Analysis:Eurozone 2Q GDP Fell Less Than Expected;Outlook Glum Posted: 14 Aug 2012 02:10 AM PDT 2Q GDP flash: -0.2% q/q, -0.4% y/y MNI survey median: -0.3% q/q, -0.5% y/y MNI survey range: -0.4% to -0.1% q/q 1Q GDP: flat q/q, flat y/y (revised from -0.1% y/y) 4Q GDP: -0.3% q/q, +0.7% y/y 3Q GDP: +0.1% q/q, +1.3% y/y - PARIS (MNI) – The Eurozone economy contracted slightly less than generally feared in 2Q, as moderate growth in some core countries partly offset the ongoing slump in the southern periphery, Eurostat estimated Tuesday. The 0.2% quarterly GDP downturn left activity 0.4% lower on the year. Most analysts had forecast a slightly steeper decline. An upside risk to the consensus forecast was evident after positive surprises in Germany and France. Germany posted a moderate 0.3% quarterly gain, while France managed to hold activity nearly stable. However, the remaining momentum of the Eurozone’s locomotive and a few smaller economies was outweighed by declines in Spain (-0.4%), Italy (-0.7%), Portugal (-1.2%), Belgium (-0.6%), Finland (-1.0%) and Cyprus (-0.8%). Quarterly GDP gains were also registered in the Netherlands and Austria (both +0.2%), Estonia (+0.4%) and Slovakia (+0.7%). As usual, Eurostat provided no information on GDP components with its flash estimate. Available data point to weakness on the expenditure side. Private consumption was no doubt again throttled by rising unemployment and fiscal tightening, especially in peripheral countries. Eurozone retail sales declined by 0.7% in 2Q. Business investment was probably dampened again by excess production capacity, dismal demand prospects and high borrowing rates in much of the periphery. Eurozone industry output fell by 0.6% in 2Q, while construction activity in April and May was down 0.2% from the 1Q average, despite the recovery in Germany. Imports of goods fell faster than exports in April and May in nominal seasonally adjusted terms. While foreign trade weighed heavily on activity in France, it remained a driver of German growth in 2Q. Rising exports no doubt limited the contraction in bailout countries as well. Leading indicators for the Eurozone remain at weak levels at the start of 3Q, pointing to a further contraction ahead. The factory PMI fell to a 37-month low of 44.0 in July, while the services PMI remained well below par at 47.9 after a 1.2-point recovery since May. Fiscal tightening, rising unemployment and subdued wage gains amid still high inflation are a recipe for anemic consumption. Among the larger economies, only in Germany and perhaps France are consumers likely to be any better off in coming months, which would accentuate the growing divergence across Eurozone economies. Despite the depreciation of the euro, extended recessions can be expected throughout most of the southern flank, which could pull down some more northern neighbors into negative territory. In spring the European Commission had forecast a full-year GDP decline of 0.3% for the Eurozone, with negative growth in seven of 17 member states. In the core countries, growth would be subdued, as Germany faces waning export demand from its neighbors and France could see its consumption motor stall amid high unemployment and budget tightening, –Paris newsroom +331 4271 5540; email: ssandelius@mni-news.com [TOPICS: MT$$$$,M$X$$$,M$XDS$,MTABLE] |
Analysis: Eurozone Jun Industry Output Shows 2Q -0.6% Q/Q Posted: 14 Aug 2012 02:10 AM PDT June preliminary: -0.6% m/m, -2.1% y/y MNI survey median: -0.6% m/m, -1.9% y/y MNI survey range: -2.0% to +0.5% m/m May: +0.9% m/m (revised from +0.6%) April: -1.1% m/m (unrevised) March: -0.1% m/m (unrevised) February: +0.7% m/m (unrevised) January: -0.2% m/m (unrevised) – FRANKFURT (MNI) – Industrial production in the Eurozone fell for the fourth time this year, as declines in intermediate, capital and consumer non-durable goods offset gains in energy and consumer durables, Eurostat reported on Tuesday. While May’s rebound was revised upwards to 0.9%, June’s 0.6% m/m downturn still resulted in a 0.6% quarterly dip in output for 2Q, deepening 1Q’s 0.5% decline and likely contributing to 2Q’s 0.2% GDP fall. On the year, industrial production was down 2.1%. Energy output recovered 0.4% on the month, narrowing the annual shortfall to 0.4%. Intermediate goods production fell 0.4% to bring the annual rate to -3.7%. Capital goods output slipped 1.3% m/m, resulting in output down 0.9% y/y. Consumer durables goods production continued to increase, gaining 0.2% on the month to slow the annual decline to 2.0%. Conversely, consumer non-durable output fell back 0.7%, also resulting in an annual dip of 2.0%. Despite record low borrowing costs, austerity measures and