Daily Macro Brief. Friday 18 August 2017 Martin Vikenes & Marit Øwre-Johnsen, DNB Markets

Transcription

1 Daily Macro Brief Friday 18 August 2017 Martin Vikenes & Marit Øwre-Johnsen, DNB Markets

2 Overview Key events today USA: Preliminary figures for the University of Michigan Sentiment index is published. The total index is expected to edge up to 94 in August from previous month s 93.4, mostly driven by the expectations sub-index. See the attached calendar for details Back to index Daily Macro Brief page 2

3 Overview Key events since last report USA: Industrial production saw a decent growth in July, despite a slight decline in manufacturing output. Initial jobless claims were lower last week underpinning a solid US labour market. EMU: ECB s account of monetary policy revealed concerns of euro overshoot. 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: Industrial output rose in July Industrial output increased by 0.2% m/m in July, 0.1pp lower than expected. Manufacturing output, which is less volatile, declined by 0.1% m/m (expected up 0.2%) Capacity utilisation unchanged at 76.7% (June revised up 0.1pp to 76.7%) Assessment: Decent production growth, continuing Q2 s solid growth. If monthly growth continues, Q3 growth will be 1.7%. All in all, the numbers confirm that the weak growth in Q1 was temporary, but momentum remain weak and fragile USA: Industrial production Seasonally adjusted volume change, m/m % -1.0 Jul-14 Jul-15 Jul-16 Jul-17 Total Manufacturing Source: Thomson Datastream/DNB Markets US: Manufacturing Jul-82 Jul-89 Jul-96 Jul-03 Jul-10 Jul-17 Manufacturing prod y/y Capacity utilisation (rha) Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 4

5 US: Industrial production, details Industrial production Volume change m/m, s.a., % Volume change y/y % Apr-17 May-17 Jun-17 Jul-17 May-17 Jun-17 Jul-17 Total Manufacturing Durables Cars Non-durables Cons um ption goods Interm ediates Capacity utilis ation Source: Thom s on Datas tream/dnb Markets US: Production indices Seasonally adjusted 98 Jul-11 Jul-14 Jul-17 Intermediates Source: Thomson Datastream/DNB Markets Consumption goods US: Production indices Seasonally adjusted 90 Jul-11 Jul-14 Jul-17 Durables Non-durables Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 5

6 US: Industrial output and GPD USA: Industrial output and GDP q/q in % (saar) Q Q Q Q GDP Ind. output (rha) Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 6

7 USA: Initial jobless claims lower last week Initial jobless claims declined by 12k to 232k last week. This was lower than expected (240k). The four-week average unchanged at 241k. Assessment: The level for initial claims remains very low. This points to a continued high employment growth. Week, 1000 USA: Initial claims 26-Jul 2-Aug 9-Aug 16-Aug Initial claims change w/w week average Continued claims % of labour force Source: Thomson Datastream/DNB Markets USA: Cont. claims & unemployment Per cent 0 3 Jul-67 Jul-77 Jul-87 Jul-97 Jul-07 Jul-17 Cont.claims Source: Thomson Datastream/DNB Markets Unemployed (rha) USA: Initial Jobless Claims Seasonally adjusted Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Actual Source: Thomson Datastream/DNB Markets 4 week average Back to index Daily Macro Brief page 7

8 USA: 4w average lowest since July Initial Jobless Claims Seasonally adjusted Oct-65 Oct-75 Oct-85 Oct-95 Oct-05 Oct-15 Actual 4 week average Source: Kilde: Thomson Thomson Datastream/DnBNOR Datastream/DNB Markets Markets Back to index Daily Macro Brief page 8

9 Accounts from ECB monetary policy meeting 20 July EMU: Potential euro overshooting a concern A stronger euro reflects improved fundamentals, but At the same time, concerns were expressed about a possible overshooting in the repricing by financial markets, notably the foreign exchange markets, in the future. It was underlined that the still favourable financing conditions could not be taken for granted and relied to a considerable extent on a continued high degree of monetary policy accommodation Loose policy still important: Members generally agreed that the ECB s monetary policy measures had contributed significantly to the ongoing economic expansion and that a sustained momentum in economic growth was still contingent on continued favourable financing conditions. Yet, a remark was also made that the expansion was increasingly self-sustaining and hence had become less dependent on the current degree of monetary policy accommodation. Not yet convinced about inflation upturn: convincing evidence of a sustained convergence towards levels compatible with the ECB s inflation aim was still seen to be lacking. Overall, while members considered that the ongoing economic expansion gave reason for confidence that inflation dynamics would strengthen over time, they emphasised that patience, persistence and prudence were needed, as this process was expected to take time and remained contingent on a very substantial degree of monetary policy accommodation. Back to index Daily Macro Brief page 9

10 Accounts from ECB monetary policy meeting 20 July EMU: Paramount to avoid volatile markets Suggestion of tweak in forward guidance turned down: A suggestion was made that some consideration be given to an incremental adjustment in the language on forward guidance, because postponing an adjustment for too long could give rise to a misalignment between the Governing Council s communication and its assessment of the state of the economy, which could trigger more pronounced volatility in financial markets when communication eventually had to shift. However, it was generally judged paramount at this stage to avoid sending signals that could be prone to over-interpretation and might prove premature. Accordingly, there was agreement among all members to retain all elements of forward guidance ECB to strike fine balance : In the light of the heightened sensitivity of financial markets to news, a steady approach to communication was seen as key. The Governing Council needed to strike a fine balance between, on the one hand, expressing justified confidence in the economic expansion and, on the other hand, underlining the need for monetary policy to remain persistent and patient.( ) The view was widely shared that prudence was warranted with regard to the Governing Council s communication on the possible timing of its deliberations on the future course of its monetary policy. Overall, members agreed that communication on the timing of the decision should refer to the autumn. 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 Risk-off with stronger JPY and equities down NOK weakened despite the oil price gaining 1% on lower US inventory data. The euro depreciated after the account of ECB s monetary policy revealed members concerned with euro overshoot. CHF and JPY strengthened, while stock markets took a downturn and demand for bonds pushed long-term bond yields slightly down. This indicates increased risk aversion in most markets. US stock decline may be explained by more political turmoil around Trump and his ability to push through fiscal stimulus measures FX, change in percent since 17 August 06:21* Equity indices year sov. bond yield, change in bp since 17 August 06:21* 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 Source: Thomson Datastream/DNB Markets Back to index Daily Macro Brief page 11

