Makroökonomische Daten: 17 – 20 Juni 2013

Giu 14, 2013

Minute Read

In the euro area, the first June surveys should confirm the improvement in sentiment seen over the past two months. The ZEW index is expected to recover after two months of weakness. The preliminary estimate of the composite PMI…

should point to a further rise, to 48.3, from 47.7 previously. The manufacturing index is forecast at 48.6 from 48.3, as opposed to a more gradual recovery in the services sector, with the PMI index rising to 47.5 from 47.2. Households’ confidence may take a breather in June, after recovering for three months in a row, albeit from historically very low levels. The labour costs dynamics should remain broadly in line with the levels seen at the end of 2012, at +1.3% y/y.
This week, focus in the United States will be on the FOMC meeting. We expect the Fed to signal that the outlook for the labour market has improved substantially and that, on condition of data confirming the current trend in the coming months, the Committee could taper the pace of asset purchases, albeit cautiously. As regards data releases, the Empire index should climb back into marginally positive territory in June. Housing starts should rise back in May, confirming the uptrend in residential construction, and the CPI is estimated to show a +0.2% m/m rise both in terms of the headline and core indices, cooling potential concerns the Fed may have over excessive deflation.

Monday 17 June

Euro area
– Euro area. Labour costs at year at year start may have stayed broadly unchanged at levels in line with the end of 2012: +1.3% y/y. Higher wages in Germany by around 3% were probably offset by the slowdown in nominal wages in peripheral countries. The trend of the cost of labour slowed to 1.3% y/y in December, from 2.2% at the end of 2011. This will help keep the price trend under control within the euro area.

United States
– The NY Fed’s Empire Index is forecast to rise in June to 0.5 from -1.43 in May. The index and its breakdown into components were poor in May, with orders at -1.17 (the first negative value since January), therefore expectations for June remain weak. Most regional surveys have recently shown a wide gap vs. the ISM, consistently proving weaker than the national survey.
The signals sent by various indicators, work hours and employment in May, orders in April, are all compatible with a recovery of economic activity in the manufacturing sector as well.

Tuesday 18 June

Euro area
– Germany. The ZEW index is expected to rise back in June to 40.2, from 36.4 last month. The index would revers the downtrend observed in recent months. The current situation index could also improve, to 10.8 from 8.9, rising above its long-term average, while staying below the march 2013 reading.

United States
– The May CPI is forecast to rise by 0.2% m/m (1.4% y/y), from -0.4% m/m in April. The core index should also be on the rise, by 0.2% m/m (1.7% y/y). The March and April readings were especially weak, with two consecutive declines for the headline index, and two 0.1% m/m increases for the core index. Gasoline should contribute positively to the price trend, after two months on the decline (also amplified by seasonal adjustment factors). Prices are expected to be up in the clothing & apparel and health care sectors, following very moderate indications in April. Year-on-year inflation is therefore estimated to climb back in terms of the headline index, easing the Fed’s potential concerns over excessive deflation.
– Housing starts in May are expected to increase to 960k from 853k in April, as opposed to a correction in permits, to 990k from 1.005 million in April. The estimated changes in May should correct the volatility recorded in April, mostly tied to the multifamily segment, with a sharp drop in housing starts and a surge in licenses. The Employment Report outlined a rise in employment numbers in the construction sector, following a modest decline in April. The trends of both series should stay positive, in the single-family segment in particular, confirming the expansion of the residential construction sector.

Wednesday 19 June

United States
– The FOMC meeting will focus on the issue of reducing the pace of asset purchases. The Committee will cut out a little more time for itself, while signalling that the assessment of a “substantial improvement” in the outlook for the labour market is impending. The FOMC should indicate that if evidence gathered in the short term confirms that growth is accelerating, and that labour market conditions are continuing to improve at their current pace, the pace of asset purchases could be gradually slowed, and reassessed meeting by meeting. In our view, improving economic conditions, and the aim of containing risks tied to the exit strategy, should prompt the FOMC to reduce the pace of purchases in 3Q and 4Q 2013, and to stabilise the Fed’s balance sheet starting at the beginning of 2014. The stable-stimulus phase may last for quite some time (until the end of 2015), when the maturities of assets held in the Fed’s portfolio will not require sales to be considered to reduce monetary accommodation. The Fed’s message should in any case extremely cautious, specifying that the FOMC will stay open to increasing or reducing the pace of asset purchases, based on the new data flows available at each meeting. During the press conference, Bernanke should also stress once again that a reduction in purchases would in any case continue to mean adding new monetary stimulus, albeit at a more moderate pace.

Thursday 20 June

Euro area
– Preliminary PMI estimates for June are expected to confirm the mild recovery in activity recorded in May in the manufacturing sector, and to a lesser degree in the services sector. More in detail, the manufacturing index should rise to 48.8, hitting a high since the beginning of 2012, albeit still pointing to a slight contraction in output. German manufacturing will continue to lead the way, with the PMI index seen at 50 from 49.4, in France the reading could come in at 47.3, one point above 46.4 previous month’s level. The recovery of the services sector, which typically lags the manufacturing trend, should be more gradual, with the index rising to 47.6 from 47.2 previously. The composite PMI is estimated at 48.6, from 47.7, and should therefore be back in line with last January’s reading.
– The consumer confidence index could stay broadly unchanged in June, at -21.9. This is a historically very low level, and while in the past three months sentiment has improved somewhat, a significant brightening in June seems unlikely, as economic conditions, and labour markets in particular, are still very fragile.

United States
– The Philadelphia Fed index is estimated to improve to -1 in June from -5.2 in May. The manufacturing ISM dropped in May below the 50-point threshold, although indications on the trends of durable goods and the automotive sector were positive. In May, the orders and employment components were especially negative, and are expected in June to return to April levels, to just below zero.
– Existing home sales are forecast to increase to 5.03 mln units ann. In May, up from 4.97 mln units in April. Pending home sales have picked up again in march and April, after a temporary correction in February. All indicators point to further improvement in the residential real estate market.

Appendix

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