falling morale are likely to hamper domestic demand. While a depreciated euro would support exports, orders from abroad should also suffer amid subdued economic growth in the U.S. and Asia. Recent survey data don’t suggest a recovery in the near term. July’s manufacturing PMI fell to a 37-month low of 44.0, as output contracted at its fastest pace in over three years and total new orders slipped for the 14th consecutive month. With inventories at long-term levels and order books thinning, manufacturers revised down further their production expectations in July, knocking the European Commission’s industrial sentiment figure to its lowest level since 2009. In Germany, the dip in manufacturing offset higher energy production, knocking overall industrial output down 0.8% on the month and 0.4% on the year. With new orders down 1.7% in June, the trough in production may not yet have been reached. An Ifo institute survey showed manufacturers’ production plans falling to their lowest level since mid-2009. French industrial output fell 0.1% in June following May’s sharp decline to end 2.6% lower on the year. The trend in manufacturing is likely to remain downward, as leading indicators are mostly bleak. Insee’s surveys show producers quite pessimistic about orders and near-term output prospects. The factory PMI sunk to a 38-month low of 43.4 in July. The Bank of France’s latest survey, however, gave a more balanced outlook, with potential short-term gains in chemicals, foods and most high-tech branches partly offsetting declines elsewhere. Still, the overall trend should remain downward. Down 0.6%, the slide in Spanish industrial production was the 5th monthly decline so far in 2012, pushing output down 6.3% on the year. The decline was widespread, with capital, investment and consumer goods production all down. Consumer durables could see an upturn as consumers bring forward major purchasing plans to avoid the upcoming VAT hike. However, with unemployment still rising and demand subdued, the rebound will likely be brief. In Italy, output fell 1.4% on the month and 8.2% on the year. July brought little improvement, with the PMI pointing to falling output and orders. As in Spain, labour developments in Italy do not bode well for a sustained recovery in production. With the recession extending itself to its fourth quarter, 3Q is certainly off to a poor start. Among the smaller Eurozone states, the sharpest monthly fall was noted in Portugal (-4.4%), followed by Estonia (-3.9%) and Finland (-1.1%). Conversely, Ireland (+9.5%) led the way in gains, followed by Slovenia (+2.8%) and Luxembourg (+2.2%). Up-to-date figures for Belgium, Cyprus, Austria and Slovakia were not available. – Frankfurt bureau: +49 69 720 142; e-mail: frankfurt@mni-news.com – [TOPICS: M$XDS$,MT$$$$,M$X$$$] |
EMU DATA: 2q12 flash real GDP -0.2% q/q, -0.4% y/y… Posted: 14 Aug 2012 02:10 AM PDT EMU DATA: 2q12 flash real GDP -0.2% q/q, -0.4% y/y – EMU 2q flash GDP above MNI median fcasts(-0.3% q/q,-0.5% y/y) – EMU 1q real GDP unrevised unch q/q, unrev unch y/y – See MNI MainWire for details |
EMU DATA: June industry output sa -0.6% m/m, wda y/y. Posted: 14 Aug 2012 02:10 AM PDT EMU DATA: June industry output sa -0.6% m/m, wda -2.1% y/y – EMU June industry output m/m matches MNI median fcast – EMU May ind output rev up +0.9% m/m, -2.6% y/y (+0.6%,-2.8%) – EMU 2q industry output -0.6% q/q; 1q -0.5%; 4q -2.1% – EMU June 3mm avg (April-June:mar-May) -0.3% after May -0.1% – Please see MNI Mainwire for further details |
Eurozone Q2 GDP (1st estimate) -0.2% q/q, -0.4%y/y Posted: 14 Aug 2012 02:01 AM PDT In line with expectations after last readings of flat, and -0.1% y/y Eurozone June Industrial output -0.6%m/m, -2.1% m/m, pretty in line with expectations of -0.7 and -2.2%, May IP revised up to +0.9% m/m from +0.6%, and -2.6% from -2.8% y/y |
German August ZEW survey: economic sentiment -25.5 Posted: 14 Aug 2012 02:01 AM PDT Demonstrably weaker than Reuter’s median forecast of -19.6. ZEW says: - Indicator decline signals analysts expect German economy to cool throughout coming 6 months
- Export sectors especially may be affected
