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UK PMI manufacturing finalized at 58.1 in Nov, but industry in a vulnerable position

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    ActionForex.com
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    UK PMI Manufacturing was finalized at 58.1 in November, up from October’s 57.8, hitting a 3-month high. Markit said output growth edged higher as domestic order intakes rose. New export business fell for the third straight month.

    Rob Dobson, Director at IHS Markit, said: “The current mix of supply-side constraints, cost increases, skill shortages and rising demand for labour will add to the expectations of an imminent rate increase by the central bank, but the survey highlights how the subdued rate of manufacturing growth and export decline leaves industry in a vulnerable position to any new headwinds, not least the Omicron variant.”

    Full release here.

    Eurozone PMI manufacturing finalized at 58.4 in Nov, strong headline reading masks tough business conditions

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      ActionForex.com
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      Eurozone PMI Manufacturing was finalized at 58.4 in November, slightly up from October’s 58.3. Markit said stocks of purchases rose at strongest rate on record as firmed built safety buffers. Output price inflation hit fresh record while supplier performance deteriorated rapidly once again.

      Looking as some member states, Italy PMI manufacturing rose to record high at 62.8. Others, except France at 55.9 (3-month high), dropped, but readings remained high, including the Netherlands at 60.7 (9-month low), Ireland at 59.9 (8-month low), Greece at 58.8 (2-month low), Austria at 58.1 (10-month low), Germany at 57.4 (10-month low), and Spain at 57.1 (8-month low).

      Chris Williamson, Chief Business Economist at IHS Markit said:

      “A strong headline PMI reading masks just how tough business conditions are for manufacturers at the moment. Although demand remains strong, as witnessed by a further solid improvement in new order inflows, supply chains continue to deteriorate at a worrying rate. Shortages of inputs have restricted production growth so far in the fourth quarter to the weakest seen over the past year and a half…

      “… Looking ahead, rising COVID-19 infection rates cast a darkening cloud over the near-term outlook, threatening to further disrupt supply chains while at the same time diverting spending from consumer services to consumer goods again, therefore worsening the imbalance of supply and demand.”

      Full release here.

      Germany PMI manufacturing finalized at 57.4 in Nov, Another month of constrained manufacturing production

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        ActionForex.com
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        Germany PMI Manufacturing was finalized at 57.4 in November, down from October’s 57.8. Markit noted that input shortages held back output and, to a lesser extent, new orders. Rising energy costs helped drive new record increase in output prices. Business expectations improved for the first time in five months.

        Phil Smith, Associate Economics Director at IHS Markit, said:

        “November data signalled another month of constrained manufacturing production levels across Germany, as firms continued to have difficulty sourcing critical inputs and keeping up with demand. The survey’s output index did at least steady in November after being in free fall in recent months, possibly helped by fewer supply delays and firms’ recent efforts to accumulate greater safety stocks.

        “However, the supply situation will likely need to improve a lot more before we see any real take-off in manufacturing production.

        “While manufacturing output remains subdued, the opposite is true of factory gate prices which continue to sky-rocket, with November seeing the rate of charge inflation hitting to a new survey-high.

        “Manufacturing expectations in November withstood the continued surge in prices, and even the fourth wave of COVID-19 infections, to move to a three-month high. The emergence of the Omicron variant poses more uncertainties, however, including a risk of fresh supply-chain disruption.”

        Full release here.

        France PMI manufacturing finalized at 55.9 in Nov, tentative signs of stabilization

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          ActionForex.com
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          France PMI Manufacturing was finalized at 55.9 in November, up from October’s 53.6. That’s the first increase since May. Markit noted that output volumes were broadly unchanged during the month. Demand improved, but remained subdued amid supply-related constraints. Output price inflation reached new high.

          Joe Hayes, Senior Economist at IHS Markit, said: “Tentative signs of stabilisation were seen in the French Manufacturing PMI during November, with the growth slowdown seen since post-pandemic growth peaked back in May finally coming to a halt. The headline PMI posted its first increase for six months as trends improved in output, new orders and employment.

