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US ISM manufacturing dropped to 50.2, prices decreasing for the first time since May 2020

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    ActionForex.com
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    US ISM Manufacturing PMI dropped slightly from 50.9 to 50.2 in October, a touch above expectation of 50.0. Looking at some details, new orders rose 2.1 to 49.2. Production rose 1.7 to 52.3. Employment rose 1.3 to 50.0. Supplier deliveries dropped -5.6 to 46.8. Inventories dropped -3.0 to 52.5. Prices dropped -5.1 to 46.6.

    ISM noted that price index indicated decreasing prices for the first time since May 2020. Mentions of large-scale layoffs were absent from panelists’ comments, indicating companies are confident of near-term demand. Overall, the PMI corresponds to a 0.5% annualized growth in real GDP.

    Full release here.

    UK PMI manufacturing finalized at 46.2, suffered a further decline

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      ActionForex.com
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      UK PMI Manufacturing was finalized at 46.2 in October, down from September’s 48.4. That’s the lowest level in 29 months, and the reading has been below 50 mark for three consecutive months.

      S&P Global noted that output, new orders and new export business all declined. Job cuts were registered for the first time in almost two years. Input cost and selling price inflation eased slightly.

      Rob Dobson, Director at S&P Global Market Intelligence, said: “UK manufacturing production suffered a further decline at the start of the fourth quarter, with the sector buffeted by weak demand, high inflation, supply-chain constraints and heightened political and economic uncertainties…. The darkening situation also knocked business optimism down to a two-and-a-half year low… On current form manufacturing is in no position to help prevent the broader UK economy from sliding into recession.”

      Full release here.

      RBA Lowe: We need to strike the right balance between doing too much and too little

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        ActionForex.com
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        RBA Governor Philip Lowe said in a speech that the earlier large 50bps rate hikes wereto “move interest rates quickly away from their pandemic levels to address the rapidly emerging inflation problem.”

        As interest rates moved back to “more normal levels”, the board judged that it’s “appropriate to move at a slower pace”, with 25bps hike today, and at last meeting.

        “We are conscious that interest rates have been increased by a large amount in a very short period of time and that higher interest rates affect the economy with a lag,” he added. “If we are to stay on that narrow path, we need to strike the right balance between doing too much and too little.”

        Lowe also noted that RBA is “not on a pre-set path”. “If we need to step up to larger increases again to secure the return of inflation to target, we will do that,” he added. “Similarly, if the situation requires us to hold steady for a while, we will do that.

        Full speech here.

        Swiss SECO consumer confidence fell to fresh record low at -47

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          ActionForex.com
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          Swiss SECO Consumer Confidence fell further from -42 to -47 in Q4, below expectation of -43. That’s the record low level since the survey began in 1972.

          Looking at some details, expected economic development dropped from -53.5 to -57.2, far below long-term average of -9. Past financial situation dropped from -35.1 to -39.7, a historic low. Expected financial situation dropped sharply from -34.8 to -46.9, also a new low. Major purchases improved slightly from -43.3 to -42.4.

          Full release here.

          ECB Lagarde: We are not done with tightening yet

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            ActionForex.com
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            ECB President Christine Lagarde said in an interview, “Inflation is still far too high in the euro area as a whole… Higher energy and food prices are still the main drivers of price increases. We are increasingly seeing that these higher energy costs are feeding through to more and more sectors in the economy.”

            “We expect to raise interest rates further to make sure that inflation returns to our medium-term target of 2% in a timely manner,” she added.

            “Since July we have raised interest rates by 200 basis points – the fastest increase in the history of the euro,” she said. “But we are not done yet. We will decide on future policy steps meeting by meeting, each time assessing how the outlook for the economy and inflation has evolved, also considering how the measures we have taken so far are working.”

            She admitted that the “likelihood of a recession has increased and uncertainty remains high.” But ultimately, “persistently high inflation rates are more damaging to society because they make everybody poorer.”

            Full interview here.

            China Caixin PMI manufacturing recovered to 49.2, impact of Covid controls lingered

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              ActionForex.com
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              China Caixin PMI Manufacturing rose from 48.1 to 49.2 in October, above expectation of 49.0. Caixin noted that output and new orders fell again as COVID-19 containment measures continued. Selling prices fell for the sixth consecutive month. Business confidence edged up slightly.

              Wang Zhe, Senior Economist at Caixin Insight Group said: “Overall, the negative impact of Covid controls on the economy lingered. In October, supply, domestic and overseas demand, and employment in the manufacturing sector all contracted, but the rates of contraction slowed from the previous month. Costs rose slightly, and cuts to output prices were still common. Logistics and transportation were still sluggish, and companies’ purchases and inventories rose slightly. Market sentiment improved, but optimism remained limited from a long-term perspective.

              Full release here.

              Japan PMI manufacturing finalized at 50.7, but business remained optimistic

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                ActionForex.com
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                Japan PMI Manufacturing was finalized at 50.7 in October, slightly down from September’s 50.8. That’s the lowest level in 21 months. S&P Global noted that inflationary pressure remained severer. Business remained optimistic with sentiment at nine-month high.