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UK DATA: Jul CPI +0.1 % m/m; +2.6% y/y vs Jun +2.4%.. Posted: 14 Aug 2012 01:40 AM PDT UK DATA: Jul CPI +0.1 % m/m; +2.6% y/y vs Jun +2.4% y/y ———————————————————————— CPI inflation rose unexpectedly in July, driven higher by higher transport prices and clothing and footwear. The figures wrong-footed analysts and will be met with disappointment from markets, although it is unlikely to herald a renewed upward trend in inflation. Some of the increase was due to clothing/footwear where record discounting last month meant the usual July price cutting was far less aggressive than usual. CPI rose 0.1% m/m and 2.6% y/y, up from 2.4% in Jun. Analysts had forecast a 0.1% decline m/m and rise of 2.3% y/y. Typically clothing and footwear sales fall sharply in July due to the summer sales, but this year the fall was less aggressive as sales had been brought forward to June. There was also a large upward impact from transport which added 0.08 percentage point to CPI inflation and 0.17 percentage point to the m/m change with airfares rising sharply, possibly due to the Olympics. |
UK Analysis: NS House Prices Up On Month In June Posted: 14 Aug 2012 01:40 AM PDT -Jun House Prices +0.5% m/m; +2.3% y/y LONDON (MNI) – House prices rose on the month in June, with all types of housing pushing prices higher, figures released by National Statistics showed Tuesday. House prices rose 0.5% between May and June on a seasonally adjusted basis and were up 2.3% on the year, the same annaul rise as in May. Pre-owned dwelling prices were up 0.6% on the month, while new dwellings rose 0.2%. Prices paid by first time buyers increased by 0.3% and former owner occupier prices rose 0.6%. The latest survey from RICS showed house prices falling in July with surveyors expecting them to fall further over the coming months. -London bureau: 0044 20 7862 7491; email: puglow@marketnews.com [TOPICS: M$B$$$,MABDS$] |
UK DATA: UK JUL CPI +0.1% M/M; +2.6% Y/Y VS JUN Y/Y.. Posted: 14 Aug 2012 01:40 AM PDT UK DATA: UK JUL CPI +0.1% M/M; +2.6% Y/Y VS JUN +2.4% Y/Y |
UK Analysis: CPI Inflation Posts Surprise Rise In July Posted: 14 Aug 2012 01:40 AM PDT -Jul CPI +0.1 % m/m; +2.6% y/y vs Jun +2.4% y/y; LONDON (MNI) – Consumer price inflation rose unexpectedly in July, driven up by higher transport prices and clothing and footwear, figures released by National Statistics showed Tuesday. The figures wrong-footed analysts and will be met with disappointment from markets, although it is unlikely to herald a renewed upward trend in inflation. Some of the increase was due to clothing and footwear where record discounting last month meant the usual July price cutting was far less aggressive than usual and a large rise in air fares may have been temporarily boosted by the Olympics. Consumer prices rose 0.1% on the month in July and rose 2.6% on the year, up from 2.4% in June. Analysts had expected to see a 0.1% decline on the month and rise of 2.3% on the year. Typically clothing and footwear sales fall sharply in July due to the summer sales, but this year the fall was less aggressive as sales had been brought forward to June. The fall of 2.6% between June and July was the smallest decline on record. This effect pushed CPI inflation up by 0.05 percentage point. There was also a large upward impact from transport which added 0.08 percentage point to CPI inflation and 0.17 percentage point to the change between June and July. The largest upward impact came from airfares, where prices rose 21.7% on the month. This was mainly due to flights to Europe and long-haul. National Statistics said they didn’t know whether the Olympics had pushed up air fares in July but noted that domestic flight prices had remained stable. Core inflation, which excludes energy, food, alcoholic beverages and tobacco rose to 2.3% in July from 2.1% in June. The latest Inflation Report from the Bank of England showed the two year ahead inflation forecast was nudged up slightly, to around 1.7%, but still markedly below the 2% target. In his opening statement BOE Governor Mervyn King said inflation was likely to be “around or a little below target for much of the forecast period” but he rejected the view further stimulus was needed now. “Towards the end of the forecast horizon the balance of risks to inflation around the 2% target is broadly balanced. That in itself does not suggest an urgent need for further action,” King said. -London bureau: 0044 20 7862 7491; email: puglow@marketnews.com [TOPICS: MT$$$$,M$B$$$,MABDS$] |
UK DATA: Jun House Prices +0.5% m/m; +2.3% y/y……. Posted: 14 Aug 2012 01:40 AM PDT UK DATA: Jun House Prices +0.5% m/m; +2.3% y/y ———————————————————————— House prices rose on the month in June, with all types of housing pushing prices higher, figures released by National Statistics showed Tuesday. House prices rose 0.5% between May and June on a seasonally adjusted basis and were up 2.3% on the year, the same annaul rise as in May. Pre-owned dwelling prices were up 0.6% on the month, while new dwellings rose 0.2%. Prices paid by first time buyers increased by 0.3% and former owner occupier prices rose 0.6%. |
