Wednesday November 22 2017
December Rate Hike Becomes More Likely Despite Inflation Worries
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

The Federal Reserve said the US labor market had continued to strengthen and economic activity had been rising solidly despite hurricane-related disruptions. Several policymakers still consider appropriate to raise the federal funds rate in the near term if the economy stays on track despite concerns regarding persistently low inflation.

Excerpts from the minutes of the FOMC's October 31-November 1, 2017:

Many participants observed, however, that continued low readings on inflation, which had occurred even as the labor market tightened, might reflect not only transitory factors, but also the influence of developments that could prove more persistent. A number of these participants were worried that a decline in longer-term inflation expectations would make it more challenging for the Committee to promote a return of inflation to 2 percent over the medium term. These participants' concerns were sharpened by the apparently weak responsiveness of inflation to resource utilization and the low level of the neutral interest rate, and such considerations suggested that the removal of policy accommodation should be quite gradual. In contrast, some other participants were concerned about upside risks to inflation in an environment in which the economy had reached full employment and the labor market was projected to tighten further, or about still very accommodative financial conditions. They cautioned that waiting too long to remove accommodation, or removing accommodation too slowly, could result in a substantial overshoot of the maximum sustainable level of employment that would likely be costly to reverse or could lead to increased risks to financial stability. A few of these participants emphasized that the lags in the response of inflation to tightening resource utilization implied that there could be increasing upside risks to inflation as the labor market tightened further.

Participants agreed that they would continue to monitor closely and assess incoming data before making any further adjustment to the target range for the federal funds rate. Consistent with their expectation that a gradual removal of monetary policy accommodation would be appropriate, many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term if incoming information left the medium-term outlook broadly unchanged. Several participants indicated that their decision about whether to increase the target range in the near term would depend importantly on whether the upcoming economic data boosted their confidence that inflation was headed toward the Committee's objective. A few other participants thought that additional policy firming should be deferred until incoming information confirmed that inflation was clearly on a path toward the Committee's symmetric 2 percent objective. A few participants cautioned that further increases in the target range for the federal funds rate while inflation remained persistently below 2 percent could unduly depress inflation expectations or lead the public to question the Committee's commitment to its longer-run inflation objective.

In their discussion of monetary policy for the period ahead, members judged that information received since the Committee met in September indicated that the labor market had continued to strengthen and that economic activity had been rising at a solid rate despite hurricane-related disruptions. Although the hurricanes depressed payroll employment in September, the unemployment rate declined further. Household spending had been expanding at a moderate rate, and growth in business fixed investment had picked up in recent quarters. Gasoline prices rose in the aftermath of the hurricanes, boosting overall inflation in September; however, inflation for items other than food and energy remained soft. On a 12-month basis, both inflation measures had declined this year and were running below 2 percent. Market-based measures of inflation compensation remained low; survey-based measures of longer-term inflation expectations were little changed, on balance.




Wednesday November 22 2017
US Consumer Sentiment Revised Higher
University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The University of Michigan's consumer sentiment for the United States was revised up to 98.5 in November of 2017 from a preliminary of 97.8. Still, it was lower than 100.7 in October which was the strongest since January 2004. Expected economic conditions deteriorated compared to the previous month although less than initially estimated.

The gauge of consumer expectations fell to 88.9 from 90.5 in October but was higher than a preliminary of 87.6. The current conditions index went down to 113.5 from 116.5 in October and a preliminary reading of 113.6. 

Also, Americans expect the inflation rate to be 2.5 percent, next year, higher than 2.4 percent in October but lower than a preliminary of 2.6 percent. The 5-year expectation was also revised down to 2.4 percent from 2.5 percent in October and in the first estimate. 

What has changed recently is the degree of certainty with which consumers hold their economic expectations. In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment, and inflation. Inflation expectations have shown the smallest dispersion on record, and increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases. To be sure, caution is warranted given that the current expansion will soon be the second longest expansion since the mid-1800s, as well as the potential for significant changes in tax policies and the new Fed leadership and Board members. Interestingly, the data indicate that neither changes in fiscal nor monetary policies have yet had any noticeable impact on consumer expectations. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018, and more importantly for retailers, the best runup to the holiday shopping season in a decade.




Wednesday November 22 2017
US Durable Goods Unexpectedly Fall
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

New orders for US manufactured durable goods shrank 1.2 percent month-over-month in October of 2017, following a 2.2 percent increase in September and compared to market expectations of a 0.3 percent gain. Orders for transport equipment slumped 4.3 percent and those for nondefense aircraft and parts went down 18.6 percent, after jumping 4.4 percent and 33.9 percent respectively in September due to a rise in Boeing aircraft orders. Non-defense capital goods orders excluding aircraft, seen as a proxy for business spending plans went down 0.5 percent, the biggest drop since September of 2016 and following an upwardly revised 2.1 percent gain in the previous month.

Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders decreased 0.8 percent. 

