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Eurozone retail sales dropped -1.8% mom in Oct, EU down -1.7% mom

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    ActionForex.com
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    Eurozone retail sales volume dropped -1.8% mom in October, worse than expectation of -1.6% mom. The volume of retail trade decreased by -2.1% for non-food products and by -1.5% for food, drinks and tobacco, while it grew by 0.3% for automotive fuels.

    EU retail sales volume dropped -1.7% mom. Among Member States for which data are available, the largest monthly decreases in the total retail trade volume were registered in Austria (-4.6%), Croatia (-4.0%) and Belgium (-3.3%). Increases were observed in Luxembourg (+2.6%), Cyprus, Malta and Portugal (all +0.5%) and Spain (+0.4%).

    Full release here.

    Eurozone Sentix investor confidence rose to -21, recession ends before it’s begun

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      ActionForex.com
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      Eurozone Sentix Investor Confidence rose from -30.9 to -21.0 in December, highest since June. Current Situation Index rose from -29.5 to -20.0. Expectations Index rose from -32.3 to -22.0, highest since March.

      Sentix said: “The latest sentix economic data improve again and surprisingly significantly. Investors are spreading hope that thanks to mild winter weather, sufficient gas in storage and a possible peak in inflation data, the economic downturn has also passed its zenith.

      “Internationally, there are also more moderate tones from the US Federal Reserve, which is holding out the prospect of “only” 50 basis points of interest rate increases in December. And in China, the protests finally seem to point to an end to the restrictive Corona measures.

      “So will the recession end before it has really begun?”

      Full release here.

      UK PMI services finalized at 48.8, economic contraction rate held steady

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        ActionForex.com
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        UK PMI services was finalized at 48.8 in November, unchanged from October’s reading, lowest since January 2021, and second second consecutive month of contraction. PMI Composite was finalized at 48.2, unchanged from prior month, and the fourth successive month of contraction.

        Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: “A further economic contraction signalled by the PMI surveys hints at a growing recession risk for the UK. A change of government and its new economic policies may have helped arrested some of the financial market volatility after September’s ‘mini-budget’ but the economic picture remains stubbornly unchanged. ”

        “The overall rate of economic contraction has held steady compared to October, indicative of GDP falling at a quarterly rate of 0.4%. As such, this is the toughest spell the UK economy has faced since the global financial crisis excluding only the height of the pandemic.

        Full release here.

        Eurozone PMI composite finalized at 47.8, downturn remains only modest

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          ActionForex.com
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          Eurozone PMI Services was finalized at 48.5 in November, down from October’s 48.6. That’s also a 21-month low. PMI Composite was finalized at 47.8, up from prior month’s 47.3. Looking at some member countries, Ireland PMI Composite France dropped to 48.8 and 48.7 respectively, both 21-month low. Germany (46.3), Italy (48.9), and Spain (49.6) were at 3-month high.

          Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “A fifth consecutive monthly falling output signalled by the PMI adds to the likelihood that the eurozone is sliding into recession. However, at present the downturn remains only modest, with an easing in the overall rate of contraction in November means so far the region looks set to see GDP contract by a mere 0.2%.”

          Full release here.

          China Caixin PMI services dropped to 46.7, third month of contraction

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            ActionForex.com
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            China Caixin PMI Services dropped from 48.4 to 46.7 in November, below expectation of 48.8. PMI Composite dropped from 48.3 to 47.0, signalling a third successive monthly contraction in business activity. The rate of decline was the strongest since May.

            Wang Zhe, Senior Economist at Caixin Insight Group said: “Manufacturing and services activity contracted in varying degrees, with the services sector hit harder by Covid outbreaks…. The prolonged pandemic has battered the economy. While the third wave has led to a softened slowdown on both supply and demand than the previous ones, there has been significant pain in the job market.”

            Full release here.

            ECB Villeroy backs 50bps hike this month to finish first half of the game

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              ActionForex.com
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              ECB Governing Council member Francois Villeroy de Galhau said in an interview on Sunday, for this month’s meeting, “it’s desirable to bring rates to 2%, so a rise of 0.5 or 50 basis points.”

              Bringing interest rate to 2% will market the first half of the game of normalization. “In the second half of the match, rates will continue to rise but I can’t say where this will stop,” adding the the pace would be slower.

              He also noted it would be “wise to start to reduce (the balance sheet) in 2023, beginning with the APP holdings in the “first half of the year, clearly but cautiously and progressively.”

              BoE Dhingra: Interest rate should peak below 4.5%

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                ActionForex.com
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                BoE MPC member Swati Dhingra said in an Observer interview that interest rate in the UK should peak below 4.5% to avoid deepening and prolonging a recession.

                “You do see a much deeper and a longer recession with rates being much higher. That is what I think we should all be worried about … are we going to end up lengthening and deepening the recession if the tightening continues at the pace it is?” she said.