          “That said, beyond this positive direction change, the latest data continued to show intense supply-related constraints impeding manufacturing production, denting order book volumes and adding further pressure on margins. As a result, output prices were raised to the greatest extent since this data were first published back in 2002. While demand conditions have slowed, anecdotal evidence has thus far suggested this to be a symptom on component shortages, causing firms to postpone and cancel orders until supplies improve. We’re not seeing much evidence that higher prices are a factor in causing demand to soften, which means elevated rates of inflation may not prove so transitory as many anticipate.”

          Full release here.

          BoJ Adachi: Concern over spread of a new variant is increasing

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            ActionForex.com
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            BoJ board member Seiji Adachi said in a speech, the number of new coronavirus case in Japan is seeing “great improvement”, with weekly average decline to a “considerable extent recently”. However, “the situation warrants careful attention, as concern over the spread of a new variant is increasing at the moment.”

            He added BoJ will “closely monitor the impact of COVID-19 and will not hesitate to take additional easing measures if necessary, with a view to supporting firms’ ability to sustain their businesses”,

            “If the number of COVID- 19 cases resurges and it once again becomes inevitable to have public health measures in place, for example, it could become necessary to support corporate financing.”

            “The role of the COVID-19 Special Operations largely depends on developments relative to the pandemic, so it is necessary to assess such developments and their impact on corporate financing when deliberating on the next steps.”

            Full speech here.

            S&P 500 tumbled on hawkish Powell, pressing 55 D EMA

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              ActionForex.com
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              US stocks dropped sharply overnight following surprisingly hawkish comments from Fed Chair Jerome Powell. In short, he said that “the threat of persistently higher inflation has grown”. More importantly, Fed is “going to have a conversation at our next meeting about accelerating the taper and ending our asset purchases a few months early”.

              More on Fed: Hawkish Powell Expects Fed to End QE Tapering a Few Months Earlier than Previously Anticipated

              S&P 500 dropped -1.90% to close at 4567.0 and it’s now pressing 55 day EMA (now at 4564.0). Sustained break there will align the outlook with DOW, and indicates that 4743.83 is a medium term top.

              In this case, SPX could have already started a correction to whole up trend from 3233.94. Deeper decline could then be seen back to 38.2% retracement of 3233.94 to 4743.83 at 4167.05. For now, risk will stay on the downside as long as 4743.83 resistance holds, in case of recovery.

              China Caixin PMI manufacturing dropped to 49.9, recovery not solid

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                ActionForex.com
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                China Caixin PMI Manufacturing dropped from 50.6 to 49.9 in November, below expectation of 50.5. Caixin added that output rose for the first time in four months as power supply issues unwound. But total new orders fell slightly. Inflationary pressures eased markedly.

                Wang Zhe, Senior Economist at Caixin Insight Group said: “To sum up, the manufacturing sector remained stable overall in November. Increased downward pressure and easing inflationary pressure were prominent features of the economic situation…. After the shortage of power was alleviated, the supply side began to recover. But due to weak demand, the supply recovery was limited, and the foundation of the recovery was not solid.”

                Full release here.

                Japan PMI manufacturing finalized at 54.5 in Nov

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                  ActionForex.com
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                  Japan PMI Manufacturing was finalized at 54.5 in November, up from October’s 53.2. That’s the best reading since January 2018, and the 10th consecutive month of overall growth. Markit noted that output and new orders rose at faster rates. There was sharp rise in cost burdens amid sustained supply chain disruption. Businesses reported strong optimism regarding future output.

                  Usamah Bhatti, Economist at IHS Markit, said: “Anecdotal evidence indicated supply chain disruption continued to hinder activity within the sector. Firms recorded a sustained and marked deterioration in lead times in November. Moreover, material shortages and logistical disruptions contributed to a rapid rise in average cost burdens, as input prices rose at the fastest pace since August 2008.

                  “Beyond the immediate future, Japanese manufacturers remained confident that output would rise over the coming 12 months. Firms were hopeful that an end to the COVID-19 pandemic would accelerate the launch and mass production of new products, amid a broad-based boost to demand in both domestic and international markets. This is in line with the IHS Markit forecast of a 5.3% rise in industrial production in 2022.”

                  Full release here.

                  Australia AiG manufacturing rose to 54.8, grew more decisively

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                    ActionForex.com
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                    Australia AiG Performance of Manufacturing Index rose 4.4 pts to 54.8 in November. Looking at some details, production rose 4.7 to 52.5. Employment rose 2.0 to 50.0. New orders rose 1.0 to 59.3. Supplier deliveries rose 12.2 to 53.4. Input prices dropped -3.5 to 78.3. Selling prices rose 4.2 to 68.1. Average wages dropped -1.3 to 62.4.

