Daily Macro Brief. Monday 16 October 2017 Kyrre Aamdal, DNB Markets

Transcription

1 Daily Macro Brief Monday 16 October 2017 Kyrre Aamdal, DNB Markets

2 Overview Key events today Norway: Trade balance in September (no forecasts) USA: Empire state business sentiment indicator is expected to fall by 5.2p to 20 in October Highlights the rest of the week: Tuesday: UK CPI inflation in September and US industrial output Wednesday: 19 th Party Congress to begin in China, Fed to publish Beige Book Thursday: Chinese GDP figures for Q3, Swedish unemployment figures Friday: Norges Bank Regional Network (phone survey) See the attached calendar for details Back to index Daily Macro Brief page 2

3 Overview Key events since last report USA: Higher gasoline prices pushed up retail sales and CPI inflation in September, as consensus had expected. Retail sales surged by 1% m/m, but the control group which excluded auto vehicles, gasoline, building materials & food services, rose 0.5% m/m thereby indicating solid underlying growth in household demand. CPI inflation ended at 2.2% y/y, up 0.3pp from the previous month, while core CPI remained unchanged at 1.7% y/y. We therefore maintain our view that the Fed will raise rates on the meeting in December, which is line with the market pricing at the moment. For details on market developments, see here See the attached calendar for other key figures Back to index Daily Macro Brief page 3

4 USA: Core inflation stable in September Core CPI inflation, which excludes food and energy prices, was stable at 1.7% y/y in September. According to Bloomberg, consensus had expected an increase of 0.1pp to 1.8% y/y Headline inflation came in at 2.2% y/y, up 0.3pp from August but 0.1pp lower than expected by consensus (Bloomberg). Assessment: Total inflation was lifted by higher gasoline prices, while the core remained unchanged somewhat below the Fed s target. We continue to expect the Fed to hike in December, which is fairly in line with market pricing at the moment (77% probability of hike) Sep-07 Sep-09 Sep-11 Sep-13 Sep-15 Sep-17 Total USA: Consumer prices Percentage chang year/year Excl. food and energy ('core') Back to index Daily Macro Brief page 4

5 USA: CPI subindices USA: Consumer Prices Percentage chang year/year -2 Sep-07 Sep-12 Sep-17 Housing Goods - core Services USA: CPI ex. food/energy Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 m/m sa 3m/3m sayr (rha) USA: Inflation m/m sa % y/y % Jun-17 Jul-17 Aug-17 Sep-17 Jun-17 Jul-17 Aug-17 Sep-17 PCE-deflator ex/ food and energy CPI, headline ex/ food and energy Back to index Daily Macro Brief page 5

6 USA: CPI - details USA: Inflation m/m sa % y/y % Change in Jul-17 Aug-17 Sep-17 Jul-17 Aug-17 Sep-17 y/y rate CPI, headline (100) ex/ food and energy (77.7) Food and beverages (14.8) Food at home (7.8) Food away from home (6.2) Housing (42.0) Rent (6.0) Lodging away from home (0.7) Owners equivalent rent (25.2) Apparel (3.7) Transport (16.7) Medical care (6.5) Recreation (6.4) Educat. and comm. (6.4) Other (3.5) Back to index Daily Macro Brief page 6

7 USA: Retail sales up on higher gasoline prices Retail sales rose 1.0% m/m in September, slightly more than consensus had expected (0.9%). This came after a decline of 0.1% m/m in August (previously reported at -0.2%) The surge is mostly driven by the increase in gasoline prices in September due to Hurricane Harvey and Irma. The retail control group, which excludes autos, gasoline, building materials & food services and is part of consumer demand in the national accounts, rose by 0.4% m/m, in line with consensus expectations. Assessment: Solid figures, but most of the rise in sales are driven by higher prices, not an increase in sales volumes. However, the underlying trend for consumer demand still looks good, driven by the tight labour market Retail sales Bill. USD. Seas. adjusted Sep-11 Sep-13 Sep-15 Sep-17 Total Ex cars (rha) USA: Retail sales Seasonally adjusted, m/m % -1.5 Sep-15 Sep-16 Sep-17 Total Ex. autos Back to index Daily Macro Brief page 7