12 Markets Equities Aug-11 17:55 Aug-14 13:20 Aug-14 17:55 Aug-15 13:20 Europe Aug-15 17:55 Aug-16 13:20 Aug-16 17:55 13: : Aug-15 14:15 Aug-15 21:15 Aug-16 14:50 USA Aug-16 21:50 15: :25 Oslo Stock Exchange EURO STOXX 50 (rha) S&P 500 Dow Jones (rha) Aug-14 07:05 Aug-15 02:55 Aug-15 06:55 Aug-16 02:45 Hang Seng Asia Aug-16 06:45 02:35 06:35 Nikkei 225 (rha) Aug-18 02: Aug-18 06: Aug-15 14:15 Aug-15 21:15 Aug-16 14:50 VIX Aug-16 21:50 15:40 22:25 Back to index Daily Macro Brief page 12

13 Markets FX Aug-14 06:30 EURUSD and USDJPY Aug-15 06:30 Aug-16 06:30 06: Aug-18 06: Aug-14 06:30 Aug-15 06:30 EURCHF and EURGBP Aug-16 06:30 06: Aug-18 06:30 EURUSD USDJPY (inv,rha) EURCHF EURGBP (rha) EURNOK and USDNOK EURSEK and SEKNOK Aug-14 06:30 Aug-15 06:30 Aug-16 06:30 06: Aug-18 06: Aug-14 06:30 Aug-15 06:30 Aug-16 06:30 06: Aug-18 06:30 EURNOK USDNOK (rha) EURSEK SEKNOK (inv,rha) Back to index Daily Macro Brief page 13

14 Change in bp since 17 August Sep Dec Mar Jun Sep Dec Mar Jun Markets Fixed income :30 12:00 10 sovereign bond yields USA 15:30 19:00 Germany (rha) 22: Aug-18 06: :30 12:00 10 sovereign bond yields Italy 15:30 19:00 Spain (rha) 22: Aug-18 06: FRA: NOK and EUR Change in bp left axis NOK, change in bp NOK 18-Aug EUR, change in bp EUR 18-Aug % 3m Nibor May 18-Jun 18-Jul 18-Aug Back to index Daily Macro Brief page 14

15 Markets Miscellaneous Japan: 10 year sovereign bond yield May 18-Jun 18-Jul 18-Aug EURUSD 3m basis swap May 18-Jun 18-Jul 18-Aug Spread over Bunds 10y, basis points 0 18-Sep 18-Dec 18-Mar 18-Jun 18-Sep 18-Dec 18-Mar 18-Jun France Italy Spain 52.5 Crude oil and gold Aug-14 05:30 Aug-15 05:40 Aug-16 05:50 06:05 Crude, $/barrel Gold, $/ounce (rha) Aug-18 06:15 Back to index Daily Macro Brief page 15

16 Markets Spot rates and forecasts Spot rates and forecasts FX 0700 Last Today % In 1m Oct-17 Jan-18 Jul-18 FX 0700 USD NOK USD/JPY AUD EUR/USD CAD EUR/GBP CHF EUR/DKK CNY EUR/SEK CZK EUR/CHF GBP 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 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 Governm ent bonds 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 rate forecasts 10y sw ap Sw eden 3m libor 10y USA 3m libor sw ap 10y sw ap Germany 3m euribor 10y sw ap Oct Oct Oct Oct Jan Jan Jan Jan Jul Jul Jul Jul 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 % Sep m 0.68 Stoxx % Dec m 0.81 DAX % Mar m 0.93 Nikkei % Jun OSEBX % Sources to all tables and graphics: Thomson Reuters, Thomson Datastream and DNB Markets Back to index Daily Macro Brief page 18

19 Calendar Thursday Friday Importance GMT+2 Country Event Period Unit Last Cons. DNB Actual Thursday 17 August 01:50 Japan Exports Jul y/y % :50 Japan Imports Jul y/y % :50 Japan Trade Balance Jul JPY bn :30 UK Retail Sales Ex-Fuel Jul m/m % :30 UK Retail Sales Jul m/m % :00 EMU Core CPI, Final Jul y/y % :00 EMU CPI, Final Jul y/y % :30 EMU ECB account of monetary policy meeting 14:30 USA Initial Jobless Claims w/e :30 USA Philly Fed Business Aug Index :15 USA Capacity Utilization Jul m/m % :15 USA Industrial Production Jul m/m % :15 USA Manufacturing Output Jul m/m % USA Fed's Kaplan (voting) speaks Friday 18 August 03:30 China China House Prices Jul y/y % :30 Sweden Capacity Utilization Q2 q/q % :00 USA U. of Mich. Sentiment (Prelim) Aug Index USA Fed's Kaplan (voting) speaks Back to index Daily Macro Brief page 19

20 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 20

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