Market insight

US: ADP Employment change (April): 192k vs 183k expected (prior: 208k revised from 184k)

• Prior month data were revised higher and the month under review offered modest decrease in jobs creations.
• Creations remained sustained in all categories of firms (from small to large firms); services have shown 145 k new jobs and 47 k in the manufacturing sector.

 

US: Manufacturing PMI (April): 50 vs 49.9 expected (prior: 51.9)

• Final data have pointed towards more modest decline in business sentiment than estimated and the index remained at 50.
• New orders have decreased on more cautious demand, but production and exports remained positive as well as employment.
• Costs were on the rise (raw material prices) but final prices have increased moderately.

 

US: Construction spending (March): -0.2% m/m vs 0.3% expected (prior: 0% revised from -0.3%)

• Construction has decreased over the month driven by large contraction in private residential construction; public construction remained positive.

 

US: JOLTS Job Openings (March): 8488k vs 8680k expected (prior: 8813k revised from 8756k)

• Jobs openings have decreased notably for business services and health care from the prior month; they remained sustained for leisure-hospitality and also for government sector.
• Hirings, separations and quitters have decreased over the month. The quite-rate ratio has slightly decreased from 2.2 to 2.1.
• These data pointed towards lower demand and also slower rotation of jobs.

 

US: ISM Manufacturing (April): 49.2 vs 50 expected (prior: 50.3)

• Business sentiment has decreased on production (index still above 50), new orders, export orders, and backlogs of orders. All index, except production, were below the 50 level. Sentiment on employment was slightly more positive than prior month but index remained below 50.
• Prices paid have surged (index from 55.8 to 60.9) due to rising costs and raw materials.

 

UK: PMI Manufacturing (April): 49.1 vs 48.7 expected (prior: 50.3)

• Final data have shown more limited decline in business confidence over the month than estimated.
• Sentiment has declined on production, new orders, exports, and employment.
• High inventories, weak demand from outside and ongoing disruption in Red Sea have weighed down on confidence.
• The consumer sector has offered a more positive confidence.
• Costs and prices remained on the rise.

 

UK: Nationwide house prices (April): -0.4% m/m vs 0.1% expected (prior: -0.2%)

• Prices have corrected over the month due to rising bond yields and mortgage rates. Yearly trend remained positive, up by 0.6% y/y (1.6% y/y the prior month).

 

US: Employment cost index (Q1-24): 1.2% q/q vs 1.0% expected (prior: 0.9%)

• Wages remained on a stable trend up by 1.1% q/q, but benefits have accelerated leading to firmer employment cost index in Q1-24.
• Wages have increased the most in public sector (state and local governments), up by 1.4% q/q after 1.1% in the previous quarter. In private sector, wage growth was up by 1.1% q/q after 1.0% q/q.
• In these data, there is no sufficient slowdown from the trend in wage growth; but data also pointed to a reflationary public policy, as wage growth in this sector added to the strong rise in public employment seen past month.

 

US: S&P CoreLogic CS 20-City (Feb.): 7.29% y/y vs 6.7% expected (prior: 6.58% revised from 6.59%)

• Prices were up by 0.61% m/m after 0.17% m/m the prior month.

 

US: Chicago PMI (Apr): 37.9 vs 45.0 expected (prior: 41.4)

• Chicago's economic activity declined for the fifth month in a row in April, and it did so significantly, marking the most pronounced drop since November 2022.

 

US: Consumer confidence (CB) (Apr): 97.0 vs 104.0 expected (prior: 41.4)

• In April, US consumer confidence dropped to its lowest point since mid-2022, reflecting a shift in sentiment. Americans grew less optimistic about the current labor market and more worried about future business conditions, job availability, and income.
• Expectations measure for the next six months fell to 66.4 from 74.0, while the measure of present conditions declined to 142.9 from 146.8.
• Although inflation expectations held steady, consumers were primarily concerned about elevated prices for food and gas.

 

France: GDP (Q1-24): 0.2% q/q vs 0.1% expected (prior: 0.1%)

• GDP growth was slightly better than expected thanks to domestic demand.
• Consumption was up by 0.4% q/q after 0.2% q/q the prior quarter; consumption was strong in services (0.7% q/q) but depressed for goods (-0.6% q/q). Public consumption was also strong, up by 0.6% q/q.
• Investment was better oriented; private capex has rebounded by 0.5% q thanks to information communication (2.2% q/q) and also modest rebound in equipment (0.2% q/q). Public investment was up by 1.5% q/q after 0.4% q/q in Q4-23.
• Net exports were flat, due a strong rise in imports of oil and net inventories has contributed negatively to GDP, being down by 0.2 pp (-0.9 pp in Q4-23).
• Consumption and public spending (consumption and investment) played a large role to stabilize growth and momentum in services remained stronger than in the manufacturing and industrial sectors; outlook for 2024 could improve further in H2-24.

