Wednesday June 28 2017
Ghana GDP Grows The Most Since Q3 2014
Ghana Statistical Service | Luisa Carvalho |

The Ghana's economy advanced 6.6 percent year-on-year in the first three months of 2017, following a 4.1 percent expansion in the previous period. It is the highest growth rate since the third quarter of 2014 as manufacturing recovered; oil and gas output jumped and agriculture rose the most in nearly three years while the services sector slowed. A year earlier, the GDP growth was lower at 4.4 percent. The government expects the economy to advance 6.3 percent in 2017.

The industry sector rose 11.5 percent, following a 3 percent increase in Q4. Output rebounded for manufacturing (5.9 percent vs -1.1 percent in Q4) and jumped for mining and quarrying (32.8 percent vs 8.9 percent in Q4), namely led by oil and gas (58.9 percent). Meanwhile, growth slowed for electricity (2.9 percent vs 7.2 percent in Q4) and water and sewerage (0.9 percent vs 2.6 percent in Q4).

Agriculture surged 7.6 percent, compared to a 1.9 percent rise in Q4. 

The services sector increased 3.7 percent (from 6.3 percent in Q4), as output went up at a softer pace for: finance and insurance (2 percent vs 3.4 percent in Q4); real estate, professional, administrative and others (1.6 percent vs 9.3 percent in Q4); information and communication (12 percent vs 19.2 percent in Q4) and declined for hotels and restaurants (-2 percent vs 2.7 percent in Q4) and public administration (-6.5 percent vs 5.3 percent in Q4). In contrast, both trade (6.4 percent vs 3.8 percent in Q4) and transport and storage (3.5 percent vs 2.7 percent in Q4) expanded faster.

On a quarterly basis, the GDP grew 1.5 percent, accelerating from 1.1 percent in the previous quarter. 

Wednesday June 28 2017
Italy Inflation Rate Slows To 5-Month Low In June
Istat | Joana Ferreira |

Italian consumer prices are expected to increase by 1.2 percent year-on-year in June 2017, easing from a 1.4 percent gain in the previous month and missing market expectations of 1.4 percent. It was the lowest inflation rate since January, as prices rose at a slower pace for food and transport.

Year-on-year, prices rose at a slower pace for food and non-alcoholic beverages (1 percent from 1.9 in May), transport (3 percent from 3.7 percent), health (0.2 percent from 0.3 percent), and recreation and culture (0.3 percent from 0.5 percent). Also, upward pressure came from: Restaurants and hotels (2.1 percent from 1.9 percent in May); housing, water, electricity, gas and other fuels (inflation steady at 3 percent); miscellaneous goods and services (1 percent from 0.9 percent); and clothing and footwear (inflation steady at 0.4 percent).

Annual core inflation rate, which excludes energy and unprocessed food, rose to 0.9 percent from 0.7 percent in May. Excluding only energy, the inflation edged down to 0.9 percent from 1 percent in the previous month.

On a monthly basis, consumer prices fell 0.1 percent after decreasing by 0.2 percent in May and missing market consensus of a 0.1 percent gain. Prices fell for unprocessed food (-2 percent) and non-regulated energy products (-1.5 percent) while cost of services related to transport increased (1.1 percent).

The harmonized index rose by 1.2 percent on the year and declined by 0.2 percent from the previous month.

Tuesday June 27 2017
Mexico Trade Deficit Widens Sharply In May
INEGI |Luisa Carvalho |

Mexico posted a trade deficit of USD 1079.2 million in May of 2017 compared to a USD 442.1 million trade shortfall a year earlier and missing market expectations of a USD 1000 million surplus. It is the largest trade deficit for a May month since 2015, as exports rose 12.9 percent and imports advanced at a faster 14.7 percent.

Exports rose 12.9 percent year-on-year to USD 35.47 billion, following an upwardly revised 4.5 percent in April and marking the seventh straight annual gain. Non-oil sales, which account for 95 percent of total exports increased 13.8 percent while oil sales declined 3.5 percent.