                Laura Denman, Economist at S&P Global Market Intelligence, said:

                “The latest survey data signalled that Japan’s manufacturing sector lost further momentum in October. Sluggish markets and weaker demand conditions, on both a domestic and international level, became a recurring trend throughout the report and were seemingly the driving forces behind the slower sector performance. Anecdotal evidence suggested that worsening conditions in China and South Korea were specifically detrimental to Japan’s exports this month.

                “Meanwhile, inflationary pressures remained severe in October. Japanese manufacturing firms increased their selling prices more aggressively, as signalled by a near-record rate of output cost inflation. Given the current conditions in some of Japan’s key export markets, and with inflationary pressures displaying limited signs of easing, demand is likely to remain subdued in the coming months.

                “Despite this, firms seem unfazed by the challenges that the sector is currently facing remaining optimistic towards their 12-month outlook on growth in October. In fact, the degree of confidence accelerated from September and reached a nine-month high.”

                Full release here.

                RBA hikes 25bps, rates to rise further over the period ahead

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                  ActionForex.com
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                  RBA raises cash rate target by 25bps to 2.85% as widely expected. It maintains tightening bias and expects to “increase interest rates further over the period ahead”. The size and timing of future rate hikes will be determined by incoming data and the outlook for inflation and labor market.

                  The central bank expects inflation to “further increase” over the months ahead and peak at around 8% this year. CPI inflation is forecast to be around 4.75% over 2023 and a little above 3% over 2024. GDP growth forecast was “revised down a little” to 3% this year, 1.50% in 2023 and 2024. Unemployment rate is forecast to rise gradually from current 3.5% to a little above 4% in 2024 as economic growth slow.

                  Full statement here.

                  ECB Visco: High uncertainty calls for gradual tightening

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                    ActionForex.com
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                    ECB Governing Council member Ignazio Visco said that interest rate will have to rise further to reduce the risk of persistent high inflation

                    However, he’s uncertain on the pace of tightening, in face of economic risks. Also, the terminate rate of “can’t be predetermined” due to the uncertain nature of economic forecasting amid Russia’s war in Ukraine.

                    “The high level of uncertainty calls for a gradual approach, carefully assessing the appropriateness of the monetary stance on the basis of evidence as it becomes available,” he said.

                    Eurozone GDP growth slowed to 0.2% qoq in Q3

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                      ActionForex.com
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                      Eurozone GDP grew 0.2% qoq in Q3, slightly above expectation of 0.1% qoq, but much slower than Q2’s 0.8% qoq. EU GDP grew 0.2% qoq too, slowed from Q2’s 0.7% qoq.

                      Among the Member States for which data are available for the third quarter of 2022, Sweden (+0.7%) recorded the highest increase compared to the previous quarter, followed by Italy (+0.5%), Portugal and Lithuania (both +0.4%). Declines were recorded in Latvia (-1.7%) as well as in Austria and Belgium (both -0.1%). The year-on-year growth rates were positive for all countries except for Latvia (-0.4%).

                      Full report here.

                      Eurozone CPI rose to 10.7% yoy in Oct, core CPI up to 5.0% yoy

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                        ActionForex.com
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                        Eurozone CPI accelerated from 9.9% yoy to 10.7% yoy in October, above expectation of 9.9% yoy. CPI core (all-items ex energy, food, alcohol & tobacco also rose from 4.8% yoy to 5.0% yoy, above expectation of 4.8% yoy.

                        Looking at the main components, energy is expected to have the highest annual rate in October (41.9%, compared with 40.7% in September), followed by food, alcohol & tobacco (13.1%, compared with 11.8% in September), non-energy industrial goods (6.0%, compared with 5.5% in September) and services (4.4%, compared with 4.3% in September).

                        Full release here.

                        China PMI manufacturing and services fell to contraction

                          By
                          ActionForex.com
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                          China PMI Manufacturing fell from 50.1 to 49.2 in October, below expectation of 50.0.

                          PMI Non-Manufacturing dropped from 50.6 to 48.7, below expectation of 50.2. Both readings were below 50-mark which separates growth from contraction on a monthly basis.

                          “In October, affected by the spread of the pandemic and other factors within the country, China’s PMI fell, with the manufacturing PMI, non-manufacturing PMI and comprehensive PMI standing at 49.2 per cent, 48.7 per cent and 49.0 per cent, respectively, and the foundation of China’s economic recovery needs to be further consolidated,” said senior NBS statistician Zhao Qinghe.

                          “In October, the composite PMI stood at 49.0 per cent, down 1.9 percentage points from the previous month, falling below the critical point, indicating a general slowdown in the production and operating activities of Chinese enterprises.”

                          Australia retail sales rose 0.6% mom in Sep

                            By
                            ActionForex.com
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                            Australia retail sales rose 0.6% mom in September, matched expectations.

                            Ben Dorber, ABS head of retail statistics said, “This month’s rise was again driven by the combined strength in the food industries. Food retailing rose 1.0 per cent, while cafes, restaurants, and takeaway food services rose 1.3 per cent.