Shipments of manufactured durable goods in October, up five of the last six months, increased $0.3 billion or 0.1 percent to $241.0 billion. This followed a 1.0 percent September increase. Primary metals, up three of the last four months, led the increase, $0.3 billion or 1.5 percent to $19.9 billion. 

Unfilled orders for manufactured durable goods in October, down three of the last four months, decreased $0.5 billion or virtually unchanged to $1,134.6 billion. This followed a 0.2 percent September increase. Transportation equipment, also down three of the last four months, drove the decrease, $2.0 billion or 0.3 percent to $769.7 billion.

Inventories of manufactured durable goods in October, up fifteen of the last sixteen months, increased $0.5 billion or 0.1 percent to $404.1 billion. This followed a 0.6 percent September increase. Primary metals, also up fifteen of the last sixteen months, led the increase, $0.1 billion or 0.4 percent to $33.9 billion. 

Nondefense new orders for capital goods in October decreased $3.4 billion or 4.5 percent to $72.3 billion. Shipments decreased $1.4 billion or 1.9 percent to $72.4 billion. Unfilled orders decreased $0.1 billion or virtually unchanged to $705.2 billion. Inventories increased less than $0.1 billion or virtually unchanged to $179.7 billion. Defense new orders for capital goods in October decreased $1.1 billion or 9.6 percent to $9.9 billion. Shipments increased $0.3 billion or 2.4 percent to $10.9 billion. Unfilled orders decreased $0.9 billion or 0.7 percent to $142.3 billion. Inventories increased $0.2 billion or 1.0 percent to $23.6 billion. 




Wednesday November 22 2017
US Jobless Claims Fall More than Expected
DOL | Joana Ferreira | joana.ferreira@tradingeconomics.com

The number of Americans filing for unemployment benefits decreased by 13 thousand to 239 thousand in the week ended November 18th from the previous week's revised level of 252 thousand and below market expectations of 240 thousand.

Claims have been below 300,000 for 141 straight weeks, the longest such stretch since 1970.

The 4-week moving average was 239,750, an increase of 1,250 from the previous week's revised average. The previous week's average was revised up by 750 from 237,750 to 238,500.

Claims taking procedures continue to be disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 11, an increase of 0.1 percentage point from the previous week's unrevised rate. 

The advance number for seasonally adjusted insured unemployment (continuing jobless claims) during the week ending November 11 was 1,904,000, an increase of 36,000 from the previous week's revised level. The previous week's level was revised up 8,000 from 1,860,000 to 1,868,000. The 4-week moving average was 1,890,000, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 2,000 from 1,887,000 to 1,889,000. 




Wednesday November 22 2017
Nigeria Holds Interest Rate Steady at 14%
Central Bank of Nigeria | Stefanie Moya | stefanie.moya@tradingeconomics.com

The central bank of Nigeria left its benchmark interest rate unchanged at 14 percent on November 21st 2017, in line with market expectations. Policymakers noticed the economic recovery is still fragile and expressed that inflation should be tracked for future monetary policies. Eight of the nine members of the monetary policy committee voted to hold rates, while one voted for a cut.

Excerpts from the Statement by the Central Bank of Nigeria:

Forecasts of key macroeconomic variables indicate a positive outlook for the economy up to Q1 2018. This is predicated on continued implementation of the 2017 budget into early 2018, anticipated improvements in government revenue from the implementation of the Voluntary Asset and Income Declaration Scheme (VAIDS) as well as favourable crude oil prices. The 7 development finance initiatives by the CBN in the real sector, particularly in agriculture, are expected to continue to yield positive results in terms of output expansion and job creation.

Focusing on the downside risks to the outlook, the Committee noted the low fiscal buffers and weak aggregate domestic demand. On the external front, widening global imbalances, and rising geo-political tensions were some of the crucial risks identified.

The Committee was, however, of the view that policy makers must not relent in their aggressive policy initiatives aimed at continuing the positive growth trajectory. The Committee was also concerned about potential adverse external developments and the cautious approach to lending and financial intermediation by domestic deposit money banks.

The Committee noted the significant contribution of food prices to headline inflation and observed that the benefit of base effect on overall headline inflation had substantially dwindled. Members, however, expressed confidence that the tight stance of monetary policy and the stability in the exchange rate of the naira should continue to positively weigh in on price developments. The Committee reaffirmed its commitment to maintaining price stability, which is crucial to sustainable economic growth and development.

While tightening would strengthen the impact of monetary policy on inflation with complementary effects on capital inflows and exchange rate stability, it nevertheless could also potentially dampen the positive outlook for growth and financial stability. On the other hand, whereas loosening would strengthen the outlook for growth by stimulating domestic aggregate demand through reduced cost of borrowing, it could aggravate upward trend in consumer prices and generate exchange rate pressures. The Committee also feels that loosening would worsen the current 10 account balance through increased importation.