Exports of manufactured products rose 12.9 percent, accounting for nearly 90 percent, driven by sales of food, beverages and tobacco (28.4 percent); equipment and electric and electronic apparatus (19.7 percent); special machinery and equipment for industries (16.8 percent); automotive products (13.8 percent) and professional and scientific equipment (11 percent). In addition, sales of agricultural and fisheries jumped 24.3 percent, mainly those of avocados (104.1 percent), cattle (77.9 percent), grapes and raisins (44.7 percent) and fresh vegetables (39.7 percent). Also, shipments of mining products surged 60.5 percent.

Exports to the United States grew 12.6 percent, accounting for more than 80 percent of total non-oil shipments. Auto sales rose 12.4 percent, accounting for more than 27 percent, and exports of other products advanced 12.6 percent. Sales to the rest of the world jumped 20.4 percent, with autos increasing 22 percent and other products by 19.7 percent.

Imports advanced at a faster 14.7 percent to USD 36.54 billion, following a 5 percent decrease in the previous month. Purchases were boosted by intermediate goods (15.9 percent), consumption goods (10.7 percent) and capital goods (11.1 percent).

On a seasonally adjusted basis, exports went up 0.74 percent to USD 33.21 billion, led by a 1.68 percent increase in non-oil sales while oil shipments fell 15.63 percent. Imports rose 2.91 percent to USD 33.94 billion, widening the trade deficit to USD 733 million.

Tuesday June 27 2017
Factors Weighing On Eurozone Inflation Are Mainly Temporary
ECB | Joana Ferreira |

While there are still factors that are weighing on the path of inflation, at present they are mainly temporary factors that typically the central bank can look through, President Mario Draghi said at the ECB Forum on Central Banking. Draghi also said that he was confident the current monetary policy has been effective in raising demand and supporting growth, and that any adjustments to the stance have to be made gradually, and only when the improving dynamics that justify them appear sufficiently secure.

Excerpts from the introductory speech by Mario Draghi, President of the ECB, at the ECB Forum on Central Banking, Sintra, 27 June 2017:

Now, we can be confident that our policy is working and that those risks have abated. The threat of deflation is gone and reflationary forces are at play. And since one of the drivers of inflation today is positive supply developments, this should feed back positively into potential output rather than produce hysteresis. In these conditions, we can be more assured about the return of inflation to our objective than we were a few years ago.

This more favourable balance of risks has been already reflected in our monetary policy stance, via the adjustments we have made to our forward guidance.

Another considerable change from three years ago is the clarification of the political outlook in the euro area. For years, the euro area has lived under a cloud of uncertainty about whether the necessary reforms would be implemented at both the domestic and Union levels. This acted as a brake on confidence and investment, which is tantamount to an implicit tightening of economic conditions. Today, things have changed. Political winds are becoming tailwinds. There is newfound confidence in the reform process, and newfound support for European cohesion, which could help unleash pent-up demand and investment.

Nevertheless, we are still in a situation of continuing slack, and where a long period of subpar inflation translates into a slower return of inflation to our objective. Inflation dynamics are not yet durable and self-sustaining. So our monetary policy needs to be persist.

This is why the Governing Council has repeatedly emphasised that a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up, and to support headline inflation in the medium term. This is reflected in our forward guidance on net asset purchases and interest rates, as well as our decision to reinvest the principal payments received under the APP for as long as necessary.

With reflationary dynamics slowly taking hold, we now need to ensure that overall financing conditions continue to support that reflationary process, until they are more durable and self-sustaining.

As the economy continues to recover, a constant policy stance will become more accommodative, and the central bank can accompany the recovery by adjusting the parameters of its policy instruments – not in order to tighten the policy stance, but to keep it broadly unchanged.

But there is an important caveat that we need to consider. Financing conditions are not only determined by the calibration of central bank instruments, but also by other market prices, some of which are significantly affected by global developments.

In the past, especially in times of global uncertainty, volatility in financial market prices has at times caused an unwarranted tightening of financial conditions, which has necessitated a monetary policy response.

So in the current context where global uncertainties remain elevated, there are strong grounds for prudence in the adjustment of monetary policy parameters, even when accompanying the recovery. Any adjustments to our stance have to be made gradually, and only when the improving dynamics that justify them appear sufficiently secure.

