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Swiss GDP grew 0.3% qoq in Q2, strong private consumption

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    ActionForex.com
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    Swiss GDP grew 0.3% qoq in Q2, below expectation of 0.4% qoq. Looking at some details, manufacturing contracted -0.5%. Construction contracted -1.7%. Trade dropped -2.1%. However, accommodation and food grew strongly by 12.4%.

    By expenditure approach, private consumption rose 1.4%. Government consumption was flat. Equipment and software investment rose 2.5%. Exports of goods dropped sharply by -11.5%. Import of goods dropped -0.6% too.

    Full release here.

    China Caixin PMI services dropped to 55 in Aug, PMI composite down to 53

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      ActionForex.com
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      China Caixin PMI Services dropped slightly from 55.5 to 55.0 in August, above expectation of 54.2. Caixin added that business activity growth held close to July’s 15-month high. total new orders rose despite stronger fall in new export business. Optimism around outlook was highest since November.

      Wang Zhe, Senior Economist at Caixin Insight Group said: “In August, the Caixin China General Composite PMI dropped to 53 from 54 the previous month. The reading, while marking the second straight monthly drop, remained in expansionary territory. Both supply and demand continued to expand, albeit at a slower pace, with services outperforming manufacturing. Employment remained weak and input costs experienced the slowest increase in 27 months. Market confidence remained stable.”

      Full release here.

       

      Australia AiG construction rose to 47.9, pull back continued

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        ActionForex.com
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        Australia AiG Performance of Construction Index rose 2.6 pts to 47.9 in August. Activity rose 3.5 to 46.2. Employment dropped -5.3 to 47.7. New orders rose 7.9 to 51.0. Supplier deliveries rose 3.4 to 45.6. Input prices dropped -1.2 to 92.6. Selling prices dropped sharply by -18.6 to 68.5. Average wages rose 1.2 to 77.6.

        Peter Burn, Chief Policy Advisor at Ai Group said: “The pull back of the Australian construction sector continued in August with three of the four industry segments recording falls in activity and employment across the industry dropping in the month…. Builders and constructors link much of the fall in activity to rises in interest rates in recent months….. Softer demand was also reflected in the steep fall in the selling price index even though input prices and wage increases remain elevated.”

        Full release here.

        US NFP grew 315k in Aug, unemployment rate rose 0.2% to 3.7%

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          ActionForex.com
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          US non-farm payroll employment grew 315k in August, slightly above expectation of 300k. Total employment was 240k above the pre-pandemic level.

          Unemployment rose 0.2% to 3.7%, above expectation of 3.5%. Number of unemployed persons increased 344k to 6m. Labor force participation rate rose 0.3% to 62.4%, but remained -1.0% below its pre-pandemic level.

          Average hourly earnings rose 0.3% mom, 5.2% yoy, matched expectations.

          Full release here.

          Eurozone PPI up 4.0% mom, 37.9% yoy in Jul

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            ActionForex.com
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            Eurozone PPI rose 4.0% mom in July, up from June’s 1.3% mom, above expectation of 2.5% mom. For the year, PPI rose 37.9% yoy, accelerated from 36.0% yoy, well above expectation of 35.8% yoy.

            For the month, industrial producer prices increased by 9.0% mom in the energy sector, by 1.2% mom for non-durable consumer goods, by 0.9% mom for durable consumer goods, by 0.8% mom for capital goods and by 0.1% mom for intermediate goods. Prices in total industry excluding energy increased by 0.6% mom.

            EU PPI rose 3.7% mom, 37.8% yoy. The highest monthly increases in industrial producer prices were recorded in Ireland (+26.1%), Hungary (+9.4%) and Bulgaria (+8.0%), while the largest decreases were observed in Portugal (-1.5%), Sweden (-1.2%) and Luxembourg (-0.9%).

            Full release here.

            US to release NFP today, EUR/USD ready for breakout?

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              ActionForex.com
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              The US non-farm payroll day is today. Markets are expecting 290k job growth in August, slowed from July’s 528k. Unemployment rate is forecast to be unchanged at 3.5%. Average hourly earnings growth are expected to slow from 0.5% mom to 0.3% mom.

              Looking at related economic data, ADP reported showed only 132k private job growth, well below expectations of 300k. However, ISM manufacturing employment improved notably from 49.9 to 52.8, back in expansion. Four-week moving average of initial jobless claims ticked down to 247k.

              A disastrous NFP print is not expected today. Anything between 150 and 350k wouldn’t alter the current paths of the markets. However, another month of strong earnings growth should reinforce Fed’s swift tightening path with another 75bps hike this month.

              As for market reactions, a major focus is on whether EUR/USD would finally break out from range to resume larger down trend, and accelerate away from parity.

              BCC expects negative UK GDP growth in Q2, Q3, Q4, inflation to peak at 14%

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                ActionForex.com
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                The British Chambers of Commerce said in a release that the UK economy is expected to “plunge into recession” before the end of 2022, with inflation “spiking to 14%”. Also, “lingering weakness in growth expected to continue into 2024”.

