Market insight

 

US: Non-farm payrolls (Nov.): 210k vs 550k expected (prior: 546k revised from 531k)

• Well below expectations with a slowdown relative to October in almost all sectors.
• On the positive side, prior-month payroll growth was revised higher for the seventh consecutive time (two-month net revision of +82k).
• This disappointing figure should be taken with a grain of salt as it may have been influenced by some technical factors. Moreover, this sharp slowdown goes strongly against the signals given by the other survey (cf below) and the rebound in the employment component of the ISM Service (cf below).

US: Unemployment rate (Nov.): 4.2% vs 4.5% expected (prior: 4.6%)

• Reassuringly, contrary to the payroll survey, the household survey showed very strong job gains (+1.1mn), which led to a significant decline in the unemployment rate despite a welcome rebound in labor force participation (+0.2 pp to 61.8%).

US: Average hourly earnings (Nov.): 0.3% m/m vs 0.4% expected (prior: 0.4%)

• Y/y: 4.8% vs 5.0% expected (prior: 4.8% revised from 4.9%)
• Slowest monthly increase since March, which is consistent with the gradual easing in labor supply constraints.

 

US: ISM Non manufacturing (Nov.): 69.1 vs 65.0 expected (prior: 66.7)

• The headline index reached a new all-time high in November with the employment sub-index up 4.9 points to 56.5.
• This suggests that economic activity remains strong despite the recent rebound in Covid cases.

 

US: Factory orders (Oct.): 1.0% m/m vs 0.5% expected (prior: 0.2%)

• Ex transportation: 1.6% m/m vs 0.6% expected (prior: 1.1% revised from 0.7%)

 

France: Industrial production (Oct.): 0.9% m/m vs 0.6% expected (prior: -1.5% revised from -1.3%)

• Production has rebounded thanks to auto-transport, food and electricity sectors.
• Disruption still exists but activity has turned more volatile on different sectors due to momentum in demand and intensity of the constraints.

 

Eurozone: PMI Services (Nov.): 55.9 vs 56.6 expected (prior: 54.6)

• Sentiment has increased from the prior month, but slightly less than in the first estimates.
• Indices increased in all countries, particularly in Spain and Italy from the prior month. But the polls were made before negative news related to delta-omicron virus.
• Sentiment has improved thanks to higher demand, marginally higher exports, rising employment but also ongoing rise in costs and prices; pressures on activity remained due to disruption and shortages as seen in the manufacturing sector.

 

UK: PMI Services (Nov.): 58.5 vs 58.6 expected (prior: 59.1)

• Despite rising new demand from businesses and consumers, activity was constrained by shortages and disruption.
• Employment remained on the rise but constrained by shortage; costs and prices remained on the rise.

 

Norway: Unemployment rate (Nov.): 2.1% (prior: 2.2%)

• Unemployment ratio remained on a regular downside trend.

 

Turkey: PPI (Nov.): 9.99% m/m vs 6%$ expected (prior: 5.24%$)

• Prices have increased more than expected; yearly trend has increased from 46.31 % y/y the prior month to 54.62% y/y.

Turkey: CPI (Nov.): 3.51% m/m vs 3% expected (prior: 2.39%)

• Prices have accelerated further for food, housing, transport and leisure sectors over the month.
• Yearly trend has accelerated further, from 19.89% y/y the prior month to 21.31% y/y and core inflation from 16.82% y/y to 17.62% y/y.

US: Initial jobless claims (Nov 27): 222k vs 240k expected (prior: 194k revised from 199k)

• Slightly higher from the lowest reading in about 50 years, which was most probably exaggerated by the difficult seasonal adjustments around the Thanksgiving holiday.
• Labor supply will remain a key concern for US companies, which may be intensified by the omicron variant.

 

Eurozone: PPI (Oct.): 5.4% m/m vs 3.8% expected (prior: 2.8% revised from 2.7%)

• PPI y/y: 21.9% vs 19.0% (prior: 16.1%)
• Well above expectations, to new all-time highs both on a monthly and annual basis.

 

Eurozone: Unemployment rate (Oct.): 7.3% as expected (prior: 7.4%)

• A step further towards the pre-pandemic level, which stood at a multi-decade low of 7.1%.

