giovedì 15 settembre 2011

USA: CPI higher than expected in August, Industrial production rose unexpectedly

Negative data came out today in the USA, with the expection of industrial production: 
1) Initial jobless claims rose in the week to September 10th from 417k (revised from) to 428k versus markets expectations at 411k. the 4 week moving average rose by 4k to 419.5k. The data signalled that labour market is likely to remain very week in September after the non-farm payrolls was unchanged in August;
2) The CPI rose more than expected in August: +0.4% m/m versus expectations at +0.2% m/m and the year-over-year change at 3.8% y/y vs +3.6% y/y in July. Moreover the CPI core rose by 0.2% m/m and +2% y/y (+1.8% y/y) in July - the highest since November 2008;
3) The Empire manufacturing index fell from -7.8 to -8.8, indicating a deteriorating of the manufacturing sector perspectives at year-end;          
4) industrial production rose by 0.2% m/m in August versus market expectations at 0.1% m/m. The most positive news is that manufacturing production climbed by 0.5% m/m, led by 2.6% m/m increase in auto production. 
Today's data increase the uncertainty on what the Fed would decide at the end of the next week monetary policy meeting. Indeed while the data on economic activity signalled a weakening of the economic outlook, inflationary pressures remains to high to see a strong easing of monetary policy, as we indicated yesterday in the article "Can The CPI Influence Monetary Policy Decisions?". While the possibility of an easing of monetary policy over the next week are at 50-50, we think that the impact on economic activity will be very low as long term interest are already at historically low level.

mercoledì 14 settembre 2011

Can The CPI Influence Monetary Policy Decisions?

The major central banks are widely expected to further ease monetary policy in the next few months amid the weakening of global economic growth: The Fed may implement a QE3 program, continue on seekingalpha...

martedì 6 settembre 2011

German factory orders lower than expected in July

Factory orders fell by 2.8% m/m in July, led by the 7.4% m/m decline in orders from abroad, while domestic orders rose by 3.6% m/m. Market expectations were for a decline by 1.5% m/m. Compared to the same period 1 year ago factory orders rose by 8.7%. The data is a clear indication that the weakening of international economy is having a negative impact on the German industrial sector, in line with the indications come from the IFO business index.