On the argument to hold, the Committee believes that key variables have continued to evolve in line with the current stance of macroeconomic policy and should be allowed to fully manifest. Members noted that the developments in output and inflation in particular required effective close monitoring in order to gain clarity on the medium term optimal path of monetary policy.

In summary, the MPC decided to:

(i) Retain the MPR at 14.0 per cent;

(ii) Retain the CRR at 22.5 per cent;

(iii) Retain the Liquidity Ratio at 30.0 per cent

(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.




Wednesday November 22 2017
South Africa Inflation Rate Slows to 4.8% in October
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

South Africa's consumer prices rose 4.8 percent year-on-year in October of 2017, easing from a 5.1 percent increase in September and matching market consensus. Prices slowed mostly for transport, food and miscellaneous goods and services.

Year-on-year, prices increased less for: transport (5.4 percent vs 5.6 percent in September); due to lower cost of fuel (10.8 percent vs 12.2 percent) and private transport operation (9.1 percent vs 10.2 percent); food and non-alcoholic beverages (5.3 percent vs 5.5 percent), mainly processed food (3.7 percent vs 4.3 percent); fish (3.1 percent vs 4.4 percent); milk, eggs and cheese (2.7 percent vs 2.8 percent); and miscellaneous goods and services (7.2 percent vs 7.6 percent). Also, cost eased for household contents and equipment (1.8 percent vs 2.1 percent); recreation and culture (1.5 percent vs 2.2 percent); clothing and footwear (1.9 percent vs 2.3 percent); restaurants and hotels (3.2 percent vs 3.4 percent) and health (6.6 percent vs 7.2 percent). In addition, cost fell more for communication (-1.5 percent vs -1.4 percent).

On the other hand, prices advanced faster for housing and utilities (5.1 percent vs 4.9 percent) and alcoholic beverages and tobacco (5.1 percent vs 4.7 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, petrol and energy fell to 4.5 percent from 4.6 percent, the lowest rate since July 2012.

On a monthly basis, consumer prices went up 0.3 percent, following a 0.5 percent rise in September and in line with market expectations.




Tuesday November 21 2017
Spain Trade Gap Narrows 3.7% YoY In September
Mineco | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Spain's trade deficit shortened to EUR 2.15 billion in September of 2017 from EUR 2.23 billion in the corresponding month of the previous year. Exports jumped 8.5 percent year-on-year to EUR 23.26 billion and imports advanced at a slower 7.4 percent to EUR 25.41 billion. Considering the January to September period, the trade gap widened 40.3 percent to EUR 18.56 billion, as imports grew faster than exports.

Exports jumped 8.5 percent year-on-year to a record high for a September month of EUR 23.26 billion, boosted by sales of equipment goods (20.7 percent); food, beverages and tobacco (2.2 percent); chemicals (4.2 percent) and manufactured consumer goods (5.1 percent). Meanwhile, declines were seen in sales of vehicles (-1.6 percent) and other products (-22.5 percent). Exports to the EU, which accounted for 67 percent of total sales, grew 7.5 percent year-on-year: sales to the euro zone rose 9.5 percent and those to the rest of the European Union increased 0.3 percent. Among major trading partners, exports went up to Germany (21.2 percent);  France (3.7 percent); Italy (4.2 percent); Portugal (8.6 percent) and to the United Kingdom by only 0.7 percent. Outside the EU, exports rose 10.6 percent, with main increases recorded to Morocco (39.6 percent); the US (12.3 percent); Mexico (18 percent) and China (15.8 percent).

Imports advanced at a slower 7.4 percent to EUR 25.41 billion in September of 2017, mainly driven by purchases of equipment goods (7.1 percent); chemicals (4.9 percent); consumer goods (2.9 percent) and vehicles (1 percent). Imports from the EU, which accounted for 55 percent of total purchases, rose a meager 0.5 percent: imports from the euro zone went up 2.4 percent while the ones from the rest of the European Union fell 6.7 percent. Among biggest import partners, purchases advanced from Germany (1 percent); France (3.7 percent) and Italy (11 percent). Outside the EU, purchases increased 17.1 percent, namely those from China (9.5 percent); the US (32.9 percent) and Nigeria (195.3 percent).

Spain recorded a EUR 1.62 billion trade surplus with the EU, higher than a EUR 0.60 billion trade surplus in the same month of 2016. With non-EU countries, the trade deficit widened 32.9 percent year-on-year to EUR 3.76 billion.




Tuesday November 21 2017
Hong Kong Inflation Rate Rises to 1.5% In October
Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Consumer prices in Hong Kong increased 1.5 percent year-on-year in October of 2017, higher than 1.4 percent in September. The slight uptick in annual inflation rate was mainly driven by rising prices of housing and food while cost of miscellaneous services fell less.

Year-on-year, prices advanced faster for housing (2.4 percent vs 2.3 percent in September); food (2.9 percent vs 2.4 percent), particularly food exlcuding meals bought away from home (3.3 percent vs 1.9 percent) and miscellaneous goods (0.6 percent vs 0.5 percent). In addition, cost decreased less for miscellaneous services (-0.4 percent vs -0.6 percent) and durable goods (-2.9 percent vs -3.3 percent).