 

Switzerland: Adjusted retail sales (Oct.): 1.2% y/y (prior: 2.6% revised from 2.5%)

• Real retail sales rose 0.7% m/m after +0.1% in September.

US: ADP Employment change (Nov.): 534k vs 525k expected (prior: 570k revised from 571k)

• Jobs creations remained sustained in both manufacturing and service sectors.
• Within services, creations were driven by leisure-hospitality, business services and trade-retail sectors.
• This bodes well for the next payrolls to be published by next Friday (548 k expected).

 

US: Markit Manufacturing PMI (Nov.): 58.3 vs 59.1 expected (prior: 58.4)

• Confidence has marginally declined contrary to expectations; despite modest improvement in production and new orders, disruption and bottlenecks continued to weigh down on sentiment; as a result new export orders have marginally increased, while prices remained on the rise, but ability to pass through higher prices has eased from the prior month.

 

US: Construction spending (Oct.): 0.2% m/m vs 0.4% expected (prior: -0.1% revised from -0.5%)

• Residential construction was down by 0.5% m/m after -0.3% m/m the prior month, while non-residential construction was up by 0.9% m/m after flat prior month.

 

US: ISM Manufacturing (Nov.): 61.1 vs 61.2 expected (prior: 60.8)

• Sentiment remained resilient and has slightly increased from the prior month.
• Opinions have improved on production, new orders and employment; on the opposite, pressures have eased on prices, supply delivery but new export orders have moderated (probably reflecting modest Chinese demand).
• Large firms (in the ISM index) seemed to have benefited from still resilient and more  positive environment while small and domestic firms (more represented in the PMI index) were still facing constraints; but level of activity in both cases remained positive.

 

UK: Nationwide house prices (Nov.): 0.9% m/m vs 0.4% expected (prior: 0.7%)

• Prices remained on a sustained trend; prices were up by 10% y/y after 9.9% y/y the prior month.

 

UK: PMI Manufacturing (Nov.): 58.1 vs 58.2 expected (prior: 57.8)

• Sentiment has improved from the prior month; opinions were more positive on production, due to rising domestic demand and the rebuilt of inventories; views have improved on orders, employment but prices remained on the rise.
• Opinions on exports have declined due to constraints related to Brexit and slower Chinese demand.

 

Switzerland: CPI (Nov.): 0% m/m vs -0.1% expected (prior: 0.3%)

• Prices were up for clothes, energy and transport, but declined over the month on food, restaurants and globally services.
• Core inflation was up by 0.1% m/m after 0.3% m/m the prior month.
• Yearly trend has accelerated from 1.2% y/y prior month to 1.5% y/y, and core inflation from 0.9% y/y to 1.1% y/y.

 

Switzerland: PMI Manufacturing (Nov.): 62.5 vs 64.2 expected (prior: 65.4)

• Sentiment has declined but remained close to the highs seen in 2017-2018.
• Opinions have decreased on production, orders, employment and also on prices, while inventories were in a rebuilding process.

 

Sweden: PMI Manufacturing (Nov.): 63.3 vs 63 expected (prior: 64.2 revised from 64.4)

• Business sentiment has decreased from the prior month; while views have increased on domestic orders, they declined for exports, total orders and also on prices.

 

Norway: PMI (Nov.): 63.7 vs 58 expected (prior: 58.8 revised from 58.5)

• A strong rebound in production has driven the index higher over the month.

 

Eurozone: PMI Manufacturing (Nov.): 58.4 vs 58.6 expected (prior: 58.3)

• Final data has pointed towards quite stable sentiment from the prior month, but this has masked wider disparities across countries.
• Sentiment has strongly rebounded in Italy, and increased in France, while it has marginally eased in Germany and declined in Spain.
• Opinions have increased on production, employment and prices, but decreased on new orders, related to disruption in different sectors.

 

Germany: Retail sales (Oct.): -0.3% m/m vs 0.9% expected (prior: -1.9% revised from -2.5%)

• Sales were more depressed than expected over the month, despite a strong rebound in purchases of clothes and pharma products.
• Renewed restrictions and fears about virus could weigh down on both confidence and purchases in Q4-21.

 

Poland: PMI Manufacturing (Nov.): 54.4 vs 53.9 expected (prior: 53.8)

• New orders have increased over the month.

