Daily Macro Brief. Friday 5 January 2018 Kjersti Haugland, DNB Markets

Transcription

1 Daily Macro Brief Friday 5 January 218 Kjersti Haugland, DNB Markets

2 Overview Key events today Norway: The credit indicator (C2), an indicator that attracts little attention in markets despite its signals about potential financial imbalances, is released this morning. We expect credit growth to have edged up to 5.8% in November. USA: Non-farm payrolls, due at 14:3 GMT+1, is the most important release this week. Consensus expects a gain of 19k, while our forecast is 18k. The unemployment rate is expected to stay unchanged at 4.1%. Hourly earnings growth is expected at.3% - consistent with an unchanged annual growth rate of 2.5%. The non-manufacturing ISM index, due at 16 GMT+1, is expected to stay fairly unchanged at 57.5 in December. There is some upside risk to the forecast after the surprisingly strong outcome for the manufacturing index earlier this week. EMU: Flash inflation figures for December will attract attention, as the lack of a convincing upward trend in inflation is holding back ECB s exit from unconventional policies. Consensus expects headline and core inflation to have abated by.1pp, to 1.4 and 1.% y/y, respectively. See the attached calendar for details Back to index Daily Macro Brief page 2

3 Overview Key events since last report Norway: House prices for December fell by.5%, adjusted for seasonal variations, and the year-on-year rate edged further down, to -2.1%. The market seems to be functioning well, with a rise in sales compared to December last year. USA: The ADP employment report showed a gain of 25k in December, which was far stronger than expected. Initial claims rose to 25k, which was somewhat higher than anticipated beforehand. A preview of today s payrolls report is attached. EMU: Final Services PMI and Composite PMIs were little changed. The level of the indices are very strong. UK: The Services PMI (CIPS) rose marginally in December, in contrast with the corresponding manufacturing and construction indices released earlier. The composite CIPS GDP growth around.4% in Q4. For details on market developments, see here See the attached calendar for details Back to index Daily Macro Brief page 3

4 Norway: Housing prices fell in December Price development: Existing home prices fell by.5% m/m (sa). The annual growth rate fell further to -2.1% in December. The underlying tendency (annualised 3m/3m rate) was -2.9% in December. Average cost: NOK /m 2 (median = ). Homes sold: 2 93 in December, up 7.4% from December 216. Average selling time: It took 61 days to sell a home in December 217, up from 52 in December 216. Assessment: Prices continue to fall, but the market seems to be functioning well, with a rise in sales compared to December last year. With the number of homes for sales still high, we forecast house prices to decline moderately the next quarters Dec-7 Dec-9 Dec-11 Dec-13 Dec-15 Dec-17 m/m in % Index (rha) m/m % y/y % 3m/3m Sep-17 Oct-17 Nov-17 Dec-17 Oct-17 Nov-17 Dec-17 Dec-17 Home prices Source: EFF/FINN/Eiendomsverdi/DNB Markets Back to index Daily Macro Brief page Norway: Existing home prices Source: Eiendom Norge, FINN.no//Eiendomsverdi/DNB Markets

5 Norway: Oslo and Bergen weakest Oslo: -6.2% y/y, Bergen -6.% y/y, oil capital Stavanger:.% y/y Norway: Home prices Pct. change y/y -15 Nov-7 Nov-9 Nov-11 Nov-13 Nov-15 Nov-17 Oslo Bergen Trondheim Source: Eiendom Norge/ FINN/Eiendomsverdi/DNB Markets Norway: Home prices Pct. change y/y -15 Dec-7 Dec-9 Dec-11 Dec-13 Dec-15 Dec-17 Stavanger Tromsø Norway Source: Eiendom Norge/ FINN/Eiendomsverdi/DNB Markets Back to index Daily Macro Brief page 5

6 Norway: Advertising and sales up from 216 Number of homes sold up from 2 72 in December 216 to 2 93 in December 217 (left chart). Advertised homes up from 3 39 in December 216 to in December 217 (right chart). Home sales. Last month, actual sales (left) and advertised (right) Single homes Semidetached homes Appartments Source: Eiendom Norge, Finn.no and Eiendomsverdi Back to index Daily Macro Brief page 6