On the other hand, prices slowed for transport (0.8 percent vs 1.8 percent) while fell for clothing and footwear (-0.5 percent vs 0.4 percent) and alcoholic beverages and tobacco (-1.3 percent vs 0.5 percent).

A Government spokesman said that consumer price inflation stayed fairly modest in October. The spokesman also commented that looking ahead, considering the slow increases in import prices and moderate local cost pressure, inflation risks should remain limited in the near term. The Government will continue to monitor the inflation developments closely, particularly its impact on the lower-income people.




Tuesday November 21 2017
Swiss Trade Surplus Narrows 8.3% in October
Swiss Customs Administration l Chusnul Ch Manan | chusnul@tradingeconomics.com

Swiss trade surplus narrowed 8.27 percent to CHF 2.33 billion in October 2017 from CHF 2.54 billion in the same month a year earlier and below market expectations of CHF 3.21 billion.

Year-on-year, exports increased by 8.4 percent to CHF 19.33 billion in October, mainly due to a rise in sales of chemical and pharmaceutical products (3.2 percent); precision instruments (10.1 percent); jewelry and bijouterie (15.86 percent); machinery and electronics (8.8 percent); watches (9.3 percent); metal (20.9 percent), and food and beverages (10.6 percent).
 
Among major trade partners, sales increased to EU (4.9 percent), mainly from France (7 percent), Italy (20.6 percent), and Austria (31.6 percent); the US (15.8 percent); Japan (27.6 percent), and Hong Kong (19.3  percent). Meanwhile, sales went down to Germany (-2 percent); South Korea (-8.3 percent), and China (-4.1 percent).
 
Imports rose 11.1 percent to CHF 17 billion, boosted by an increase in purchases of chemical and pharmaceutical products (0.1 percent); machinery and electronics (5.9 percent); vehicles (5.2 percent); food, beverages and tobacco (8.7 percent); metals (22.5 percent); textiles, clothing, footwear (12 percent), and jewelry and bijouterie (73.9 percent).
 
Among major trade partners, purchases went up from China (11.3 percent); the EU (9.2 percent), mainly from Germany (15.2 percent), France (30.9 percent), and Italy (11 percent); Hong Kong (26.2 percent). In contrast, purchases fell from Japan (-45.4 percent) and the US (-3.3 percent).
 
In January-Octoberr 2017, the trade surplus narrowed to CHF 29.73 billion from CHF 30.89 billion in the same period of 2016.




Monday November 20 2017
Russia Jobless Rate Down to 5.1%
Federal State Statistics Service | Joana Taborda | joana.taborda@tradingeconomics.com

Russian unemployment rate fell to 5.1 percent in October of 2017 from 5.4 percent in the same month of the previous year, matching market expectations. In the previous month, the unemployment was slightly lower at 5 percent.

The number of unemployed people fell by 240 thousand to 3.86 million from 4.1 million in the corresponding month of the previous year. Compared to September, the number of unemployed increased by 40 thousand from 3.82 million.

Real wages went up 4.3 percent year-on-year in October, following an upwardly revised 4.4 percent gain in September and beating market expectations of 2.8 percent. Average nominal wages jumped 7.1 percent to RUB 38,275 while the annual inflation rate slowed to 2.7 percent, the lowest since at least 1991. Meanwhile, real disposable income dropped 1.3 percent, more than a 0.3 percent decline in September.




Monday November 20 2017
Chile GDP Growth At 1-1/2-Year High in Q3
Banco Central de Chile | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The economy of Chile advanced 2.2 percent year-on-year in the third quarter of 2017, following an upwardly revised 1 percent growth in the previous period and matching market consensus. It was the strongest expansion since the first quarter of 2016, as household spending rose faster and exports rebounded while investment fell less.

Year-on-year, household spending increased 2.8 percent, higher than a 2.6 percent rise in Q2. Gross fixed capital investment contracted less (-2.3 percent compared to -4.6 percent in Q2), but marked the fifth consecutive quarter of declines. Construction investment fell 7.5 percent (-7.6 percent in Q2) and investment in machinery and equipment advanced at a faster pace (6.4 percent compared to 0.7 percent in Q2). Meanwhile, government spending slowed (2.2 percent compared to 3 percent in Q2). Exports rose 3 percent, recovering from a 3 percent decrease in Q2, as sales of industrial, agricultural and mining products rebounded. Meantime, imports went up at a softer 4.4 percent compared to a 6.7 percent surge in Q2.