                BCC downgraded UK GDP growth forecast for 2022 from 3.5% to 3.3%. Also, a recession is forecast for the UK this year, with negative economic growth for Q2, Q3, and Q4. It expects the economy to return to 0.2% growth in 2023, and 1% growth in 2024.

                Inflation is projected to reach 14% in Q4 2022, upgraded from prior forecast of 10%. CPI is forecast to slow to 5% in 2023, and then return to BoE’s 2% target in 2024.

                BCC also expects BoE interest rate to increase from 2% in 2022 to 3% in 2023 and 2024.

                Full release here.

                Fed Bostic: Soft landing is a very hard thing to do

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                  ActionForex.com
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                  Atlanta Fed President Raphael Bostic said yesterday that “Inflation is high, inflation is too high and we have got to bring it down to our target… So we have got some work to do. We have got to figure out how fast we are going to move our policy to try to arrest that inflation and to wrestle it back down to 2%.”

                  “When you bring demand down, that has the risk of slowing the economy down so that the economy stops growing, where it loses all of its momentum, and then you might get to a situation that some would describe as recessionary,” he said.

                  He added that soft landing is “a very hard thing to do. I think it’s only happened maybe once or twice in the history of this country. Ultimately that’s the best of all possible worlds.”

                  US ISM manufacturing unchanged at 52.8, prices dropped to 52.5, employment jumped to 54.2

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                    ActionForex.com
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                    US ISM Manufacturing PMI was unchanged at 52.8 in August, slightly above expectation of 52.6. Looking at some details, new orders rose from 48.0 to 51.3. Production dropped from 53.5 to 50.4. Employment jumped from 49.9 to 54.2. Prices dropped sharply from 60.0 to 52.5.

                    ISM said: “Manufacturing performed well for the 27th straight month. With (1) supplier delivery performance recording its fourth straight month of improvement, (2) price increase growth slowing significantly for the second consecutive month, (3) hiring and total employment both positive and expanding and (4) lead times easing across all three categories of purchasing activity, the sector is at or approaching supply/demand equilibrium.”

                    Also, “the past relationship between the Manufacturing PMI and the overall economy indicates that the Manufacturing PMI for August (52.8 percent) corresponds to a 1.4-percent increase in real gross domestic product (GDP) on an annualized basis.”

                    Full release here.

                    US initial jobless claims dropped to 232k

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                      ActionForex.com
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                      US initial jobless claims dropped -5k to 232k in the week ending August 27, below expectation of 250k. Four-week moving average of initial claims dropped -4k to 241.5k.

                      Continuing claims rose 26k to 1438k in the week ending August 20. Four-week moving average of continuing claims rose 4.5k to 1428.5k.

                      Full release here.

                      Eurozone unemployment rate dropped to 6.6% in Jul, EU down to 6.0%

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                        ActionForex.com
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                        Eurozone unemployment dropped from 6.7 to 6.6% in July, matched expectations. EU unemployment dropped from 6.1% to 6.0%.

                        Eurostat estimates that 12.959 million men and women in the EU, of whom 10.983 million in the euro area, were unemployed in July 2022. Compared with June 2022, the number of persons unemployed decreased by 113 000 in the EU and by 77 000 in the euro area. Compared with July 2021, unemployment decreased by 1.854 million in the EU and by 1.576 million in the euro area.

                        Full release here.

                        UK PMI manufacturing finalized at 47.3 in Aug, steepest downturn since first lockdown

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                          ActionForex.com
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                          UK PMI Manufacturing was finalized at 47.3 in August, down sharply from July’s 52.1. That’s also the lowest level in 27 months. S&P Global added that output, new business and new export orders contracted sharply. Still elevated input cost and selling price inflation eased further.

                          Rob Dobson, Director at S&P Global Market Intelligence, said: “August saw the UK manufacturing sector suffer its steepest downturn since the first COVID-19 lockdown. Output and new orders contracted at the fastest rates since May 2020, as inflows of work from both domestic and export markets slumped sharply lower. There were reports of clients postponing, rescheduling or cancelling agreements due to increased economic uncertainties, recession warnings, rising prices and component shortages, while port congestion and Brexit complications constrained export opportunities.”

                          Full release here.

                          Eurozone PMI manufacturing finalized at 49.6 in Aug, downturn likely to intensify potentially markedly

                            By
                            ActionForex.com
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                            Eurozone PMI Manufacturing was finalized at 49.6 in August, down slightly from July’s 49.8. But that’s still a 26-month low. Readings for the Netherlands at 52.6 (22-month low), Ireland at 51.1 (22-month low), France at 50.6 (2-month high) were in expansion. Readings for Spain at 49.9 (2-month high), Germany at 49.1 (26-month low), Austria at 48.8 (20-month low), Greece at 48.8 (20-month low), Italy at 48.0 (26-month low) were in contraction.

                            Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “The euro area’s beleaguered manufacturers reported a further steep drop in production in August, meaning output has now fallen for three successive months to add to the likelihood of GDP falling in the third quarter. Forward-looking indicators suggest that the downturn is likely to intensify – potentially markedly – in coming months, meaning recession risks have risen.

                            Full release here.