Tuesday June 27 2017
Sweden Trade Balance Swings to Surplus In May
Statistics Sweden |Luisa Carvalho |

Sweden posted a SEK 2.8 billion trade surplus in May of 2017 compared with a SEK 3.6 billion gap a year ago. Year-on-year, exports rose 18 percent and imports increased at a slower 11 percent. Trade with countries outside the EU resulted in a surplus of SEK 15.1 billion, while EU trade resulted in a deficit of SEK 12.3 billion.

In May 2017, Swedish exports of goods rose 18 percent to SEK 114 billion, while imports of goods increased at a slower 11 percent to SEK 111.2 billion.

Trade with countries outside the EU resulted in a surplus of SEK 15.1 billion, while EU trade resulted in a deficit of SEK 12.3 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 0.5 billion in May 2017, compared with a shortfall of SEK 0.7 billion in April of 2017. The corresponding figure for March 2017 was a gap of SEK 1.2 billion.

Considering the first five months of 2017, the value of exports increased by 11.5 percent compared with the corresponding period one year ago, and the value of imports rose 11.8 percent. Exports amounted to SEK 536.6 billion and imports were valued at SEK 536.7 billion, resulting in a net trade deficit of SEK 0.1 billion for January-May 2017. The corresponding surplus figure for these months a year earlier was SEK 1.3 billion.

Monday June 26 2017
New Zealand Trade Surplus Narrows In May
Mario |

New Zealand trade surplus narrowed to NZD 103 million in May of 2017 compared to NZD 343 million in the same month of the previous year and expectations of a NZD 420 million surplus. It was the third straight monthly surplus after 8 consecutive deficits, and leaves the year-to-date trade surplus at NZD 641 million (vs NZD 1261 million in the first five months of last year). Exports advanced to NZD 4952 million (or 8.7 percent year-on-year from a downwardly revised 8.6 percent in April), while imports jumped to NZD 4849 million (or 15.1 percent compared to a downwardly revised 4.7 percent). The annual trade deficit for the year ended May of 2017 widened to NZD 3.8 billion, from NZD 3.6 billion in April of 2017.

The 8.7 percent year-on-year jump in exports was mainly explained by a 41.8 percent surge in exports of milk powder, butter & cheese (vs 35.4 percent in the previous month). Logs, wood & wood articles climbed only 2.3 percent after advancing 17.7 percent in April. Exports to China increased at a softer pace of 16.8 percent in May after surging 22.5 percent in the previous month. Growth of exports to Korea also softened to 10 percent (vs 15.4 percent). Contrastingly, shipments to Japan grew at a faster rate, increasing by 33.8 percent (versus 12.7 percent). Exports to the United States (+2.4 percent), the European Union (+0.3 percent), and Australia (+0.1 percent) expanded modestly.

Meanwhile, the 15.1 percent year-on-year jump in imports was mainly triggered by a 70.7 percent surge in petroleum & products, following a 21.2 percent increase in the previous month. Imports of vehicles, parts, and accessories also expanded at a faster pace of 22.4 percent (vs 8.1 percent in April). Imports from Australia expanded by 23.6 percent; Japan by 14.8 percent; China by 12.7 percent; and the United States by 4.4 percent. Contrastingly, imports from the European Union edged down by 0.2 percent in May. 

Monday June 26 2017
Mexico Jobless Rate Falls To 3.6% In May
INEGI |Luisa Carvalho |

The unemployment rate in Mexico decreased to 3.6 percent in May of 2017 from 4 percent a year ago and in line with market expectations. On a seasonally adjusted basis, the jobless rate fell to 3.5 percent from 3.6 percent in April.

Compared to May 2016, the unemployment rate declined for both men (3.4 percent from 4 percent) and women (3.8 from 4.1 percent). Among unemployed people, 17.2 percent had not completed secondary education and 82.8 percent had a higher education.

Those underemployed accounted for 6.9 percent of total employed, lower than 8.5 percent a year earlier.

The participation rate decreased to 59.42 percent from 60.10 percent in May of 2016.

