% expected (prior: 0%)

  • Final data have pointed towards slightly sharper decline in Q1 than initially estimated.
  • All major sectors have shown sharp contraction; exports were down by 13.5% q/q (with negative net exports contribution), consumption down by 2.5% q/q and investment down by just 1.1% q/q.
  • By sector, the largest fall was seen in utility, leisure, hotels and public sectors.
  • Q2 is expected to show double digit contraction and the 2020 yearly recession should be close to 8%y/y.


Switzerland: KOF (June): 59.4 vs 77 expected (prior: 49.6 revised from 53.2)

  • Business sentiment stayed relatively depressed and below expectations.


Eurozone: CPI estimate (June): 0.3% y/y vs 0.2% expected (prior: 0.1%)

  • Inflation is expected to regain after past month lows; core inflation is expected to slightly ease from 0.9% y/y to 0.8% y/y.


France: CPI (June): -0.1% m/m vs 0.3% expected (prior: 0.2%)

  • Preliminary inflation has pointed to further decline, contrary to expectations. While energy prices have rebounded over the month (1.8% m/m), fresh food prices have sharply declined (-5.4% m/m).
  • Trend has declined further from 0.4% y/y the prior month to 0.1% y/y.


France: Consumer spending (May): 36.6% m/m vs 30% expected (prior: -19.1% revised from -20.2%)

  • Sales of autos, durable goods and clothes have strongly rebounded over the month after two-month decline. In absolute terms, consumption remained well below its February levels (-7%), but this rebound looks positive for potential Q3 rebound and limited fall in Q2.


France: Producer Prices (May): -0.1% m/m (prior: -2.9%)

  • PPIs remained in negative trend, but less severe than in the prior month (-4.1% y/y after -4.5% y/y) due to a rebound in energy prices.


Italy: PPI (May): -0.3% m/m (prior: -3.5% revised from -3.4%)

  • PPIs remained in negative trend (-5.1% y/y after -5.3% y/y the prior month).


Italy: CPI (June): 0% m/m vs 0.1% expected (prior: -0.3% revised from -0.2%)

  • Food prices have turned negative over the month and energy and leisure prices have rebounded.
  • Yearly trend remained negative: -0.4% y/y after -0.3% y/y the prior month.


Poland: CPI (June): 0.7% m/m vs 0.3% expected (prior: -0.2%)

  • Food prices have slightly declined over the month, but energy prices have strongly rebounded (+5.4% m/m).


Brazil: Unemployment rate (May): 12.9% vs 13.1% expected (prior: 12.6%)



lundi 29 juin
Sharp rebound in US pending home sales

US: Pending home sales (May): 44.3% m/m vs 19.3% expected (prior: -21.8%)

  • Following a 21.8% drop in April, pending home sales rebounded sharply in May (+44.3% m/m; -10.4% y/y) in all US regions, including a 56.2% monthly jump in the West and a 43.3% gain in the South.
  • However, even with the outsize advance, the index SA (current level: 99.6) is below the pre-pandemic high of 111.4, reached in February.


UK: M4 (May): 11.9% y/y (prior: 9.5%)

  • While monetary aggregates have accelerated further, lending growth remained on stable but sustained trend (6.8% y/y).


Eurozone: Industrial confidence (June): -21.7 vs -19.7 expected (prior: -27.5)

  • Sentiment has modestly improved from the prior month; views on future production have improved with the end of the lockdown but sentiment on orders and exports remained depressed and even decreased further.
  • Finally, sentiment on employment was just less depressed than past month.


Eurozone: Consumer confidence (June): -14.7 (prior: -18.8)

  • Sentiment has slightly regained, mainly on future economic situation and employment, but unemployment remained an important concern.


Eurozone: Service confidence (June): -35.6 vs -25.4 expected (prior: -43.6)

  • Sentiment has regained, driven by prospects of the end of the lockdown and rising future demand; nevertheless, views on future activity remained low.


Germany: CPI (June): 0.7% m/m vs 0.4% expected (prior: 0%)

  • Preliminary data pointed to a rebound in inflation trend, from 0.5% y/y to 0.8% y/y.


Spain: CPI (June): 0.4% m/m as expected (prior: 0.1%)

  • Estimate for inflation has pointed towards a rebound, from -0.9% y/y to -0.3% y/y.


Brazil: CPI (June): 1.56% m/m vs 1.5% expected (prior: 0.28%)

  • Proxy for global inflation (production prices, consumer prices and construction costs) has rebounded on rising producer prices on raw materials.
  • At consumer level, prices have stabilized (0.04% m/m after -0.6% m/m): except food prices, leisure and household goods prices remained under contraction over the month. Trend in consumer prices has slightly regained from 1.6% y/y the prior month to 1.76% y/y.
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