Macro review for w/c 3 September 2018 – US growth momentum continues into Q3. Employment and non-farm payrolls continue to grow and the annual avg hourly earnings growth accelerated. ISM’s for August show business activity expanding at a faster rate, but PMI’s more subdued.
European data highlights slower momentum. GDP growth slowed in Q2 for the Euro area and growth is well below that of last year. Eurozone manufacturing PMI slowing with weaker gains in new export orders. Of note was the German data – manufacturing new orders, led by exports, and industrial production data is rolling over. German manufacturing PMI at lowest reading for 18 months.
Australia – RBA kept rates on hold, but two of the major banks increased mortgage lending rates anyway. Mortgage lending continues to decline. GDP growth in Q2 slowed versus Q1, but annual growth increased to +3.4%, above the RBA expectation for growth to “average around 3%”.
Trade disputes remained in focus as the US threatened a new round of tariffs of Chinese imports and hinted at the possibility of escalation with Japan.
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 03Sept2018
The outlook for w/c 10 September 2018 – The US Treasury will auction and settle approx. $161b in short term bills (4wk bill TBA), paying down approx. $22b in debt. The US Treasury will also auction $73b in longer term notes and bonds – to settle next week.
It’s possible that a fourth tranche of tariffs on Chinese imports will be announced by the US this week in a further escalation of the trade dispute with China. NAFTA negotiations between US and Canada will continue this week – an outcome may not be finalised until the end of the month.
Brexit negotiations are now ongoing between the UK and EU. Next week’s informal summit of EU leaders at Salzburg is shaping up as an important event for Brexit negotiations.
Key central bank decisions this week – ECB and BoE. Plus, several US Fed speeches – looking for further signalling on US rates/monetary policy.
Important data out this week; US monthly CPI and retail sales, UK monthly GDP.
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