On the production side, mining activity rebounded sharply (7.5 percent compared to -3 percent), mainly driven by copper production (8.2 percent compared to -2.3 percent). Also, manufacturing grew faster (1 percent compared to 0.4 percent), boosted by stronger production of wood and furniture; crude oil refining and metal products, machinery and equipment. In addition, higher growth rates were also recorded for: fisheries (14 percent compared to 8.9 percent in Q2); internal trade (4.4 percent compared to 3.5 percent); utilities (4.1 percent compared to 0.8 percent); transport (2 percent compared to 0.8 percent); financial services (4.3 percent compared to 3.6 percent) and personal services (3.1 percent compared to 2.8 percent). On the other hand, output grew less for restaurants and hotels (0.9 percent compared to 1.1 percent); communication and information (3.8 percent compared to 4 percent); real estate activities (2.5 percent compared to 2.9 percent) and public administration (1.8 percent compared to 2.3 percent). Meantime, output declines were recorded for agriculture (-1.3 percent compared to 0.3 percent); construction (-6 percent compared to -3.7 percent) and business services (-1.7 percent compared to -2.3 percent).

On a quarterly basis, the GDP expanded 1.5 percent, following an upwardly revised 0.9 percent growth in Q2.




Monday November 20 2017
Nigeria GDP Grows 1.4% YoY in Q3
National Bureau of Statistics | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The Nigerian economy advanced 1.4 percent year-on-year in the third quarter of 2017, accelerating from an upwardly revised 0.72 percent growth in the previous period. It is the second consecutive quarter of expansion as oil production continued to recover.

The oil sector surged 25.89 percent year-on-year, following an upwardly revised 3.53 percent increase in the previous period. The country produced 2.03 million barrels of crude oil per day, up from 1.61 mbpd a year earlier. As a result, the oil sector accounted for 10.04 percent of GDP compared to 8.09 percent a year earlier. The non-oil sector declined 0.76 percent, compared to a 0.44 percent growth in the previous period. 

Output expanded faster for mining and quarrying (25.44 percent vs 3.51 percent); agriculture (3.06 percent vs 3.01 percent) and recovered for food and accomodation services (0.18 percent vs -4.05 percent) and arts, entertainment and recreation (0.44 percent vs -0.62 percent). In addition, output growth slowed for: electricity, gas, steam and air conditioning supply (11.46 percent vs 35.50 percent) and water supply, sewerage, waste management and remediation (0.33 percent vs 3.45 percent). In contrast,  contraction was observed for: manufacturing (-2.85 percent vs 0.64 percent in Q2); construction (-0.46 percent vs 0.13 percent); internal trade (-1.74 percent vs -1.62 percent); transportation and storage (-6.25 percent vs -6.18 percent); information and telecommunication (-4.48 percent vs -1.15 percent); financial and insurance (-5.96 percent vs 10.45); real estate activities (-4.12 percent vs -3.53 percent); public administration (-0.72 percent vs 1.63 percent); education (-1.22 percent vs -1.34 percent) and social services (-0.85 percent vs -0.96 percent).

On a quarterly basis, the economy expanded 8.97 percent, following an upwardly revised 3.40 percent rise in the previous quarter. 




Monday November 20 2017
Thailand Q3 GDP Growth Strongest in 4-1/2 Years
Nesdb, Thailand | Chusnul Ch Manan | chusnul@tradingeconomics.com

Thailand's GDP advanced 4.3 percent year-on-year in the September quarter of 2017, compared to an upwardly revised 3.8 percent growth in the previous period and beating market consensus of a 3.8 percent growth. It was the strongest expansion since the first quarter 2013, boosted by faster rises in private consumption, government spending, investment and exports.

In the three months to September, private consumption rose 3.1 percent, slightly faster than a 3.0 percent in the prior quarter. The result was mainly due to a favorable growth of non-farming income and personal loan as well as low level of inlation and interest rate. This was offset by  deceleration in farming income, due to fall in major corps prices.
 
Government spending grew 2.8 percent, after a 2.6 percent rise in the September quarter. This acceleration was mainly driven by marked increases in disbursement from construction of water management system, water resources, and urgent road transport system project.
 
Gross fixed capital formation went up by 1.2 percent, much stronger than a 0.4 percent growth in Q2. Public investment decreased by 2.6 percent, improving from a 7 percent fall in Q2. On the contrary, private investment rose (2.9 percent from 3.2 percent in Q2), due to expansions in  machinery and equipment (4.3 percent from 3.2 percent).
 
Exports of goods and services went up by 7.4 percent, accelerating from a 6 percent increase in the first quarter. Imports of goods and services rose 6.7 percent (from 8.2 percent in Q2).
 