7 Norway: Selling time up from days in December 217, up from 52 days in December 216 Source: Eiendom Norge, Finn.no and Eiendomsverdi Number of days to sell a unit (from first advertisement to recorded sale) Back to index Daily Macro Brief page 7

8 Norway: Unsold homes fell, but level still high Norway: Unsold existing homes Norway x Oslo Oslo (ha) Source: Eiendom Norge/DNB Markets Back to index Daily Macro Brief page 8

9 USA: ADP employment still strong ADP private sector payrolls rose by 25k in December. Consensus was 19k (Reuters). The largest gains were seen for medium sized enterprises. Assessment: The figures indicate a still strong labour market. Note: The ADP numbers do not include public employees, which the BLS statistics (payrolls) does. ADP has not been a very precise indicator of BLS private payrolls ADP: Payrolls by company size Monthly change, 1 persons -1 Dec-15 Dec-16 Dec-17 Small Medium Large Source: Thomson Datastream/DNB Markets 35 USA: ADP and BLS Dec-15 Dec-16 Dec-17 ADP Payrolls (BLS) Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 9

10 USA: Stable and low initial claims Initial jobless claims were unchanged at 25k last week, a reading that was 9k above consensus expectations. 4w average edged up to 242k. Assessment: Claims are still at very low levels, indicating that the labour market continues to improve Week, 1 USA: Initial claims 13-Dec 2-Dec 27-Dec 3-Jan Initial claims change w/w week average Continued claims % of labour force Source: Thomson Datastream/DNB Markets USA: Cont. claims & unemployment Per cent 3 Dec-67 Dec-77 Dec-87 Dec-97 Dec-7 Dec USA: Initial Jobless Claims Seasonally adjusted Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Cont.claims Unemployed (rha) Actual 4 week average Source: Thomson Datastream/DNB Markets Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 1

11 Preview. Friday 5 January 14:3 (GMT+1) USA: Non-farm payrolls and unemployment Last month: Positive surprise Non-farm payrolls rose by 228k in November, exceeding expectations (Bloomberg: 195k). The unemployment rate unchanged at 4.1%, as expected. Hourly wages rose.2 m/m, vs an expected growth of.3%. We expect a strong end to the year: Non-farm payroll expected up 19k (high 232k, low 16k) in December (Bloomberg). Our estimate is 18k. The unemployment rate is expected unchanged at 4.1%, while wage growth is expected at.3% m/m. Market impact: Normally strong reaction if the outcome deviates from consensus USA: Labour market Dec-5 Dec-7 Dec-9 Dec-11 Dec-13 Dec-15 Dec-17 NF Payrolls, m/m, 1 Unemployment, % (rha) Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 11

12 EMU: Composite PMI edged up in December The PMI service index ended at 56.6 in December, up.1p from flash and up.4p from November. The composite index ended at 58.1,.6p higher than in November. Assessment: The composite index is at a high level and is consistent with GDP growth around.8% q/q in Q4. Manufacturing PMIs continues the climb upwards, while services have showed a more moderate increase recently. EZ: PMI Composite Manufacturing Services Source: Thomson Datastream/DNB Markets 65 EZ: PMI services Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Germany France Spain Italy Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 12

13 EMU: PMIs indicate.8% GDP growth EMU: Services PMI Oct-17 Nov-17 Dec-17 Dec-17 Flash Final Total New business Employment Output prices Input prices Existing business Germany France Italy Spain Source: Markit. The total is not a w eighted sum of subindices Euro zone: GDP and PMI Q1 28 Q1 213 Q1 218 GDP (% q/q, rha) PMI-Comp. GDP-est. (rha) Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 13