8 USA: Retail sales, main figures Retail sales bn $ sa m/m sa % y/y % Sep-17 Jun-17 Jul-17 Aug-17 Sep-17 Jul-17 Aug-17 Sep-17 Total Motor vehicles/parts Ex. autos Ex. autos, gasoline, bldg materials Retail control Source: Thomson Datastream Retail sales ("core") Ex. autos, gasoline and building materials Bn. USD. Seasonally adjusted Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Retail and car sales USD bn. Seas. adjusted Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Retail Car sales (ra) Back to index Daily Macro Brief page 8

9 USA: Retail sales, details (I) Retail sales bn $ sa m/m sa % y/y % Sep-17 Jun-17 Jul-17 Aug-17 Sep-17 Jul-17 Aug-17 Sep-17 Furniture etc Electronics etc Sporting goods/hobbies Building equipment Non store retailers of which: e- og postal trade Source: Thomson Datastream Retail sales Billion USD. Seasonally adjusted 6.0 Sep-11 Sep-13 Sep-15 Sep-17 Furniture Electronics Sport/hobby Retail sales Billion USD. Seasonally adjusted 19 Sep-11 Sep-13 Sep-15 Sep-17 Building equipment Non-store retailers (rha) e-trade (rha) Back to index Daily Macro Brief page 9

10 USA: Retail sales, details (II) Retail sales bn $ sa m/m sa % y/y % Sep-17 Jun-17 Jul-17 Aug-17 Sep-17 Jul-17 Aug-17 Sep-17 Food/drink services Food and beverage General Merchandice Health/personal care Gasoline stations Clothing/accesories Div Source: Thomson Datastream Retail sales Billion USD. Seasonally adjusted 35 Sep-11 Sep-13 Sep-15 Sep-17 Food/bev. Food/drink services General merchandise Retail sales Billion USD. Seasonally adjusted 10 Sep-11 Sep-13 Sep-15 Sep-17 Gasoline Health Clothing Back to index Daily Macro Brief page 10

11 OSEBX OMX DAX Stoxx 600 FTSE 250 Dow Jones NASDAQ S&P 500 Nikkei 225 Hang Seng Shanghai USA Germany EURUSD EURGBP France Japan Norway Sweden EURCHF EURSEK USDGBP USDJPY USDSEK USDCNY EURNOK USDNOK SEKNOK CHFNOK JPYNOK Italy Spain Markets: Overview Oil Price Moved Higher Increased tensions over city Kirkuk has contributed to increase the oil price over the weekend. Lower inflation figures than expected lowered U.S. rates and the dollar. The EURUSD turned however later and is currently down 0.3% from Friday morning. U.S. stocks rose marginally Friday with S&P500 up 0.1%. European stocks were mixed, but Japanese Nikkei 225 is up 0.6% as typing FX, change in percent since 13 October 07:12* Equity indices year sov. bond yield, change in bp since 13 October 07:12* EUR USD NOK** **Note that higher bars indicate weaker NOK % from previous to last close % since last close **Norway, Sweden, Italy, Spain: Change in bp from previous to last close Back to index Daily Macro Brief page 11

12 Markets Equities Oct-09 17:55 Oct-10 13:20 Oct-10 17:55 Oct-11 13:20 Europe Oct-11 17:55 Oct-12 13:20 Oct-12 17:55 13: : Oct-11 14:15 Oct-11 21:15 Oct-12 14:50 USA Oct-12 21:50 15: :25 Oslo Stock Exchange EURO STOXX 50 (rha) S&P 500 Dow Jones (rha) Oct-10 07:55 Oct-11 03:45 Oct-11 07:45 Hang Seng Oct-12 03:35 Asia Oct-12 07:35 03:25 07:25 Nikkei 225 (rha) Oct-16 03: Oct-16 07: Oct-11 14:15 Oct-11 21:15 Oct-12 14:50 VIX Oct-12 21:50 15:40 22:25 Back to index Daily Macro Brief page 12

