Macro Review for w/c 6 August 2018 – Starting with central bank meetings – the RBA and RBNZ both kept rates on hold last week. The BoJ summary of opinions report highlighted little differences of opinion on recent MP implementation changes. One opinion stood out – “Under the current policy, the possibility of the inflation rate increasing gradually toward 2 percent is low”.
US data continues to support Fed rate trajectory – CPI continued to grow with CPI ex fuel and food accelerating from 2.3% to 2.4% in June. Services growth (ex-energy services) remained at 3.1%. Consumer credit pulled back in the latest month but was higher overall in Q2 versus Q1. JOLTS, especially job openings, remain at historical highs.
Japan prelim Q2 GDP growth was stronger, driven higher in the quarter by private consumption. What stood out was the acceleration in the growth of compensation of employees in the quarter. Net exports detracted from growth on the back of slower export growth.
UK prelim Q2 GDP was also stronger. From the expenditure perspective, a large adjustment was applied to changes in inventories, making investment look stronger. Services continued to grow and contributed most to overall GDP growth. Construction reversed last quarters decline but was offset by a decline in total production (incl manufacturing).
On the trade front, the USTR confirmed that tariffs on the remaining $16b of the original $50b of Chinese imports would go into effect from 23 August 2018.
More detail is provided in the full review of last week – download it here (hit the back button on your browser to return to the site);
Weekly Macro Review 06August2018
The outlook for w/c 13 August 2018 – A relatively heavy week of treasury issuance with the US Treasury raising approx. $51b in new money (4wk bill TBA). Its also mid-month and $23b in US Fed holdings of securities will mature – $10b of that will be reinvested.
Trade – NAFTA talks will continue between US and Mexico this week – both sides claiming a deal possible by the end of August.
Official Brexit negotiations recommence this week between the UK and EU.
Growth, retail sales and inflation data are in focus this week;
- US Retail Sales for July and a further read on industrial production and regional manufacturing.
- Eurozone Q2 prelim GDP, CPI for July, Industrial production and sentiment.
- Key UK data – Retail Sales and CPI for July.
- Australian Labour Force data for July and the Q2 Wage Price Index.
Further detail is provided in the full brief – download it here (hit the back button on your browser to return to the site);
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
