Market insight

Germany: IFO (Sept.): 84.3 vs 87 expected (prior: 88.6 revised from 88.5)

• Business sentiment has deteriorated further over the month. Sentiment has decreased on current situation (index from 97.5 to 94.5), and expectations have sharply fallen (from 80.5 to 75.2).
• Expectations have reached depressed levels, being close to the lows seen in the Covid period (expectations index at 71.9 in April 2020).
• By sector, sentiment has dramatically declined from the prior month in all major sectors (manufacturing, services and construction).

Spain: PPI (Aug.): 2.8% m/m (prior: 0.1% revised from 0%)

• Rises of electricity and gas have pushed up PPI inflation; prices of intermediate and manufacturing goods prices were down over the month.
• Yearly trend has accelerated further, from 40.5% y/y to 41.8% y/y.

Brazil: Consumer confidence (Sept.): 89 (prior: 83.6)

• Consumer confidence has slightly regained after several months of being in a range,

Brazil: Current account (July): -4136 M$ vs -3250 M$ expected (prior: 1333 M$)

• While current account deficit has increased over the month, foreign direct investment has increased from USD 5198 M the prior month to USD 7723 M.

Turkey: Industrial confidence (Sept.): 100.2 (prior: 101.4)

• Business confidence has decreased, being on a declining trend over the past months.
• Views on orders have decreased while exports were fragile and current production stable.

US: Manufacturing PMI (Sept. Prel.): 51.8 vs 51.0 expected (prior: 51.5)

• The manufacturing sector shows resilience with an unexpected increase in the headline index, and employment rising to 53.4, the highest reading since last March.

US: Services PMI (Sept. Prel.): 49.2 vs 45.5 expected (prior: 43.7)

• The headline index rebounded significantly more than expected to the highest level since last June.
• Employment edged lower to 52 (lowest since Dec 2021) from 53, while prices charged declined to the lowest reading since Jan. 2021 - a glimmer of hope for inflation.

Eurozone: PMI Manufacturing (Sept. Prel.): 48.5 vs 48.8 expected (prior: 49.6)

• Germany: 48.3 as expected (prior: 49.1)
• France: 47.8 vs 49.8 expected (prior: 50.6)
• Manufacturing output declined again, but only slightly (-0.3pt, 46.2). However, the forward-looking indicators deteriorated more sharply, with new orders down 2pt to 41.3 and expectations for future output down 7.6pt to 45.1. Employment, albeit still elevated, is also slowing (51.1, -0.7pt).

Eurozone: PMI Services (Sept. Prel.): 48.9 vs 49.1 expected (prior: 49.8)

• Germany: 45.4 vs 47.2 expected (prior: 47.7)
• France: 53.0 vs 50.5 (prior: 51.2)
• The headline services PMI is now well below the 50-threshold, and all services-activity-related indicators were weaker in September.
• After the tourism-driven strength, the periphery is now deteriorating in line with core (-1.7pt to 49.2). With a 1.8pt rise, France was an outlier, which may be explained by the fact that the country is less exposed to the shortage of Russian gas.

UK: PMI Manufacturing (Sept. Prel.): 48.5 vs 47.5 expected (prior: 47.3)

• A modest rebound following the sharp decline in August, but still in contractionary territory.

UK: PMI Services (Sept. Prel.): 49.2 vs 50.0 expected (prior: 50.9)

• With the index in contraction territory for the first time since February 2021, the summer tailwind for services appears to dissipate, increasing risks that the UK is already in recession.
• However, employment and prices continue to show resilience.

UK: GFK consumer confidence (Sept.): -49 vs -42 expected (prior: -44)

Consumer confidence dipped further into uncharted territory (since the survey started in 1974).

US: Initial jobless claims (Sept. 17): 213k vs 217k expected (prior: 208k revised from 213k)

• Continuing claims: 1379 k after 140 k the prior week.

Switzerland: The SNB has increased key rates by 75 bp to 0.50%.

• Facing strong rise in inflation (3.5% y/y in Aug.) and a broad increase across good prices and services, the SNB has decided to accelerate its pace of tightening. The door remains open to new (strong) rise in the next meeting. The inflation forecasts point to 3% in 2022, a still 2.4% in 2023 and 1.7% in 2024, and inflation target remains at 2%.
• The SNB still expects 2% growth this year but recognizes major downside risks to activity and upside risks on inflation.
• With a return to positive interest rates, sight deposits will be remunerated by the SNB until a threshold (0% above this).
• The SNB still mentioned it could intervene in FX market.

Norway: Norges bank has increased key rates by 50 bp to 2.25% as expected.

• With inflation concerns, the bank has increased key rates and has left door open to other adjustments in rates to reach 3% at year end.
• Growth forecasts have been revised down to -0.3% in 2023 and 0.4% in 2024.

France: Business confidence (Sept.): 102 as expected (prior: 104 revised from 103)

• Business confidence has decreased further but at slow pace and index was volatile in the previous month.
• While opinions on past production were positive, views have deteriorated on orders and future production.
• The index was volatile over the prior months and came below the levels seen in 2019, just before the fall related to covid and lockdown.
• Separately, confidence has also marginally declined in services, on decreasing outlook, while index remained stable on construction.

UK: The BoE has increased its key rates by 50 bp to 2.25% as expected.

• The Bank continued to hike by 50 bp its key rates. The vote on rates was split among governors, as 3 members wanted to increase rates by 75 pb and one by 25 bp.
• The Bank has revised down its peak on inflation from 13% to 11% in coming months after government decisions to cap energy prices. New detailed growth forecasts from the BoE will be set up in Nov., after the presentation of detailed budgetary supports by Friday. The Bank still refer to possible recession next quarters but on less negative pace
• Door remained open for another 50 or 75 bp in next meeting, given the budgetary policy in place. Sales of assets hold by the BoE will come under process.

Turkey: Consumer confidence (Sept.): 72.4 (prior: 72.2)

• Consumer confidence has marginally increased over the month.
• While concerns remained in place on financial situation, views have improved on economic situation and on purchases.

US: Existing home sales (Aug.): 4.8M vs 4.7M expected (prior: 4.82M revised from 4.81M)

• Sales have marginally declined over the month; sales of single-family houses have declined further but at a slower pace compared to past months; sales of condos have rebounded over the month after several months of large decline.
• Inventories remained stable over the month.
• Prices of houses sold have declined from the prior month but remained up by 7.7% y/y.

Switzerland: M3 (Aug.): -0.1% y/y (prior: -0.3%)

• M1 growth has regained at 2.7% y/y after 2.2% the prior month, and M2 growth was also up by 0.3% y/y after 0% the prior month.

Sweden: Unemployment rate (Aug.): 6.9% vs 7% expected (prior: 7%)

• Unemployed stayed stable over the month while labor force has declined over the past two months.

Poland: Retail sales (Aug.): 1% m/m vs 0% expected (prior: 1.2%)

• Sales remained sustained but with diverging trend by sector over the month.
• Spending was strong for clothes, pharma products and household goods while sales of food and autos were depressed.