Industrial output in Germany expanded strongly in May, rising by 1.2% mom, which more than made up for April's 0.8% decline. The trend in manufacturing is stronger still, with a 1.2% gain in May after a contraction of just 0.3% in April. Hence, in the first two months of Q2 industrial output was up 1.1% from the Q1 average, and manufacturing up 1.7%. Clearly this points to upward risks to predictions that the economy suffered a soft spot in Q2, and our 0.2% qoq forecast for GDP is looking a bit low.
Thursday, July 7, 2011
Brazil: Monthly inflation slows less than expected, annual reading picks up
Monthly IPCA inflation slowed in June, to 0.15% m/m (consensus was 0.07%), down from 0.47% m/m a month earlier (or from 0.23% m/m in mid-month IPCA-15 inflation), helped by seasonal factors. Transport and food prices were the main driver for the deceleration, as food price inflation fell into negative terrain, while transport price deflation got deeper. Transport price deflation intensified to -0.61% in June from -0.24% a month before, mainly on a decline of 4.25% on fuel prices (mostly ethanol, but also gasoline), despite a jump in airfares (from -11.57% to 12.85%). Food price inflation swung to -0.26% from 0.63% a month before.
ECB Watch: The Gentleman is not for turning
ECB Watch: The Gentleman is not for turning
Two down, more to come: as expected and officially signalled one month ago, the ECB raised all its interest rates by 25bp, bringing the key refinancing rate to 1.5%. But markets were clearly expecting signs that the ECB now believes that it is coming close to an appropriate level of interest rates which were conspicuously absent. In fact, we read the Introductory Statement as suggesting quite clearly that further rate hikes in the near future are the most likely scenario.
Two down, more to come: as expected and officially signalled one month ago, the ECB raised all its interest rates by 25bp, bringing the key refinancing rate to 1.5%. But markets were clearly expecting signs that the ECB now believes that it is coming close to an appropriate level of interest rates which were conspicuously absent. In fact, we read the Introductory Statement as suggesting quite clearly that further rate hikes in the near future are the most likely scenario.
CNNMoney: Housing prices: No rebound in sight
RECOVERY AT RISK
Housing prices: No rebound in sight
By Chris Isidore @CNNMoney July 7, 2011: 8:33 AM ET
NEW YORK (CNNMoney) -- Housing prices are likely to keep falling the rest of this year, and probably won't show much improvement next year either, according to a survey of economists.
A CNNMoney exclusive survey of 27 economists showed the battered housing market is facing myriad problems and won't turn around anytime soon.
Housing prices: No rebound in sight
By Chris Isidore @CNNMoney July 7, 2011: 8:33 AM ET
NEW YORK (CNNMoney) -- Housing prices are likely to keep falling the rest of this year, and probably won't show much improvement next year either, according to a survey of economists.
A CNNMoney exclusive survey of 27 economists showed the battered housing market is facing myriad problems and won't turn around anytime soon.
WSJ: Rents Rise, Vacancies Go Down
REAL ESTATE JULY 7, 2011
Rents Rise, Vacancies Go Down
By WESLEY LOWERY
Apartment landlords are enjoying rising rents and falling vacancies.
The average effective rent, the amount paid after discounting, was $997 in the second quarter of the year, up from $974 a year earlier, according to a report scheduled for release Thursday by Reis Inc., which tracks leasing data for 82 markets. Second-quarter rents rose in all but two markets.
Rents Rise, Vacancies Go Down
By WESLEY LOWERY
Apartment landlords are enjoying rising rents and falling vacancies.
The average effective rent, the amount paid after discounting, was $997 in the second quarter of the year, up from $974 a year earlier, according to a report scheduled for release Thursday by Reis Inc., which tracks leasing data for 82 markets. Second-quarter rents rose in all but two markets.
BNP: GLOBAL DAILY SPOTLIGHT
ECB: Bias to Tighten
Ken Wattret
The ECB delivered the expected rate hike and left the door wide open for more of the same. The ECB played down the slowdown in growth and reiterated the upside risks to price stability, signalling a bias to tighten. We continue to expect a rate hike in October, teed up in September in tandem with higher inflation projections though this could be blown off course by market turmoil. The Q & A was dominated by issues related to the debt crisis with the ECB and some governments still at loggerheads over private sector involvement in the programme for Greece.
Ken Wattret
The ECB delivered the expected rate hike and left the door wide open for more of the same. The ECB played down the slowdown in growth and reiterated the upside risks to price stability, signalling a bias to tighten. We continue to expect a rate hike in October, teed up in September in tandem with higher inflation projections though this could be blown off course by market turmoil. The Q & A was dominated by issues related to the debt crisis with the ECB and some governments still at loggerheads over private sector involvement in the programme for Greece.
SG: FI Weekly: EU stress and US redress
We see US data turning up in the coming weeks and hope the holiday period will lead to an easing in EU sovereign tensions. That will support our tactical defensive views. In Europe, however, cash flow is positive and the uncertainties around the Eurogroup meeting and the EBA stress tests suggest prudence on sovereign risk.
Wednesday, July 6, 2011
SG: A new world order - When demand overtakes supply
The last long cycle (from 1980 to 2000-05) was shaped by exceptional growth in supply on a global level. The next will be dominated by demand dynamics.
China hikes the interest rates
China hikes the interest rates
China raises benchmark deposit and lending interest rates of all duration by 25bp. We have long anticipated this badly- needed rate hike. Although it is far from enough given China's inflation level, Chinese policymakers are probably going to pay more attention to structural issues for some time.
China raises benchmark deposit and lending interest rates of all duration by 25bp. We have long anticipated this badly- needed rate hike. Although it is far from enough given China's inflation level, Chinese policymakers are probably going to pay more attention to structural issues for some time.
BRAZIL
BRAZIL
The manufacturing PMI survey continued to decline, sliding to 49.0 in June from 50.8 in May, after a recent peak of 54.6 in February, and falling below the 50.0 mark for the first time since late last year.
The manufacturing PMI survey continued to decline, sliding to 49.0 in June from 50.8 in May, after a recent peak of 54.6 in February, and falling below the 50.0 mark for the first time since late last year.
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