14 UK: Services CIPS rose in December Service CIPS increased.4p to 54.2 in December. Expected 54. (Bloomberg). Mixed pictured from sub-indices. Business expectations and input prices rose, while all other components fell. Largest fall for prices changed (-1.7p). Assessment: The service PMI rose a bit more than expected, and indicates a solid end to Q4. On the other hand the manufacturing and construction indices fell in December, painting a weaker picture for the overall economy. The composite index was almost unchanged. CIPS services Relative to average/standard deviation last 15Y 4 Dec-97 Dec-2 Dec-7 Dec-12 Dec-17 +/- 1 std.dev. Actual Source: Thomason Datastream/ DNB Markets UK: CIPS and GDP Q4 22 Q4 27 Q4 212 Q4 217 GDP q/q CIPS, weighted (ra) Source: Thomson Datastream/ DNB Markets Back to index Daily Macro Brief page 14

15 UK: Services and manufacturing CIPS UK: CIPS 3 Jan-98 Jan-2 Jan-6 Jan-1 Jan-14 Jan-18 Manufacturing Source: Thomson Datastream/DNB Markets Services UK: CIPS manufacturing Oct-17 Nov-17 Dec-17 Change Total New order (3%) Output (25%) Empl. (2%) Delivery times (15%) Stocks (1%) Output prices Source: Thomson Datastream/DNB Markets UK: CIPS services Oct-17 Nov-17 Dec-17 Change Total (business activity) Employment Outstanding business Business expectations New Business Prices charged Input prices Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 15

16 EURUSD EURGBP EURCHF EURSEK USDGBP USDJPY USDSEK USDCNY EURNOK USDNOK SEKNOK CHFNOK JPYNOK OSEBX OMX DAX Stoxx 6 FTSE 25 Dow Jones NASDAQ S&P 5 Nikkei 225 Hang Seng Shanghai USA* Germany France Japan Norway Sweden Italy Spain Markets: Overview Dollar softness ahead of payrolls release European and US stock markets continued up yesterday, and Asian markets follow the lead today. The dollar has weakened, despite strong ADP figures. The EURUSD is trading around 1.21,.4% higher than yesterday morning. The gain of the Scandies has been even stronger, with the SEK and the NOK up by.5% against the dollar. In government bond markets, Italian and Spanish 1-year yields have edged down by 5 basis points FX, change in per cent since 4 January 6:34* Equity indices year sov. bond yields Change in bps from previous to last close EUR USD NOK** *GMT +1 **Note that higher bars indicate weaker NOK % from previous to last close % since last close *Change in bps since 4-Jan 6:34* **GMT +1 Back to index Daily Macro Brief page 16

17 Markets Equities Dec-28 11:45 Dec-28 16:5 Dec-29 12:55 Jan-2 9:45 Europe Jan-2 14:5 Jan-3 1:55 Jan-3 15:15 Jan-4 12: Jan-4 16: Dec-27 22:1 Dec-28 22:1 Dec-29 22:1 USA Jan-2 22:1 Jan-3 22: Jan-4 22:1 *GMT +1 Oslo Stock Exchange EURO STOXX 5 (rha) *GMT +1 S&P 5 Dow Jones (rha) Dec-28 3: Dec-28 7:55 *GMT +1 Dec-29 6: Hang Seng Jan-2 3:1 Asia Jan-2 8:5 Jan-3 6:1 Jan-4 3:2 Nikkei 225 (rha) Jan-4 8: Jan-5 6: Dec-27 22:1 Dec-28 22:1 *GMT +1 Dec-29 22:1 VIX Jan-2 22:1 Jan-3 22:1 Jan-4 22:1 Back to index Daily Macro Brief page 17

18 Markets FX EURNOK and USDNOK EURSEK and SEKNOK Dec-29 1:2 Jan-2 6:3 Jan-3 6:3 Jan-4 6: Jan-5 6: Dec-29 1:2 Jan-2 6:3 Jan-3 6:3 Jan-4 6: Jan-5 6:3 *GMT +1 EURNOK USDNOK (rha) *GMT +1 EURSEK SEKNOK (inv,rha) Dec-29 1:2 Jan-2 6:3 EURUSD and USDJPY Jan-3 6:3 Jan-4 6: Jan-5 6: Dec-29 1:2 Jan-2 6:3 EURCHF and EURGBP Jan-3 6:3 Jan-4 6: Jan-5 6:3 *GMT +1 EURUSD USDJPY (inv,rha) *GMT +1 EURCHF EURGBP (rha) Back to index Daily Macro Brief page 18