                            Swiss CPI rose to 3.5% yoy in Aug, core CPI at 2.0% yoy

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                              ActionForex.com
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                              Swiss CPI rose 0.3% mom in August, slightly below expectation of 0.4% mom. The monthly rise was due to several factors including rising prices for in-patient hospital services, social protection services and housing rentals. CPI core rose 0.3% mom. Domestic product prices rose 0.2% mom. Imported products prices rose 0.6% mom.

                              Comparing with August 2021, CPI rose 3.5% yoy, accelerated from 3.4% yoy, matched expectations. Core inflation came in at 2.0% yoy. Domestic product prices were up 1.8% yoy. Imported product prices were up 8.6% yoy.

                              Full release here.

                              China Caixin PMI manufacturing dropped to 49.5 in Aug

                                By
                                ActionForex.com
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                                China Caixin PMI Manufacturing dropped from 50.4 to 49.5 in August, below expectation of 50.2, back in contraction. Caixin added that output growth slowed as firms faced power supply disruption amid heatwave. New orders declined for the first time in three months. Input costs fell at quickest rate since January 2016.

                                Wang Zhe, Senior Economist at Caixin Insight Group said: “Overall, the Covid-19 flare-ups, the extreme heat wave and restricted power usage resulted in a slight deterioration in overall business conditions in the manufacturing sector. Supply remained stronger than demand, with the latter recording a contraction. The job market remained weak, while lower input costs and output prices eased inflationary pressures. At the same time, firms were cautious about increasing purchases and inventory levels. Market sentiment remained optimistic, although some were worried about the global economic outlook.”

                                Full release here.

                                Japan PMI manufacturing finalized at 51.1 in Aug, dip likely to continue near term

                                  By
                                  ActionForex.com
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                                  Japan PMI Manufacturing was finalized at 51.1 in August, down from July’s 52.1. The health of the sector that was the joint-weakest since February 2021. S&P Global also noted new orders had the sharpest reduction since October 2020. Backlogs of work decreased for the first time in 18 months. Rise in input prices was slowest for 8 months.

                                  Usamah Bhatti, Economist at S&P Global Market Intelligence, said: “Latest PMI data pointed to deteriorating current activity in the Japanese manufacturing sector midway through the third quarter of 2022…. The dip is likely to continue in the near term… A benefit that has come from softer demand conditions is that pressure on supply chains has been given the opportunity to ease.”

                                  Full release here.

                                  Australia AiG manufacturing dropped to 49.3, back in contraction

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                                    ActionForex.com
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                                    Australia AiG Performance of Manufacturing Index dropped from 52.5 to 49.3 in August, indicating the first contraction since January. Production fell -1.8 pts to 45.7. Employment dropped -2.6 to 47.5. New orders dropped -4.1 to 55.8. Exports dropped -4.3 to 46.9. Sales tumbled -8.8 to 45.2. Input prices rose 2.0 to 81.7. Selling prices rose 4.6 to 69.1. Average wages rose 11.3 to 74.1.

                                    Innes Willox, Chief Executive of Ai Group said: “The Ai Group Australian PMI for August points to the end of the recent expansion of manufacturing activity. Production, employment and sales were all down in August and most manufacturing sectors reported lower performance in the month…. Prices and wages continued to push higher and with the Reserve Bank seeking to ease these pressures by raising interest rates, further slowing in manufacturing looks increasingly likely over the coming months.”

                                    Full release here.

                                    Fed Mester expects rates above 4% by early next year, and hold it there

                                      By
                                      ActionForex.com
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                                      Cleveland Fed President Loretta Mester said, “my current view is that it will be necessary to move the fed funds rate up to somewhat above 4 percent by early next year and hold it there; I do not anticipate the Fed cutting the fed funds rate target next year.”

                                      “It would be a mistake to declare victory over the inflation beast too soon. Doing so would put us back in the stop-and-go monetary policy world of the 1970s, which was very costly to households and businesses,” she added.

                                      Canada GDP grew 0.1% mom in Jun, but to contract -0.1% mom in Jul

                                        By
                                        ActionForex.com
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                                        Canada GDP grew 0.1% mom in June, matched expectations. Services-producing industries grew 0.2% mom while goods- producing industries rose 0.1% mom. 14 of 20 industrial sectors expanded in the month.

                                        Advance information indicates that real GDP edged down by -0.1% mom in July. Output was down in the manufacturing, wholesale, retail trade and utilities sectors. Declines were partly offset by increases in the mining, quarrying, oil and gas sector and the agriculture, forestry, fishing and hunting sector.

                                        Full release here.

                                        US ADP employment grew 132k, a shift towards more conservative hiring pace

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                                          ActionForex.com
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                                          US ADP private employment grew 132k in August, well below expectation of 300k. By sector, goods-producing jobs grew 23k. Services-providing jobs grew 110k. By company size, small businesses added 25k jobs, medium added 53k, large added 54k. Annual pay was up 7.6%.

                                          “Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals,” said Nela Richardson, chief economist, ADP. “We could be at an inflection point, from super-charged job gains to something more normal.”

                                          Full release here.

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