                    Ai Group Chief Executive Innes Willox said: “The Australian manufacturing industry grew more decisively in November after a few flat months during which the south-east corner of the country was held back by the delta outbreaks and associated activity restrictions and while the states and territories tightened barriers to the movement of people.”

                    Full release here.

                    Australia GDP contracted -1.9% qoq in Q3, back below pre-pandemic level

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                      ActionForex.com
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                      Australia GDP contracted -1.9% qoq in Q3, better than expectation of -2.7% qoq. Through the year, GDP was up 3.9%.

                      Acting Head of National Accounts at the ABS, Sean Crick said: “Domestic demand drove the fall, with prolonged lockdowns across NSW, Victoria and the ACT resulting in a substantial decline in household spending.

                      “The fall in domestic demand was only partly offset by growth in net trade and public sector expenditure. GDP in the September quarter 2021 was 0.2 per cent below the December quarter 2019 pre-pandemic level.”

                      Full release here.

                      Dollar rebounds as Fed will discuss wrapping up tapering sooner

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                        ActionForex.com
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                        Dollar rebounds strongly after surprising hawkish comments from Fed Chair Jerome Powell. In a hearing with the Senate Banking Committee, he said, “At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases … perhaps a few months sooner.’ He added, “I expect that we will discuss that at our upcoming meeting.”

                        “The word transitory has different meanings for different people. To many it carries a sense of short-lived. We tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation,” Powell said. “I think it’s probably a good time to retire that word and try to explain more clearly what we mean.”

                        EUR/USD tumbles sharply on the news, after breaching 1.1373 resistance very briefly. Attention is now on whether selling would gather momentum to push it through 1.1182 to resume the larger down trend from 1.2348.

                        US consumer confidence dropped to 109.5 in Nov

                          By
                          ActionForex.com
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                          US Conference Board Consumer Confidence dropped from 111.6 to 109.5 in November, below expectation of 110.8. Present Situation Index dropped from 145.5 to 142.5. Expectations Index dropped from 89.0 to 87.6.

                          “Consumer confidence moderated in November, following a gain in October,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

                          “Expectations about short-term growth prospects ticked up, but job and income prospects ticked down. Concerns about rising prices—and, to a lesser degree, the Delta variant—were the primary drivers of the slight decline in confidence. Meanwhile, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months decreased.

                          “The Conference Board expects this to be a good holiday season for retailers and confidence levels suggest the economic expansion will continue into early 2022. However, both confidence and spending will likely face headwinds from rising prices and a potential resurgence of COVID-19 in the coming months.”

                          Full release here.

                          BoE Mann: Premature to even talk about timing of rate hike

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                            ActionForex.com
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                            BoE policy maker Catherine Mann said in an online event, “there’s still a lot of information to come in, especially with regard to omicron, so it is premature to even talk about timing (of rate hike), much less how much.”

                            “It’s a particular question mark here as to whether or not that (Omicron) is going to reduce consumer confidence and leave us again in a situation of somewhat of a slacker demand for spending than we might have thought going forward,” she noted.

                            Canada GDP grew 0.1% mom in Sep, to grow further 0.8% in Oct

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                              ActionForex.com
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                              Canada GDP grew 0.1% mom in September, matched expectations. Overall 12 of 20 industrial sectors were up. Growth in services-producing industrials (+0.4%) more than offsetting a decline in goods-producing industries (-0.6%).

                              Preliminary information indicates that real GDP rebounded in October, up 0.8% with increases in most sectors.

                              Full release here.

                              Eurozone CPI surged to record 4.9% yoy in Nov, core CPI rose to 2.6% yoy

                                By
                                ActionForex.com
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                                Eurozone CPI accelerated to 4.9% yoy in November, up from 4.1% yoy, well above expectation of 4.4% yoy. That’s the highest level on record in the 25 years of the series’s history. CPI core accelerated to 2.6% yoy, up from 2.0% yoy, above expectation of 2.3% yoy.