 

France: Consumer spending (March): 0.4% m/m vs 0.2% expected (prior: 0.1% revised from 0%)

• Consumption has rebounded over the month thanks to autos (2.1% m/m), clothes (1.3% m/m) and also food; spending on energy was down over the month.

 

France: CPI (April): 0.5% m/m as expected (prior: 0.2%)

• Preliminary data have pointed to a still sustained monthly change in inflation.
• Services were up by a strong 1% m/m (flat the prior month), while energy was down (-0.3% m/m after -0.6% m/m) and other sectors including food, were just up by 0.1% m/m.
• Yearly trend remained unchanged from the prior month at 2.4% y/y.

 

Germany: GDP (Q1-24): 0.2% q/q vs 0.1% expected (prior: -0.5% revised from -0.3%)

• Preliminary data have pointed towards a rebound in growth in Q1, while data have been strongly revised down for Q4-24.
• Economy should progressively exit from stagnation-recession and should cyclically improve further in H2-24, but the situation remains fragile.

 

Germany: Retail sales (March): 1.8% m/m vs 1.4% expected (prior: -1.5% revised from -1.9%)

• Sales have rebounded after the large fall seen the prior month.
• Picture remained mixed at a sector level, being highly volatile over the past months; sales have rebounded thanks to furniture, food and internet sales.

 

Germany: Unemployment rate (April): 5.9% as expected (prior: 5.9%)

• The unemployment ratio remained unchanged but unemployed was slightly up over the month.
• Unemployed has increased from 6 k the prior month to 10 k.

 

Italy: GDP (Q1-24): 0.3% q/q vs 0.1% expected (prior: 0.1% revised from 0.2%)

• Preliminary data have pointed towards a strong than expected Q1 GDP growth.
• Details by sector were not published but industry and exports have contributed to the strong growth according to official comments.

 

Spain: GDP (Q1-24): 0.7% q/q vs 0.4% expected (prior: 0.7% revised from 0.6%)

• Growth remained on a sustained trend according to first GDP data. Nevertheless, sector contribution has turned volatile in past quarters with some reversal in role of consumption.
• Consumption was down by 0.1% q/q after 0.5% q/q the prior quarter.
• Growth was driven real estate up by capex (2.6% q/q, thanks to real estate up by 3% q/q) and exports (2.4% q/q).
• Spain remained the only major eurozone country to be able to show an above 2% GDP growth this year.

 

Italy: CPI (April): 0.6% m/m as expected (prior: 1.2%)

• Prices remained on sustained trend due to strong rises in clothes (5.4% m/m), hotel-restaurants (2% m/m) and transport (0.6% m/m).
• Base effects were positive and have driven the yearly trend lower, from 1.2% y/y to 1.0% y/y.

 

Poland: CPI (April): 1.0% m/m vs 1.1% expected (prior: 0.2%)

• Inflation was strong due to rising food and fuel prices over the month.
• Yearly trend has increased from 2.0%y/y the prior month to 2.4% y/y.

 

Switzerland: KOF (April): 101.8 vs 102 expected (prior: 100.4 revised from 101.5)

• Business sentiment has slightly improved over the month but past month data were revised down.
• Index was back to range seen in the 2018-19 period. Sentiment has improved in all major sectors except construction; situation has improved the most for chemical, pharma, and machinery sectors over the month.

 

UK: M4 (March): 0.7% y/y (prior: 0.6% revised from 0.5%)

• M4 lending has rebounded over the month by 0.9% m/m and was up by 0.7% y/y (-0.5% y/y the prior month).
• Net consumer credit has increased further, and mortgage approvals have also increased from the prior month.

 

Eurozone: CPI estimate (April): 2.4% y/y as expected (prior: 2.4%)

• First estimate has shown 0.6% m/m change in inflation after 0.8% m/m the prior month; core inflation was up by 0.7% m/m after 1.1% m/m prior month.
• Prices of services were up by a strong 0.8% m/m (0.7% m/m prior month; 3.7% y/y after 4% y/y the prior month); energy was up by 0.3% m/m after -0.2% m/m in March), and prices of goods were up by 0.5% m/m after 1.9% m/m in March).
• Base effects have served the decline of yearly core inflation from 2.9% y/y in March to 2.7% y/y.
• While disinflation trend continues and should comfort the ECB to ease in Q2-24, the monthly changes look very sustained that could limit the disinflation and the margin of maneuver of the ECB in H2-24.

 

Eurozone: GDP (Q1-24): 0.3% q/q vs 0.1% expected (prior: -0.1% revised from 0%)

• GDP estimates for Q1-24 was finally stronger than expected, but Q4-23 was revised down.
• All major eurozone countries were able to surprise on Q1 GDP growth, but the rebound still looks fragile.