Monday June 26 2017
US Durable Goods Orders Fall For 2nd Month
US Census Bureau | Joana Taborda |

New orders for US manufactured durable goods fell 1.1 percent month-over-month in May of 2017, following an upwardly revised 0.9 percent drop in April. Figures came worse than market expectations of a 0.9 percent decline, mainly driven by a 3.4 percent slump in transport equipment. Non-defense capital goods orders excluding aircraft, seen as a proxy for business spending plans decreased 0.2 percent.

Excluding transportation, new orders increased 0.1 percent. Excluding defense, new orders decreased 0.6 percent. 

Shipments of manufactured durable goods in May, up following two consecutive monthly decreases, increased $1.8 billion or 0.8 percent to $234.9 billion. This followed a 0.3 percent April decrease. Transportation equipment, up following four consecutive monthly decreases, led the increase, $1.5 billion or 1.9 percent to $78.8 billion. 

Unfilled orders for manufactured durable goods in May, down following two consecutive monthly increases, decreased $2.3 billion or 0.2 percent to $1,120.1 billion. This followed a 0.2 percent April increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.4 billion or 0.4 percent to $762.8 billion. 

Inventories of manufactured durable goods in May, up ten of the last eleven months, increased $0.7 billion or 0.2 percent to $395.4 billion. This followed a 0.2 percent April increase. Computers and electronic products, up nine of the last ten months, led the increase, $0.1 billion or 0.3 percent to $44.3 billion. 

Nondefense new orders for capital goods in May decreased $1.7 billion or 2.4 percent to $68.3 billion. Shipments increased $0.3 billion or 0.4 percent to $70.1 billion. Unfilled orders decreased $1.8 billion or 0.3 percent to $695.0 billion. Inventories decreased less than $0.1 billion or virtually unchanged to $176.8 billion.

Defense new orders for capital goods in May decreased $0.8 billion or 8.2 percent to $9.2 billion. Shipments increased less than $0.1 billion or 0.3 percent to $10.2 billion. Unfilled orders decreased $1.1 billion or 0.8 percent to $140.4 billion. Inventories increased less than $0.1 billion or 0.1 percent to $22.5 billion. 

Monday June 26 2017
Hong Kong Trade Gap Widens 40% YoY In May
Statistics Department of Hong Kong l Yekaterina Guchshina |

Hong Kong's trade deficit increased by 40 percent to HKD 35.65 billion in May 2017 from HKD 26.2 billion in the same month of the previous year, as exports went up 4 percent and imports rose at a faster 6.6 percent. Considering the five months of 2017, the trade deficit widened to HKD 180.5 billion from HKD 154.9 billion in the same period of the previous year, with exports rising by 8.2 percent and imports increasing 9.1 percent.

Year-on-year, exports increased by 4 percent to HKD 303.1 billion in May 2017, after an increase of 7.1 percent in the previous month. Exports to Asia as a whole went up by 5.5 percent, mainly to India (29.2 percent); Taiwan (16.7 percent); Vietnam (16.4 percent); Japan (6.3 percent) and China (3.8 percent). Apart from destinations in Asia, exports went up mostly to Germany (2.1 percent) and the US (1 percent).

By commodity, exports increased for: electrical machinery, apparatus and appliances, and electrical parts thereof (7.7 percent); office machines and automatic data processing machines (6.8 percent), and non-ferrous metals (80.4 percent). 

Imports went up by 6.6 percent to HKD 338.8 billion, after 7.3 percent rise in the preceding month. Increases were recorded from South Korea (13.1 percent); India (56.6 percent); the Philippines (26.2 percent); Singapore (8.6 percent); China (2.8 percent); Malaysia (21.2 percent) and Thailand (10.8 percent). 

By commodity, imports surged for: electrical machinery apparatus and appliances, and electrical parts thereof (10.2 percent); miscellaneous manufactured articles (mainly jewellery, goldsmiths' and silversmiths' wares) (26.8 percent); and office machines and automatic data processing machines (8.3 percent).