On the production side, the agriculture sector rose 9.9 percent, slowing from a 16.1 percent expansion in the September quarter. The rise was supported by agriculture, hunting and forestry (10.1 percent from 17.4percent in Q2) and fishing (2.4 percent from 2.4 percent). The non-agricultural sector expanded by 3.8 percent, compared to a 2.8 percent increase previously. An increase was seen for: manufacturing (4.3 percent from 1.1 percent in Q2); wholesale and retail trade (6.4 percent compared to 6 percent in Q2), while electricity, gas & water supply rebounded (3.5 percent from -1.3 percent); hotels and restaurants (6.7 percent compared to 7.5 percent); transportation (8.1 percent compared to 8.7 percent); financial intermediation (4.8 percent compared to 5.1 percent); real estate (4.2 percent compared to 4.4 percent); health and social work (3.6 percent from 3.8 percent) and other community, social and personal services activities (4.9 percent from 5.9 percent). On the other hand, a decline was seen for: construction (-1.7 percent from -6.2 percent) and mining & quarrying (-8.4 percent from -6.9 percent), private household with employed persons (-7.2 percent from -2.8 percent), and education (-0.3 percent compared to 0.4 percent).
 
The NESD predicted 2017 GDP growth at 3.9 percent, compared with a 3.5-4.0 percent range seen earlier, and it revised up the export outlook to a 8.6 percent increase from 5.7 percent. In 2016, the economy grew by 3.2 percent. For 2018, it forecasts GDP growth of 3.6-4.6 percent, with exports seen up 5 percent.
 
On a quarter-on-quarter seasonally adjusted basis, the economy expanded 1 percent in Q3 of 2017, slower than an upwardly revised 1.4 percent expansion in the prior quarter while markets estimated a 0.75 percent growth. It was the weakest quarterly growth since the fourth quarter 2016.
 
 




Monday November 20 2017
Thailand Economy Expands 1% QoQ in Q3
NESDB, Thailand l Chusnul Ch Manan | chusnul@tradingeconomics.com

The Thailand economy grew by 1 percent quarter-on-quarter in the third quarter of 2017, slower than an upwardly revised 1.4 percent expansion in the prior quarter but beating markets expectations of 0.75 percent growth. It was the weakest expansion in three quarters, as private consumption growth slowed markedly and government spending and investment continued to fall.

In the September quarter, private consumption expanded only 0.3 percent, much slower than a 1 percent increase in the June quarter. Also, government spending (-4.1 percent from -1.3 percent) and fixed capital formation (-0.8 percent from -2.7 percent) continued to decline. On the positive note, exports of goods and services went up 2 percent (from 1.3 percent) while imports of goods and services rose less (0.2 percent from 2.2 percent). 
 
On the production side, financial intermediation grew only 0.8 percent (1.9 percent in Q2) and agriculture shrank by 4.7 percent (from 10.4 percent in Q2). Meanwhile, faset expansion was recorded for manufacturing (3 percent from 1 percent) and wholesale and retail trade (1.7 percent from 1.2 percent). 
 
Year-on-year, the country's GDP expanded 4.3 percent from a year earlier in the September quarter 2017, compared to an upwardly revised 3.8 percent growth in the second quarter 2017 and matching market expectations. It was the strongest expansion since the first quarter 2013.
 
 




Monday November 20 2017
Japan October Trade Surplus Narrows 41% YoY
Ministry of Finance, Japan | Chusnul Ch Manan | chusnul@tradingeconomics.com

Japan's trade surplus narrowed 40.7 percent to JPY 285.4 billion in October 2017 from JPY 481.26 billion in the same month a year earlier and below market consensus of a JPY 330 billion surplus. Exports rose 14 percent from a year earlier to JPY 6,693.1 billion while imports increased at a faster 18.9 percent to JPY 6,407.7 billion.

Exports from Japan rose 14 percent from the previous year to JPY 6,693.1 billion in October, easing from a 14.1 percent gain in the previous month and missing market expectations of 15.8 percent. It was the 11th consecutive increase in exports, mainly boosted by a surge in exports of cars (6 percent), parts of motor vehicles (6.5 percent), and chemical products (23.4 percent). Also, sales of machinery went up 17.8 percent, boosted by power generating machine (10.5 percent) and semicon machinery (29.5 percent). Sales of manufactured goods increased by 15.2 percent, led by iron and steel products (15.6 percent). In addition, exports of electrical machinery rose 11.4 percent, mainly driven by semiconductors (9.1 percent) and IC (10.5 percent). Exports of others rose 16.5 percent, driven by scientific, optical instruments (16.1 percent).
 
Among major trading partners, exports rose to China (26 percent); the US (7.1 percent); the EU (15.8 percent), of which Germany (10.2 percent); the ASEAN (19.5 percent), South Korea (18.3 percent), and Taiwan (4.8 percent).
 
Imports to Japan rose at a faster 18.9 percent to JPY 6,407.7 billion, accelerating from a 12 percent expansion in the previous month and missing expectations of 20.2 percent. Imports grew for mineral fuels (37.5 percent), of which petroleum (43 percent), LNG (15.5 percent) and coal (36.6 percent); electrical machinery (15 percent), of which semiconductors (23 percent) and IC (33.3 percent); foodstuff (21.1 percent); raw materials (17. 5 percent); chemicals (9.5 percent); manufactured goods (17.1 percent), of which nonferrous metals (28.4 percent); machinery (10.3 percent); transport equipment (1.9 percent); and others (21.1 percent).
 