                She added that those expecting more large rate hikes are not considering the fall in investment and employment as projected for the new two years. “These are not trivial numbers. The market has clearly not realized how pessimistic that could be for the UK economy,” she said. “The economic slowdown is here.”

                 

                Canada employment grew 10.1k, unemployment rate dropped to 5.1%

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                  ActionForex.com
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                  Canada employment grew 10.1k in November, slightly below expectation of 10.5k. Unemployment rate dropped from 5.2% to 5.1%, below expectation of 5.3%. Participation rate dropped -0.1% to 64.8%. Average hourly wages was up 5.6% yoy, staying above 5% level for the sixth consecutive month.

                  Full release here.

                  US non-farm payroll grew 263k, strong wage growth

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                    ActionForex.com
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                    US non-farm payroll employment grew 263k in November, above expectation of 200k. Average job growth was 282k over the prior three months, and 392k thus far in 2022. Unemployment rate was unchanged at 3.7%, matched expectations. Participation rate dropped -0.1% to 62.1%. Wage growth was strong with average hourly earnings up 0.6% mom, versus expectation of 0.3% mom.

                    Full release here.

                    Eurozone PPI at -2.9% mom, 30.8% yoy in Oct

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                      ActionForex.com
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                      Eurozone PPI came in at -2.9% mom, 30.8% yoy in October, versus expectation of -2.0% mom, 31.5% yoy. Industrial producer prices decreased by -6.9% in the energy sector, while prices increased by 0.2% for intermediate goods, by 0.3% for capital goods, by 0.5% for durable consumer goods and by 1.1% for non-durable consumer goods. Prices in total industry excluding energy increased by 0.5%.

                      EU PPI came in at -2.5% mom, 31.2% yoy. The largest monthly decreases in industrial producer prices were recorded in Ireland (-32.5%), Bulgaria (-8.8%) and Denmark (-5.5%), while the highest increases were observed in Greece (+9.6%), Hungary (+6.2%) and Belgium (+2.8%).

                      Full release here.

                      NFP watched as 10-year yield tumbled

                        By
                        ActionForex.com
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                        US non-farm payroll report is a major focus for today. Markets are expecting 200k job growth in the US in November. Unemployment rate is expected to be unchanged at 3.7%. Average hourly earnings is expected to rise 0.3% mom.

                        The significance of today’s set of data might not be as high as earlier expected, after Fed Chair Jerome Powell’s speech two days ago. Powell clearly indicated that it “makes sense” to start slowing the pace of rate hikes, as soon as this month. That is, a 50bps hike is pretty much a done deal.

                        What matter now are the terminal rate of the tightening cycle, and the time to stay there. A month’s job data shouldn’t alter the expectations on these two issues much.

                        A key development to note is the surprised steep decline in 10-year yield overnight. The move away from 55 day EMA is clearly a bearish sign. But 3.483 might provide at least some interim support. Let’s see today’s NFP would trigger a recovery in TNX. If that happens, USD/JPY could also follow for a recovery.

                        BoJ Tamura called for review of monetary framework

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                          ActionForex.com
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                          BoJ board member Naoki Tamura told Asahi daily that a review of monetary framework should be conducted by the central bank. Such review could come “soon or at a somewhat later date”. “Whether the BOJ needs to tweak its monetary policy will depend on the outcome of the review,” he said.

                          Tamura also noted there was scope to review the feasibility of the 2% target, and consider it as a more flexible goal. “As long as the economy is achieving a virtuous cycle, I think it’s okay even if inflation is at, say 1.8%” instead of 2%,” he noted.

                          Fed Williams: Slowing rate hike is just stepping down one step

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                            ActionForex.com
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                            New York Fed President John Williams said yesterday in an interview that slowing the pace of rate hikes in December would simply mean “stepping down one step” in the effort to curb inflation.

                            “I still think we have a ways to go in terms of where the fed funds target is and where we need to get it to next year in order to get the sufficiently restrictive stance,” he said.

                            “Inflation, first of all, is the number one problem we’re facing in terms of monetary policy. It is far too high,” Williams said. And, bring inflation back to 2% target will “take a good couple of years”.

                            But he added: “I expect to see a pretty significant decline in inflation next year as supply chain issues improve, as we see the slowing economy, the economy getting into better balance.”

                            Fed Bowman: Appropriate to slow tightening pace, but terminal rate would be slightly higher

                              By
                              ActionForex.com
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                              Fed Governor Michelle Bowman said she expect ongoing increase in rates at coming meeting. But, it will be “appropriate” to slow the pace of tightening. That will allow policymakers to full assess the impact of their actions.

                              Also, “we’re still seeing extremely high levels of core and CPI inflation,” she said. “Until I see our actions actually having some impact that would lower the rate of inflation, I think my expectation would be a slightly higher” terminal rate than projected back in September.