 

Brazil: PMI Manufacturing (Nov.): 49.8 (prior: 51.7)

• A decline below 50 due to weakening new orders.

 

Turkey: PMI Manufacturing (Nov.): 52 (prior: 51.7)

• Business sentiment has increased from the prior month, but sentiment on new orders has weakened while disruption in industry remained active.

US: S&P CoreLogic CS 20-City (Sept.): 19.05% y/y vs 19.3% expected (prior: 19.65% revised from 19.66%)

• Prices were up by 0.96% m/m after 1.16% m/m the prior month. All 20 districts have shown a rise over the month, but the magnitude was in a large range from 0.2% to 2.5% m/m across districts.
• Yearly trend remained sustained.

 

US: Chicago PMI (Nov.): 61.8 vs 67 expected (prior: 68.4)

• While opinions on production have increased, those on new orders, employment and prices have eased from the prior month.
• Shortages and bottlenecks could explain the volatility seen in the index in the prior months; the index remained in the high range seen in 2017-2018.

 

US: Consumer confidence (CB) (Nov.): 109.5 vs 110.9 expected (prior: 111.6 revised from 113.8)

• Both expectations and views on current situation have eased from the prior month, and they both remained close to levels seen in Sept.
• Views on labor were quite positive as employment is seen plentiful, while views were more cautious on global activity. The 6-month views remained positive on future business conditions.
• With rising inflation expectations, willingness to buy large items (autos, appliances and houses) have decreased from the past 3 months.
• While trend in labor remained positive, inflation and new developments on virus could impact confidence and spending.

 

Eurozone: CPI estimate (Nov.): 4.9% y/y vs 4.5% expected (prior: 4.1%)

• First estimate has pointed to still sustained inflation due to rebounding energy prices (2.9% m/m) and sustained food prices (0.5% m/m). Core inflation was up by 0.1% m/m, and up by 2.6% y/y from 2% y/y the prior month.
• Inflation is expected to remain high in H1-22, but base effects from German VAT and energy prices should bring progressive decline in inflation during the course of next year. The ECB will probably be revised up its inflation forecasts in the next Dec. meeting.

 

Switzerland: KOF (Nov.): 108.5 vs 109 expected (prior: 110.2 revised from 110.7)

• Business sentiment has eased from the prior month, but it remained close to the highs seen in 2016.
• Downside risks from new variant, expensive CHF and renewed restrictions could weigh down on activity in the coming months.

 

France: Consumer spending (Oct.): -0.4% m/m vs 0% expected (prior: 0.2% revised from -0.2%)

• Consumption has declined due to falling autos, clothes and other durable goods; only energy consumption was up over the month.
• Disruption in the auto sector and weakening purchasing power have weighed down on purchases.

 

France: CPI (Nov.): 0.4% m/m vs 0.2% expected (prior: 0.4%)

• First estimates have pointed to still sustained monthly rises due to energy (1.5% m/m), food (0.4% m/m) while prices of services remained moderate (0.2% m/m).
• Yearly trend has increased further, from 3.2% y/y the prior month to 3.4% y/y.

 

Germany: Unemployment rate (Nov.): 5.3% vs 5.4% expected (prior: 5.4%)

• Unemployment ratio has declined further over the month; unemployed decreased by 34 k over the month after -40 k the prior month.

 

Italy: CPI (Nov.): 0.8% m/m vs 0.1% expected (prior: 0.9% revised from 0.8%)

• Inflation remained sustained over the month, due to rising prices of energy-utility and food; prices of communication and leisure have declined over the month.
• Yearly trend has increased further, from 3.2% y/y to 4% y/y.

 

Spain: Retail sales (real) (Oct.): -0.7% y/y (prior: -0.1%)

• Sales were down on household goods, but up on energy and personal goods.

 

Poland: CPI (Nov.): 1% m/m vs 0.6% expected (prior: 1.1%)

• Energy and utility prices have sharply increased over the month.
• Yearly trend has accelerated further to 7.7% y/y from 6.8% y/y.

 

Turkey: GDP (Q3-21): 2.7% q/q vs 3.3% expected (prior: 1.5% revised from 0.9%)

• Q3 growth came lower than expected, but Q2 GDP data were revised up.
• Public spending and net trade have fueled growth, while consumption has rebounded by 1.2% q/q in Q3 after -1.2 % q/q in Q2.