                            “Many retailers remained open for the National Day of Mourning, an additional one-off public holiday in September, and this boosted spending on food, alcohol and dining out.”

                            Full release here.

                            Japan industrial production dropped -1.6% mom, as auto-related production dived

                              By
                              ActionForex.com
                              -

                              Japan industrial production declined -1.6% mom in September, below expectation of -1.0% mom. That’s also the first contract in four months. The fall was driven by -12.4% mom decline in auto-related production, the steepest fall in eight months.

                              Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to fall another -0.4% in October and then rise 0.8% in November.

                              Retail sales rose 4.5% yoy in September, above expectation of 4.1% yoy.

                              ECB Knot: We’re not in even half-time yet in inflation fight

                                By
                                ActionForex.com
                                -

                                ECB GoverningCouncil member Klaas Knot said on Sunday, “we will take a significant interest step again in December,” adding that next hike would either be 50bps or 75bps.

                                He said, “we are not in even half-time yet” in the fight against inflation. “We are still returning interest rates towards their neutral level, for which we will also need the December meeting.”

                                “From 2023 we will play the second half, with smaller interest rate steps and by shrinking our balance sheet,” he said. “Then we will be in the zone where we will effectively cool down the economy, which is necessary to bring inflation down from 10% to 2% in the next 18 to 24 months.”

                                US PCE price index unchanged at 6.2% yoy, core CPI rose to 5.1% yoy

                                  By
                                  ActionForex.com
                                  -

                                  US personal income rose 0.4% mom or USD 78.9B in September, above expectation of 0.3% mom. Spending rose 0.6% or USD 113.0B, above expectation of 0.4% mom.

                                  Headline PCE price index rose 0.3% mom, while core PCE price index rose 0.5% mom. Prices for goods dropped -0.1% mom while prices for services rose 0.6% mom. Food prices increased 0.6% mom and energy prices dropped -2.4% mom.

                                  From the same month a year ago, PCE price index was unchanged at 6.2% yoy, above expectation of 5.8% yoy. Core PCE price index rose to 5.1% yoy, up from 4.9% yoy, below expectation of 5.2% yoy. Prices for goods rose 8.1% yoy while prices for services rose 5.3% yoy. Food prices rose 11.9% yoy and energy prices rose 20.3% yoy.

                                  Full release here.

                                  Canada GDP grew 0.1% mom in Aug, above expectations

                                    By
                                    ActionForex.com
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                                    Canada GDP rose 0.1% mom in August, above expectation of 0.0% mom. Services-producing industries grew 0.3% mom but goods-producing industries contracted -0.3%). 14 of 20 industrial sectors grew.

                                    Advance information indicates that GDP growth continued in September by 0.1% mom. With that, GDP growth reached 0.4% in Q3.

                                    Full release here.

                                    Eurozone economic sentiment dropped to 92.5, EU down to 90.9

                                      By
                                      ActionForex.com
                                      -

                                      Eurozone Economic Sentiment Indicator fell from 93.6 to 92.5 in October. Industrial confidence dropped form -0.3 to -1.2. Services confidence dropped from 4.4 to 1.8. Consumer confidence improved from -28.8 to -27.6. Retail trade confidence rose from -8.4 to -6.9. Construction confidence rose from 1.8 to 2.6. Employment Expectations Indicator dropped from 106.6 to 104.9.

                                      EU Economic Sentiment Indicator dropped from 92.4 to 90.9. Amongst the largest EU economies, the ESI fell in Germany (-1.0) and Italy (-0.9), while it remained essentially unchanged in the Netherlands (-0.3) and France (0.0) and improved in Poland (+0.4) and Spain (+1.4).

                                      Full release here.

                                      Germany GDP grew 0.3% qoq in Q3, avoided contraction

                                        By
                                        ActionForex.com
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                                        Germany GDP grew 0.3% qoq in Q3, much better than expectation of -0.2% qoq contraction. The economy finally exceeded pre-pandemic level in Q4 2019 for the first time.

                                        Destatis said, “The German economy managed to hold its ground despite difficult framework conditions of the global economy, with the continuing Covid-19 pandemic, supply chain interruptions, rising prices and the war in Ukraine. The economic performance in the third quarter of 2022 was mainly based on private consumption expenditure.”

                                        Full release here.

                                        Swiss KOF dropped to 90.9, economic outlook remains subdued

                                          By
                                          ActionForex.com
                                          -

                                          Swiss KOF Economic Barometer decreased from 93.8 to 90.9 in October, below expectation of 93.0. The index is now below its long-term average for the sixth month in a row. Outlook for the economy in the coming months “remains subdued”.

                                          KOF said: “The downward movement of the barometer is primarily driven by bundles of indicators from the manufacturing as well as the accommodation and food service activities sectors. Indicators for the construction sector, the financial and insurance services, and private consumption remained almost unchanged compared to the previous month. By contrast, indicators for the sector other services showed a slightly positive trend.”

                                          Full release here.

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