13 Markets FX Oct-10 10:20 Oct-11 10:20 EURUSD and USDJPY Oct-12 10:20 10: Oct-16 07: Oct-10 10:20 Oct-11 10:20 EURCHF and EURGBP Oct-12 10:20 10: Oct-16 07:20 EURUSD USDJPY (inv,rha) EURCHF EURGBP (rha) EURNOK and USDNOK EURSEK and SEKNOK Oct-10 10:20 Oct-11 10:20 Oct-12 10:20 10: Oct-16 07: Oct-10 10:20 Oct-11 10:20 Oct-12 10:20 10: Oct-16 07:20 EURNOK USDNOK (rha) EURSEK SEKNOK (inv,rha) Back to index Daily Macro Brief page 13

14 Change in bp since 13 October Dec Mar Jun Sep Dec Mar Jun Sep Markets Fixed income :00 10 sovereign bond yields 11:30 15:00 18:30 22: Oct-16 07: :00 11:30 10 sovereign bond yields 15:00 18:30 22: Oct-16 07:05 USA Germany (rha) Italy Spain (rha) FRA: NOK and EUR Change in bp left axis % m Nibor NOK, change in bp NOK 16-Oct EUR, change in bp EUR 16-Oct Jul 14-Aug 14-Sep 14-Oct Back to index Daily Macro Brief page 14

15 Markets Miscellaneous Japan: 10 year sovereign bond yield Jul 14-Aug 14-Sep 14-Oct EURUSD 3m basis swap Jul 14-Aug 14-Sep 14-Oct Spread over Bunds 10y, basis points 0 16-Nov 16-Feb 16-May 16-Aug 16-Nov 16-Feb 16-May 16-Aug France Italy Spain 58.5 Crude oil and gold Oct-10 06:25 Oct-11 06:35 Oct-12 06:45 06:55 Crude, $/barrel Gold, $/ounce (rha) Oct-16 07:05 Back to index Daily Macro Brief page 15

16 Markets Spot rates and forecasts Spot rates and forecasts FX 0700 Last Today % In 1m Jan-18 Apr-18 Oct-18 FX 0700 USD NOK USD/JPY AUD USD/CNY CAD EUR/USD CHF EUR/GBP CNY EUR/DKK CZK EUR/SEK GBP EUR/CHF ZAR EUR/NOK HKD USD/NOK KRW JPY/NOK BRL SEK/NOK NZD DKK/NOK RUB GBP/NOK SEK CHF/NOK SGD Back to index Daily Macro Brief page 16

17 Markets Interest rates NOK Prior Last SEK Prior Last USD Prior Last EUR Prior Last 1m m m m m m m m m m m m y m m y y y y y y y y y y y y y y y y Norw ay Prior Last SEK Prior Last US Prior Last Germany Prior Last NST y y y y yld y yld y yld y yld US sprea US sprea y yld US spread Norw ay 3m nibor Interest rates Governm ent bonds Interest rate forecasts 10y sw ap Sw eden 3m libor 10y USA 3m libor sw ap 10y sw ap Germany 3m euribor 10y sw ap Jan Jan Jan Jan Apr Apr Apr Apr Oct Oct Oct Oct Back to index Daily Macro Brief page 17

18 Markets Miscellaneous Miscellaneous NOK sov. Prior Last Change Maturity year rem. NOK-index TWI Prior NST Last NST Oil price: (Ldn,cl) 1m NST SPOT NST Gold price PM NST AM: NST Equities Today 0700 % last NST S&P % NST Dow Jones % NOK FRA 3 mnd 6 mnd NOK NIBOR FTSE % Dec m 0.68 Stoxx % Mar m 0.84 DAX % Jun m 0.89 Nikkei % Sep OSEBX % Sources to all tables and graphics: Thomson Reuters, Thomson Datastream and DNB Markets Back to index Daily Macro Brief page 18