                                Looking at the main components of inflation, energy is expected to have the highest annual rate (27.4%, compared with 23.7% in October), followed by services (2.7%, compared with 2.1% in October), non-energy industrial goods (2.4%, compared with 2.0% in October) and food, alcohol & tobacco (2.2%, compared with 1.9% in October).

                                Full release here.

                                Swiss KOF dropped to 108.5, a step further back to long term average

                                  By
                                  ActionForex.com
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                                  Swiss KOF economic barometer dropped to 108.5 in November, down from 110.2, below expectation of 109.0.

                                  KOF said: “The KOF economic barometer moves one step further towards its long-​term average shortly before the end of the year. The high-​flying of the barometer, which was observed in the middle of the year, is being cushioned by a further corrective movement. However, the barometer remains above its long-​term average. The prospects for the Swiss economy remain positive, given that economic activity is not impaired by a recurring spread of the virus.”

                                  Full release here.

                                  France CPI surged to 2.8% yoy, household consumption dropped -0.4% mom

                                    By
                                    ActionForex.com
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                                    France CPI surged to 2.8% yoy in November, following 2.6% yoy in October. HICP inflation also jumped to 3.4% yoy, up from 3.2% yoy. That’s also the highest level since 2008.

                                    “This inflation for us today is temporary, it is linked to strong demand, itself linked to a recovery that is much stronger than we anticipated,” Finance Minister Bruno Le Maire said.

                                    Household consumption expenditure on goods in volume dropped -0.4% mom in October, versus expectation of 0.3% mom rise. Consumption remained below 01.8% below its pre-crisis level in Q4 2019. The contraction was mainly due to a sharp drop in consumption of manufactured goods (-1.8%). It is partially offset by the recovery in consumption of food (+0.7%) and energy (+1.0%).

                                    Also released, GDP was finalized at 3.0% qoq in Q3, unrevised.

                                    China PMI manufacturing rose to 50.1, non-manufacturing dropped to 52.3

                                      By
                                      ActionForex.com
                                      -

                                      China official PMI Manufacturing rose from 49.2 to 50.1 in November, above expectation of 49.6. PMI Non-Manufacturing dropped from 52.4 to 52.3, below expectation of 53.0. PMI Composite rose from 50.8 to 52.2.

                                      “A series of policy measures to ensure energy supply and stabilize market prices have borne some fruits. The tight supply of electricity eased while prices of some raw materials dropped significantly in November,” said Zhao Qinghe, a senior NBS statistician.

                                      Japan industrial production rose 1.1% mom in Oct, more growth expected in Nov and Dec

                                        By
                                        ActionForex.com
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                                        Japan industrial production rose 1.1% mom in October, below expectation of 1.8% mom. That’s nonetheless the first rise in four months.

                                        The seasonally adjusted index of production at factories and mines stood at 90.5 against the 2015 base of 100. The index of industrial shipments increased 2.0% to 88.3 while that of inventories was up 0.8% at 98.9.

                                        The Ministry of Economy, Trade and Industry expects industrial production to grow 9.0% mom in November and then 2.1% mom in December.

                                        Unemployment rate dropped from 2.8% to 2.7% in October, better than expectation of 2.8%.

                                        New Zealand ANZ business confidence finalized at -16.4 in Nov

                                          By
                                          ActionForex.com
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                                          New Zealand ANZ business confidence was finalized at -16.4 in November, down from October’s -13.4. Own activity outlook dropped from 21.7 to 15.0. Looking at some more details, export intentions rose from 8.6 to 9.5. Investment intentions rose from1 3.8 to 16.3. Employment intentions rose from 10.9 to 15.8. Cost expectations rose from 87.2 to 88.7. Pricing intentions rose from 65.5 to 66.5. Inflation expectations rose from 3.45% to 4.24%.

                                          ANZ said. “It’s an uncertain time for the New Zealand economy…. the global COVID situation has taken a turn as well with the uncertain implications of the new Omicron variant. Costs are rising and firms aren’t confident they’ll be able to maintain their profit margins. But in the bigger picture, demand is solid with jobs plentiful, Auckland is nearly out of lockdown, and there’s a plan to reopen the border, as long as the new variant doesn’t turn out to be a game changer…. it’s a mixed bag, yes, but overall things are still ticking along pretty well. Here’s hoping COVID doesn’t throw a curve ball.”

                                          Full release here.

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