Among major trading partners, imports rose from China (14.3 percent); the US (3.1 percent); the ASEAN (21.8 percent); Taiwan (22.7 percent); South Korea (12.2 percent); the EU (18.1 percent), of which Germany (19.8 percent) and Australia (12.6 percent).
 




Saturday November 18 2017
Week Ahead
Joana Taborda | joana.taborda@tradingeconomics.com

In the US, the most important events are the FOMC minutes release, existing home sales and durable goods. In the UK, investors will be waiting for the Autumn Budget. Elsewhere, flash PMIs for the Euro Area, Germany, France and Japan will also be in the spotlight.

In the US, investors will be waiting for the FOMC minutes release for further clues on the timing of the next Fed rate hike. Markets are anticipating a 25bps rise in the fed funds rate in the December meeting. Other important data include existing home sales, durable goods, final figures for Michigan consumer sentiment and flash PMI figures.
 
Elsewhere in America: Canada retail sales; mid-month inflation figures for Brazil and Mexico; final figures for Mexico GDP growth; Colombia interest rate decision and Chile GDP growth. On Sunday November 19th, Chileans will choose the next President and investors bet on the return of Sebastián Piñera.
 
In the UK, the Chancellor Philip Hammond will deliver the Autumn Budget. Other important data include government borrowing numbers and the second estimate for GDP growth.
 
In Europe, flash PMI readings for the Euro Area, Germany and France; Eurozone consumer confidence; Germany IFO business climate and final estimates for GDP growth; and the minutes from last ECB monetary policy meeting will also be in the spotlight.
 
In Asia, important data include flash manufacturing PMI for Japan; Thailand GDP growth; final GDP growth figures for Singapore and Taiwan. In Australia, the RBA will also publish minutes from its last monetary policy meeting.
 
In Africa, investors will be waiting for the inflation rate for South Africa and for monetary policy updates for South Africa, Nigeria and Kenya.




Friday November 17 2017
US Housing Starts at 1-Year High
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Housing starts in the United States jumped 13.7 percent month-over-month to an annualized rate of 1,290 thousand in October of 2017, the highest in a year and beating market expectations of a 5.6 percent rise to 1,180 thousand. It follows an upwardly revised 1,135 thousand in September, which was the lowest reading since September of 2016, mainly due to disruptions caused by Hurricanes Harvey and Irma in the South.

Single-family starts, the largest segment of the market, increased 5.3 percent to 877 thousand, led by a 16.6 percent recovery in the South after damages causaded by Hurricanes Harvey and Irma. Also, the volatile multi-family segment went up 37.4 percent to 393 thousand. Overall, housing starts rose in the South (17.2 percent to 621 thousand), the Midwest (18.4 percent to 212 thousand) and the Northeast (42.2 percent to 145 thousand), but fell in the West (-3.7 percent to 312 thousand).

Building permits increased 5.9 percent to a seasonally adjusted annualized rate of 1,297 thousand, higher than 1,225 thousand in September and market expectations of 1,240 thousand. It is the biggest value so far this year. Permits for construction of single-family homes increased 1.9 percent to 839 thousand while for multi-family homes permits rose 13.4 percent to 416 thousand. Permits increased in all main areas: the South (3 percent to 613 thousand), the West (13 percent to 366 thousand), the Midwest (3.8 percent to 192 thousand) and the Northeast (4.1 percent to 126 thousand).

Year-on-year, starts shrank 2.9 percent while permits gained 0.9 percent.




Friday November 17 2017
Canada Inflation Rate Slows to 1.4% in October, Matches Forecasts
Statistics Canada |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Consumer prices in Canada increased 1.4 percent year-on-year in October of 2017, following a 1.6 percent rise in the previous month, and matching market expectations. The decline in annual inflation rate was mainly led by a slowdown in prices of gasoline and shelter. Meanwhile, the BoC's annual core inflation, which excludes volatile items, went up to 0.9 percent compared to 0.8 percent in September.

Transportation prices rose 3 percent on a year-over-year basis in October, following a 3.8 percent increase in September. This deceleration was led by gasoline prices, which advanced 6.5 percent after increasing 14.1 percent the previous month in the aftermath of Hurricane Harvey. At the same time, the purchase of passenger vehicles index rose 1.5 percent month-over-month in October, providing the impetus for the largest year-over-year gain in this index since March 2017.

The shelter index rose 1.2 percent after an increase of 1.4 percent in September.

Consumer prices for food were up 1.3 percent, after rising 1.4 percent in the previous month.

The recreation, education and reading index increased 1.5 percent, following a 2.1 percent gain in September. Prices for travel tours contributed the most to this deceleration, increasing 4.4 percent, after a 7.3 percent gain in September. The recreational services index increased 5.2 percent, following a 14.7 percent gain in September. Meanwhile, prices for digital computing equipment and devices (-4.4%) declined at a slower rate on a year-over-year basis in October than in September.