19 Calendar Friday Monday Importance GMT+2 Country Event Period Unit Last Cons. DNB Actual Friday 13 October China Exports Sep %, y/y 5.6r China Imports Sep %, y/y 13.5r China Trade Balance Sep USD Bn 41.92r :00 Germany HICP Final Sep %, y/y :30 USA Core inflation (CPI) Sep %, y/y :30 USA Inflation (CPI) Sep %, y/y :30 USA Retail Sales Sep %, m/m :30 USA Retail Control Sep %, m/m :00 USA Business Inventories Aug %, m/m :00 USA U. of Michigan Sentiment Pre. Oct Index :25 USA Fed's Evans, Kaplan and Powell Speak Monday 16 October 03:30 China CPI Sep y/y % :30 Japan Industrial output, revised Aug m/m % :00 Norway Trade balance Sep bn NOK :00 Sweden Riksbank's Ohlsson to speak 14:30 USA Empire state business sentiment Oct Index Back to index Daily Macro Brief page 19

20 Calendar Tuesday - Wednesday Importance GMT+2 Country Event Period Unit Last Cons. DNB Actual Tuesday 17 October 08:00 EMU Car sales Sep y/y % :15 UK BoE's Carney to testify before lawmakers 10:30 UK CPI inflation Sep y/y % :30 UK Core CPI inflation Sep y/y % :00 EMU Core CPI inflation Sep y/y % :00 Germany ZEW sentiment indicator Oct Index :15 USA Industrial output Sep m/m % :15 USA Manufacturing output Sep m/m % :00 USA NAHB sentiment indicator Oct Index :00 USA TIC Net Flows Aug bn USD -7.3 USA Fed's Harker to speak Wednesday 18 October China 19th Party Congress 10:10 EMU ECB's Draghi to speak in Frankfurt 10:30 UK Claimant Count, change Sep :30 UK ILO Unemployment Rate SA Aug % :30 UK Average wages Aug y/y % :00 EMU Construction activity Aug m/m % :00 USA Fed's Dudley and Kaplan to discuss economic development 14:30 USA Home starts Sep m/m % :30 USA Building permits Sep m/m % :00 USA Beige Book Back to index Daily Macro Brief page 20

21 Calendar Thursday Sunday Importance GMT+2 Country Event Period Unit Last Cons. DNB Actual Thursday 19 October 01:50 Japan Trade balance Sep bn JPY :00 China GDP Q3 q/q % :00 China GDP Q3 y/y % :00 China Industrial output Sep y/y % :00 China Retail sales Sep y/y % :00 China Fixed asset investments Sep y/y % :00 Switzerland Trade balance Sep bn CHF :30 Sweden Unemployment Rate SA Sep % :00 Norway Norges Bank's lending Survey Q3 10:30 UK Retail sales ex auto Sep m/m % :30 UK Retail sales Sep m/m % :30 USA Initial claims 14-Oct :30 USA Philadelphia Fed Oct Index :00 USA Conference Board Leading Index Sep m/m % Friday 20 October 08:00 Germany Producer Prices Sep y/y % :00 Norway Industrial confidence Q3 Index :00 Norway Norges Bank Regional Network (phone survey) 16:00 USA Existing home sales Sep m/m % :00 USA Fed's Mester to speak Sunday 22 October Japan General election Back to index Daily Macro Brief page 21

22 DNB Markets Macro Research Contact details Kjersti Haugland Chief Economist, Euro area / kjersti.haugland@dnb.no Jeanette Strøm Fjære Economist, Norway and Sweden / jeanette.strom.fjare@dnb.no Ole A. Kjennerud Economist, China and Japan / ole.kjennerud@dnb.no Knut A. Magnussen Senior Economist, USA, UK and Brazil / knut.magnussen@dnb.no Magne Østnor FX Strategist / magne.ostnor@dnb.no Marit Øwre-Johnsen FX Analyst / marit.owre-johnsen@dnb.no Kyrre Aamdal Senior Economist, Norway, Sweden, interest rates / kyrre.aamdal@dnb.no Back to index Daily Macro Brief page 22