UK July CPI +0.1% m/m, + 2.6 % y/y Posted: 14 Aug 2012 01:31 AM PDT Sharply up from -0.4% m/m and +2.4% y/y in June and expectations of 2.3% y/y.; First rise since March with the ONS reported that airfares leapt 21.7% on the month Cable’s getting a mild boost on the release to around 1.5725 as EUR/GBP tumbles back to the low 0.7870′s from 0.7885 highs July RPI rose +0.1% m/m, +3.2 % y/y (above forecasts of 2.8% y/y) |
GBP/USD nudging higher ahead of July CPI Posted: 14 Aug 2012 01:29 AM PDT Market’s expecting a small improvement on the m/m from -0.4% in June with little if any change on the y/y reading. Cable’s currently around 1.5708 from Asian session lows around 1.5675, but lagging the EUR/USD as the EUR/GBP chews through thick offers in front of 0.7900. data released in couple of mins…. |
Slooooooooooooooooooooow motion forex………..Aaaaaaaaaaaaaaargh!! Posted: 14 Aug 2012 01:20 AM PDT Why does everything move so bloody slooooooooowly these days? Like pulling teeth. EUR/USD sits at 1.2380, well touted sell orders at 1.2380/00 so far proving barrier to accelerated upside. I DEMAND A MOVE OVER 1.2400!!! No move over 1.2400 today and I’m taking the rest of the week off!!! |
Germany Constitutionl Court:ESM Decision Still Planned Sep 12 Posted: 14 Aug 2012 01:10 AM PDT FRANKFURT (MNI) – Germany’s Constitutional Court sees no reason to delay its planned September 12 ruling on the ESM rescue fund and EU fiscal pact, despite a new lawsuit filed with the court seeking a delay, a spokeswoman for the court in Karlsruhe confirmed to MNI Tuesday. A group led by German Professor Markus Kerber has filed a lawsuit claiming the Constitutional Court must delay its ruling because of a similar case filed before the European Court of Justice in Luxembourg. But the German court argues its decision on September 12 involves only a ruling on a temporary injunction sought against the ESM and fiscal pact, not a final ruling on the two European mechanisms. A final ruling would have to take the European Court of Justice case into account. “We have received the injunction sought by Professor Kerber,” the court’s spokeswoman said. “We do not consider it appropriate to delay the date from the 12 (September), so in all likelihood it will stay.” – Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com – [TOPICS: M$X$$$,M$$EC$,MGX$$$,MT$$$$,M$G$$$,M$$CR$] |
Spain’s banks borrowed 402.2 bln euros from ECB in July Posted: 14 Aug 2012 01:06 AM PDT Up from 365 bln in June. It’s a record!!!! (kinda record you don’t really want) That’s 33% of all gross ECB borrowing in July. |
Poll-time USD/JPY Posted: 14 Aug 2012 12:55 AM PDT Don’t eva say I don’t listen to our readers….. By popular demand!!! we have a USD/JPY poll. We sit at 78.55. What’ll we see first 77.50 or 79.50? Reason/s for choice appreciated, but not obligatory. |
Congratulations….. Posted: 14 Aug 2012 12:34 AM PDT To those clever trevors who picked 1.2385 in yesterdays’ EUR/USD poll. So we might as well have another one We’re at 1.2380. What’ll we see first 1.2280 or 1.2480? Reasoning/s welcome, but not obligatory. |
Update:BBK Dombret Warns Rising Keynesn Tendncy At IMF-Press Posted: 14 Aug 2012 12:30 AM PDT FRANKFURT (MNI) – Bundesbank Board member Andreas Dombret warned of rising Keynesian tendencies at the International Monetary Fund that do not pay sufficient attention to the medium term and are crowding out private investment, according to comments published in two German newspapers Tuesday. “In the past, with its credit financing, the fund acted as a catalyst for private capital in a country,” Dombret said in comments to the Frankfurter Allgemeine Zeitung. “With the expansion of credit volumes, there is a danger because of its senior creditor status that private creditors will be forced out by the IMF.” The IMF’s readiness to accept and recommend expansive and anti-cyclical monetary and fiscal policies appears to be on the rise, Dombret also told the Boersen Zeitung in an interview. “In my view this [tendency] bears risks – risks of medium-term dislocations such as price bubbles or excessive debt that sometimes are not sufficiently observed,” Dombret said. One must also bear in mind that expansive fiscal policies that further increase indebtedness of countries under IMF programs boost financial risks for the fund and its net contributors, Dombret warned. The comments come on the 60th anniversary of Germany joining the IMF and World Bank. –Frankfurt newsroom +49 69 72 01 42; e-mail frankfurt@mni-news.com [TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$,MGX$$$] |
Barrier talk… Posted: 14 Aug 2012 12:29 AM PDT Really very little change in the market on these… AUD/USD: 1.0650 GBP/USD: 1.5800 USD/JPY: 77.75, 77.50 USD/CAD: 0.9900 |
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