Consumer prices for household operations, furnishings and equipment rose 0.2 percent, after declining year over year for three consecutive months. Prices for telephone services increased 3.9 percent on a monthly basis, leading to a 0.1 percent year-over-year decline in October, following a 3.1 percent decrease in September. Prices for child care services went up 2.6 percent. Additionally, the tools and other household equipment index recorded a smaller year-over-year increase for the month than was seen in September.

The clothing and footwear index went down 1.5 percent in October 2017, after falling 2.3 percent in the prior month.

On a monthly basis, consumer prices edged up 0.1 percent, following a 0.2 percent increase in September.




Friday November 17 2017
Malaysia Q3 GDP Growth Strongest In Over 3 Years
Bank Negara Malaysia l Rida Husna | rida@tradingeconomics.com

The Malaysian economy advanced 6.2 percent year-on-year in the September quarter of 2017, compared to a 5.8 percent growth in the previous three months and beating market consensus of a 5.4 percent expansion. It was the strongest growth since the June quarter 2014, boosted by robust private consumption and faster rises in government spending, investment and exports.

In the third quarter, private consumption increased by 7.2 percent year-on-year, following a 7.1 percent rise in the previous period, supported by consumption on food & non-alcoholic beverages, communication and housing & utilities. Also, goverment spending rose 4.3 percent, faster than a 3.3 percent increase in the prior three months. In addition, gross fixed capital formation expanded 6.7 percent, much faster than a 4.1 percent growth in the preceding quarter, driven by machinery & equipment and recovery in other asset. Exports grew by 11.8 percent, higher than  a 9.6 percent rise in the June quarter. Imports advanced 13.4 percent, compared to a 10.7 percent rise in the previous three months. 

On the production side, the services sector went up by 6.6 percent, stronger than a 6.3 percent rise in Q2. At the same time, the manufacturing sector rose 7.0 percent, after growing 6.0 percent in the June quarter. Also, the mining & quarrying sector increased at a faster 3.1 percent (from 0.2 percent). Meantime, the construction sector grew by 6.1 percent (after a 8.3 percent rise in Q2). The agriculture sector grew by 4.1 percent, compared to a 5.9 percent increase in the June quarter. 

Moving forward, the economy is expected  to reach  the upper range of the official projection of 5.2 – 5.7 percent in 2017, supported by domestic demand. Meantime, exports are expected to continue benefiting from the favourable global demand conditions. Headline inflation is expected to average at the upper end of the forecast range of 3 – 4 percent for 2017 as a whole.

On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.8 percent, faster than a 1.3 percent growth in the previous period. 




Thursday November 16 2017
Indonesia Leaves Rates Steady
Bank Indonesia | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia left its benchmark repo rate unchanged at 4.25 percent on November 16th 2017, in line with market expectations. Policymakers said the current policy rate is adequate to control inflation, to maintain a healthy current account deficit and to build economic growth momentum. So far this year, the central bank already cut the borrowing cost twice by a total of 50bps in an attempt to boost the economy. The lending and the deposit facility rates were also left steady at 5 percent and 3.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The decision was consistent with efforts to maintain macroeconomic and financial system stability as well as build economic recovery momentum, while paying due consideration to global and domestic economic dynamics. Bank Indonesia believes the current policy rate is adequate to control inflation within the target corridor and maintain a healthy current account deficit. Furthermore, the domestic economy has continued to grow, with a more equitable and balanced structure. Nonetheless, Bank Indonesia shall remain vigilant of the risks, including the global risks linked to the plans to tighten monetary policy in several advanced countries, as well as domestic risks, such as the limited growth in household consumption and banking intermediary. Bank Indonesia will continue to coordinate with the Government to reinforce the policy mix in order to maintain macroeconomic stability and financial system stability as well as to enhance structural reforms to strengthen fundamentals of Indonesia’s economy.

The global economy has continued to expand. The global economy is predicted to accelerate by 3.6% on 2017 and 2018 on the back of growth in China, Japan and Europe that has beaten previous expectations, coupled with solid economic gains in the United States. Strong exports and domestic demand are driving China’s economy and restoring consumer confidence. Furthermore, Japan’s economic outlook has been upgraded in line with the ongoing export recovery. In Europe, the economic growth projection has also been revised upwards on export performance, supported by improving world trade and domestic economic recovery. Meanwhile, tenacious consumption and increasing investment contributed to the US economic gains. Congruent with the improving world economic outlook, world trade volume (WTV) and international commodity prices are both expected to surpass the previous projections. Moving forward, Bank Indonesia shall continue to monitor the global risks, including potentially tighter monetary policy in advanced countries as well as geopolitical factors.

Bank Indonesia predicts national economic growth in 2017 at 5.1%, improving thereafter to 5.1%-5.5% in 2018.

Throughout 2017, the balance of payments is expected to remain positive on the back of capital and financial account surplus, with current account deficit maintained at below 2% of GDP.