23 Important/Disclaimer This note (the Note ) must be seen as marketing material and not as an investment recommendation within the meaning of the Norwegian Securities Trading Act of 2007 paragraph 3-10 and the Norwegian Securities Trading Regulation 2007/06/29 no The Note has been prepared by DNB Markets, a division of DNB Bank ASA, a Norwegian bank organized under the laws of the Kingdom of Norway (the Bank ), for information purposes only. The Note shall not be used for any unlawful or unauthorized purposes. The Bank, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (individually, each a DNB Party ; collectively, DNB Parties ) do not guarantee the accuracy, completeness, timeliness or availability of the Note. DNB Parties are not responsible for any errors or omissions, regardless of the cause, nor for the results obtained from the use of the Note, nor for the security or maintenance of any data input by the user. The Note is provided on an as is basis. DNB PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE NOTE S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE NOTE WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall DNB Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Note, even if advised of the possibility of such damages. Any opinions expressed herein reflect the Bank s judgment at the time the Note was prepared and DNB Parties assume no obligation to update the Note in any form or format. The Note should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. No DNB Party is acting as fiduciary or investment advisor in connection with the dissemination of the Note. While the Note is based on information obtained from public sources that the Bank believes to be reliable, no DNB Party has performed an audit of, nor accepts any duty of due diligence or independent verification of, any information it receives. Confidentiality rules and internal rules restrict the exchange of information between different parts of the Bank and this may prevent employees of DNB Markets who are preparing the Note from utilizing or being aware of information available in DNB Markets/the Bank that may be relevant to the recipients of the Note. The Note is not an offer to buy or sell any security or other financial instrument or to participate in any investment strategy. Distribution of material like the Note is in certain jurisdictions restricted by law. Persons in possession of the Note should seek further guidance regarding such restrictions before distributing the Note. The Note is for clients only, and not for publication, and has been prepared for information purposes only by DNB Markets - a division of DNB Bank ASA registered in Norway with registration number NO (the Register of Business Enterprises) under supervision of the Financial Supervisory Authority of Norway (Finanstilsynet), the Monetary Authority of Singapore, and on a limited basis by the Financial Conduct Authority and the Prudential Regulation Authority of the UK, and the Financial Supervisory Authority of Sweden. Details about the extent of our regulation by local authorities outside Norway are available from us on request. Information about DNB Markets can be found at dnb.no. Additional information for clients in Singapore The Note has been distributed by the Singapore Branch of DNB Bank ASA. It is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of any product referred to in the Note, taking into account your specific financial objectives, financial situation or particular needs before making a commitment to purchase any such product. You have received a copy of the Note because you have been classified either as an accredited investor, an expert investor or as an institutional investor, as these terms have been defined under Singapore s Financial Advisers Act (Cap. 110) ( FAA ) and/or the Financial Advisers Regulations ( FAR ). The Singapore Branch of DNB Bank ASA is a financial adviser exempt from licensing under the FAA but is otherwise subject to the legal requirements of the FAA and of the FAR. By virtue of your status as an accredited investor or as an expert investor, the Singapore Branch of DNB Bank ASA is, in respect of certain of its dealings with you or services rendered to you, exempt from having to comply with certain regulatory requirements of the FAA and FAR, including without limitation, sections 25, 27 and 36 of the FAA. Section 25 of the FAA requires a financial adviser to disclose material information concerning designated investment products which are recommended by the financial adviser to you as the client. Section 27 of the FAA requires a financial adviser to have a reasonable basis for making investment recommendations to you as the client. Section 36 of the FAA requires a financial adviser to include, within any circular or written communications in which he makes recommendations concerning securities, a statement of the nature of any interest which the financial adviser (and any person connected or associated with the financial adviser) might have in the securities. Please contact the Singapore Branch of DNB Bank ASA at in respect of any matters arising from, or in connection with, the Note. The Note is intended for and is to be circulated only to persons who are classified as an accredited investor, an expert investor or an institutional investor. If you are not an accredited investor, an expert investor or an institutional investor, please contact the Singapore Branch of DNB Bank ASA at We, the DNB group, our associates, officers and/or employees may have interests in any products referred to in the Note by acting in various roles including as distributor, holder of principal positions, adviser or lender. We, the DNB group, our associates, officers and/or employees may receive fees, brokerage or commissions for acting in those capacities. In addition, we, the DNB group, our associates, officers and/or employees may buy or sell products as principal or agent and may effect transactions which are not consistent with the information set out in the Note. Additional Information, including for Recipients in the United States: The Note does not constitute an offer to sell or buy a security and does not include information, opinions, or recommendations with respect to securities of an issuer or an analysis of a security or an issuer. Back to index Daily Macro Brief page 23