19 Change in bp since 4 January Mar Jun Sep Dec Mar Jun Sep Dec Markets Fixed income *GMT +1 Dec-29 1: Dec-29 14:2 1 sovereign bond yields Jan-2 12:2 USA Jan-3 1:4 Jan-4 1:5 Germany Jan-4 15: Jan-5 6:3 EURUSD 3m basis swap Oct 3-Nov 31-Dec FRA: NOK and EUR Change in bp left axis NOK, change in bp NOK 5-Jan EUR, change in bp EUR 5-Jan % 3m Nibor Oct 3-Nov 31-Dec Back to index Daily Macro Brief page 19

20 Markets Miscellaneous Jan-1 5:35 *GMT +1 Jan-2 5:5 Crude oil and gold Crude, $/barrel Jan-3 6: Jan-4 6:1 Gold, $/ounce (rha) Jan-5 6: Commodity prices USD per metric tonne, rebased to Oct 2-Oct 3-Nov 17-Nov 1-Dec 15-Dec 29-Dec Iron ore 62% China Index Steel price (China, CNY m/t) LME Copper price LME Aluminum 3m fwd 1y swap-sov spread, bp Change in bp in parenthesis 23 Markit itraxx Crossover Oct 3-Nov 31-Dec US () DE () NO () Nov 2-Nov 4-Dec 18-Dec 1-Jan Back to index Daily Macro Brief page 2

21 Markets Spot rates and forecasts Spot rates and forecasts FX 7 Last Today % In 1m Mar-18 Jun-18 Dec-18 FX 7 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 21

22 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.8.8 3y y.. 5y y y y.3.3 7y y y y y y y y Norw ay Prior Last SEK Prior Last US Prior Last Germany Prior Last NST479/d 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 1y sw ap Sw eden 3m libor 1y USA 3m libor sw ap 1y sw ap Germany 3m euribor 1y sw ap Mar Mar Mar Mar Jun Jun Jun Jun Dec Dec Dec Dec Back to index Daily Macro Brief page 22

23 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 7 % last NST479/d S&P % NST479/d Dow Jones % NOK FRA 3 mnd 6 mnd NOK NIBOR FTSE % Mar m.6 Stoxx % Jun m.78 DAX % Sep m.89 Nikkei % Dec OSEBX % Sources to all tables and graphics: Thomson Reuters, Thomson Datastream and DNB Markets Back to index Daily Macro Brief page 23

24 Calendar Thursday - Friday Importance GMT+2 Country Event Period Unit Last Cons. DNB Actual Thursday 4 January 1:3 Japan Nikkei Manufacturing PMI Dec Index :45 China Caixin Composite PMI Output Dec Index : UK Nationwide All House Price Dec m/m % :3 Sweden Services PMI Dec Index : EMU Markit Services PMI Dec Index : EMU Markit Composite PMI Dec Index :3 UK Markit/CIPS Composite PMI Dec Index : Norway House prices Dec m/m % :15 USA ADP National Employment Report Dec :3 USA Initial Jobless Claims SA W :45 USA Markit Composite PMI Dec Index Friday 5 January 1:3 Japan Nikkei Composite PMI Dec Index : Norway Credit Indicator C2 Nov y/y % : EMU Core inflation, flash Dec y/y % :3 USA Trade Balance of Goods and Services Nov USDbn :3 USA Nonfarm Payrolls, change Dec :3 USA Unemployment Rate Dec % :3 USA Average Hourly Earnings Dec m/m % : USA ISM Non-Manufacturing Dec Index Back to index Daily Macro Brief page 24

25 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 25

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