Eurozone: Economic confidence (Apr): 95.6 vs 96.7 expected (prior: 96.2 revised from 96.3)

• The economic sentiment indicator fell to 95.6, declining by 0.6 points from market expectations of 96.9. This drop was primarily influenced by a notable decrease in confidence among manufacturers, hitting its lowest level since July 2020 at -10.5 compared to -8.9 in March.
• Additionally, morale dipped among service providers (6.0 vs 6.4), retailers (-6.8 vs -6.0), and constructors (-6.0 vs -5.6). However, there was a slight improvement in consumer sentiment (-14.7 vs -14.9). Regarding pricing, the consumer inflation expectations index decreased to 11.6, down by 0.7 points, while the gauge for selling price expectations among manufacturers decreased slightly to 5.4.
• Across the major economies within the eurozone, France experienced a significant decline in the ESI (-4.8), Italy saw a more moderate decrease (-1.3), whereas Spain (+2.3) and Germany (+1.5) showed marked improvements.

 

Germany: CPI (Apr P): 0.5% m/m vs 0.6% expected (prior: 0.4%)

• In April, German inflation picked up pace, primarily driven by increases in energy prices. CPI remained at 2.2% y/y, maintaining its lowest point since May 2021 and slightly below market expectations of 2.3% y/y.
• The EU-harmonized inflation rate inched higher to 2.4% y/y from March's 2.3% y/y, slightly exceeding the market consensus of 2.3% y/y.

 

Spain: CPI (Apr P): 0.7% m/m vs 1.0% expected (prior: 0.8%)

• Spain's consumer price inflation rate nudged up to 3.3% y/y, marking its highest point in three months, slightly up from 3.2% y/y in March and below estimates of 3.4% y/y.
• This uptick was primarily driven by the surge in gas prices, contrasting with the decline witnessed in April 2023, along with higher food prices surpassing last year's levels. Despite a decrease, electricity prices didn't experience as significant a drop as in the corresponding month of the previous year. The core rate, excluding volatile items, dropped to 2.9% y/y from 3.3% y/y in March.
• EU-harmonized inflation rose to 3.4% y/y in April from 3.3%. y/y, in line with expectations.

US: Core PCE deflator (Mar): 0.3% m/m as expected (prior: 0.3%)

• Core PCE inflation, which is the Federal Reserve's preferred gauge, remained steady at 0.3% m/m, meeting expectations. Yearly core PCE inflation slightly exceeded expectations at 2.8%, compared to the anticipated 2.7%.
• Supercore PCE inflation (cores services ex. housing), the measure currently favored by Fed Chair Jerome Powell, increased to around 0.4%, up from the previous 0.2%. This rise was primarily driven by higher transportation services and other services prices.
• In March, personal income grew by 0.5%, consistent with expectations, while personal spending saw a greater increase of 0.8%, surpassing the consensus of 0.6%. This surge in spending pushed the personal saving rate down to 3.2%, compared to the previous 3.6%.
• Despite concerns about persistent inflation coupled with robust household spending, which could imply a less aggressive rate-cutting cycle, traders reacted positively. They found relief in the in-line monthly inflation data, especially after Thursday's quarterly figures hinted at potential upside risks in March.

 

US: Consumer confidence (Michigan) (Apr F): 77.2 vs 77.9 expected (prior: 79.4)

• The University of Michigan consumer sentiment for the US was adjusted downward to 77.2, down from the preliminary figure of 77.9. This contrasts with March's reading of 79.4, the highest level since July 2021.
• Both current conditions (79 vs. 79.3) and expectations (76 vs. 77) experienced larger declines than initially anticipated.
• Inflation expectations for the coming year were revised upward to 3.2% from 3.1%, while the five-year outlook remained steady at 3%.

 

UK: GFK consumer confidence (Apr): -19 vs -20 expected (prior: -21)

• After a three-month decline, there's been an improvement in the GFK index, surpassing market expectations set at -20. Over the last six months, the index has fluctuated between -24 and -19, suggesting gradual advancement amidst considerable economic uncertainty.
• Four out of the five components comprising GfK’s Consumer Confidence indicator experienced an increase. Among these, the index reflecting expectations for personal financial situations over the next 12 months stood out as the only measure in positive territory.

 

Spain: Retail sales (real) (Mar): 0.6% y/y vs 2.2% expected (prior: 1.8% revised from 1.9%)

• Spanish retail activity has sustained its growth streak for the 16th consecutive month, albeit at a notably slower pace than the previous month.
• Both food sales (+0.6% vs. +1.3%) and non-food product sales (+2.5% vs. +3.8%) experienced decelerated growth.
• Spending on home equipment saw a more subdued increase (+2.8% vs. +4.9%), while spending on personal equipment declined (-4.6% vs. +8.4%).