                              US ISM manufacturing dropped to 49 in Nov, first contraction in 29 months

                                By
                                ActionForex.com
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                                US ISM Manufacturing PMI dropped from 50.2 to 49.0 in November, worse than expectation of 50.5 That’s also the first contraction reading in 29 months since May 2020. Looking at some details, new orders dropped form 49.2 to 47.2. Production dropped from 52.3. to 51.5 Employment dropped from 50.0 to 48.4. Prices dropped from 46.6. to 43.0.

                                ISM said: “The past relationship between the Manufacturing PMI and the overall economy indicates that the Manufacturing PMI for November (49 percent) corresponds to a 0.1-percent increase in real gross domestic product (GDP) on an annualized basis.”

                                Full release here.

                                US initial jobless claims dropped back to 225k

                                  By
                                  ActionForex.com
                                  -

                                  US initial jobless claims dropped -16k to 225k in the week ending November 26, below expectation of 245k. Four-week moving average of initial claims rose 2k to 229k.

                                  Continuing claims rose 57k to 1608k in the week ending November 19. Four-week moving average of continuing claims rose 30k to 1539k.

                                  Full release here.

                                  US PCE slowed to 6.0% yoy in Oct, core PCE down to 5.0% yoy

                                    By
                                    ActionForex.com
                                    -

                                    US personal income rose 0.7% mom to USD 155.3B in October, above expectation of 0.4% mom. Personal spending rose 0.8% mom to USD 147.9B, matched expectations.

                                    For the month, PCE price index rose 0.3% mom, below expectation of 0.5% mom. PCE core (excluding food and energy) rose 0.2% mom, below expectation of 0.4% mom.

                                    From the same month ago, PCE price index slowed from 6.3% yoy to 6.0% yoy, below expectation of 6.0% yoy. PCE core price index slowed from 5.2% yoy to 5.0% yoy, matched expectations. Prices for goods rose 7.2% yoy and prices for services rose 5.4% yoy. Food prices rose 11.6% yoy and energy prices rose 18.4% yoy.

                                    Full release here.

                                    UK PMI manufacturing finalized at 46.5, further contraction, outlook darkened

                                      By
                                      ActionForex.com
                                      -

                                      UK PMI Manufacturing was finalized at 46.5 in November, up from October’s 46.2. S&P Global said intermediate goods remained the weakest performing sector. Business sentiment dipped to the lowest since April 2020. Input price inflation eased to three-month low.

                                      Rob Dobson, Director at S&P Global Market Intelligence, said: “November saw a further contraction of the UK manufacturing sector, as weak demand, declining export sales, high energy prices and component shortages all hit industry hard. The outlook for the sector also darkened, as confidence among manufacturers fell to its lowest level since April 2020. … The trend in new export business was especially weak, as Brexit issues and supply chain stresses exacerbated the effects of a weakening global economic backdrop, leading to lower sales from the US, the EU and China.”

                                      Full release here.

                                      Eurozone PMI manufacturing finalized at 47.1, welcome moderation in downturn intensity

                                        By
                                        ActionForex.com
                                        -

                                        Eurozone PMI Manufacturing was finalized at 47.1in November, up from October’s 46.4. Looking at some member countries, Ireland PMI Manufacturing was at 48.7 (30 mth-low), Italy at 48.4, Greece at 48.4, France at 48., Austria at 46.6, Germany at 46.2, the Netherlands at 46.0 (29-mth low), and Spain at 45.7. All were in contraction.

                                        Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “The PMI signals some welcome moderation in the intensity of the eurozone manufacturing downturn in November, which will support hopes that the region many not be facing a winter downturn as severe as previously anticipated by many. However, the survey’s production index continuing to run at one of the lowest levels recorded over the past decade. At these levels the survey is indicative of a marked annualised rate of contraction of approximately 4%. While official manufacturing data have been more buoyant – and more volatile – in recent months, such weak PMI readings have always been followed by commensurate steep declines in the official statistics.”

                                        Full release here.

                                        Swiss CPI unchanged at 3.0% yoy in Nov

                                          By
                                          ActionForex.com
                                          -

                                          Swiss CPI was unchanged at 3.0% yoy in November, above expectation of 2.6% yoy. Core CPI (excluding fresh and seasonal products, energy and fuel) rose from 1.8% yoy to 1.9% yoy. Domestic product inflation rose from 1.7% yoy to 1.7% yoy. But Imported product inflation slowed from 6.9% yoy to 6.3% yoy.

                                          FSO said: “The stability of the index compared with the previous month is the result of opposing trends that offset each other overall. Prices for housing rentals, gas and fuels increased, as did those for foreign and Swiss red wine. In contrast, prices for heating oil, fruiting vegetables and hotel accommodation decreased.”

                                          Also released, retail sales dropped -2.5% yoy in October, worse than expectation of 3.3% yoy rise.

                                          Full CPI release here.

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