A Government spokesman noted that merchandise exports grew moderately in May. Exports to major Asian markets continued to provide the main impetus to overall growth, reflecting the sustained expansion of regional trading and production activities. The spokesman commented further that looking ahead, the improving global economic situation should continue to be conducive to Asia's as well as Hong Kong's export performance. Yet, the external trading landscape is still overcast by uncertainties arising from the pace of US monetary policy normalisation, Brexit as well as other policy and political developments in the US and Europe. Also, the risks of rising protectionist sentiment and geopolitical tensions in various regions persist.

Saturday June 24 2017
Week Ahead
Joana Taborda |

In the US, investors will be closely watching final release of GDP growth, personal income and spending and CB consumer confidence. In Europe, the most important data includes: business confidence and inflation for Germany, Italy and the Euro Area and the final GDP growth rate for the UK. Also, Japan will release inflation and unemployment figures and China official manufacturing and non-manufacturing PMIs.

It will be a busy week in the US. The most important releases include: final GDP growth for Q1, personal income and spending and CB consumer confidence. Also investors will be following: Chicago PMI, durable goods orders, Case-Shiller house price index, pending home sales, final estimate for corporate profits and final reading for Michigan consumer sentiment.

Elsewhere in America: Canada will release PPI and GDP growth for April, Brazil unemployment rate, current account, FDI and consumer confidence; Mexico foreign trade and unemployment rate; and in Colombia the central bank is expected to give us an update on the course of monetary policy. 

In the United Kingdom, the final reading of GDP growth for Q1 will be in the spotlight. Other important indicators include: mortgage approvals and lending, consumer credit, the GfK consumer confidence and the Bank of England financial stability report.

In Germany, investors will closly watch: retail sales, unemployment rate, inflation rate , IFO Business Climate and GFK consumer confidence. Also, June inflation data will be released for Italy, Spain, France and Euro Area

In Asia, Japan will dominate the calendar with inflation rate, unemployment rate, retail sales, industrial production, housing starts, construction orders and household spending. Also, China will release official manufacturing and non-manufacturing PMIs. 

Friday June 23 2017
US New Home Sales Beat Forecasts
US Census Bureau | Joana Taborda |

Sales of new single-family houses in the United States increased 2.9 percent to a seasonally adjusted annual rate of 610 thousand in May of 2017 from an upwardly revised 593 thousand in April. The figure came above market expectations of 597 thousand, as sales rose in the South and the West.

Sales rose the most in the West (13.3 percent to 162 thousand), followed by the South (6.2 percent to 360 thousand) while declines were seen in the Northeast (-10.8 percent to 33 thousand) and the Midwest (-25.7 percent to 55 thousand).

The median sales price of new houses sold was $345,800 higher than $310,200 in the previous month. The average sales price was $406,400, well above $367,700 in April.

The stock of new houses for sale went up to 268 thousand from 264 thousand in both April and March. This represents a supply of 5.3 months at the current sales rate.

Year-on-year, new home sales jumped 8.9 percent.

Figures for April were revised sharply higher to 593 thousand from an initial estimate of 569 thousand. The March figure was also revised up by 2 thousand to 644 thousand, remaining the highest since October of 2007.

Friday June 23 2017
US Factory Growth At 9-Month Low: PMI
Markit | Joana Taborda |

The IHS Markit US Manufacturing PMI fell to 52.1 in June of 2017 from 52.7 in May and well below market expectations of 53, flash estimates showed. It is the lowest reading since September of 2016 as output and new business growth slowed, offsetting stronger contributions from job creation and inventory building.

Meanwhile, latest survey data revealed a marked slowdown in input price inflation to its weakest since March 2016. Lower cost pressures led to a moderation in factory gate price inflation in June. The latest rise in manufacturers’ output charges was the least marked since September 2016.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: 
“The economy ended the second quarter on a softer note. The June PMI surveys showed some pay-back after a strong May, indicating the second weakest expansion of business activity since last September.

“The average expansion seen in the second quarter is down on that seen in the first three months of the year, indicating a slowing in the underlying pace of economic growth. While official GDP data are expected to turn higher in the second quarter after an especially weak start to the year (our recent GDP tracker based on various official and survey data points to 3.0% growth), the relatively subdued PMI readings suggest there are some downside risks to the extent to which GDP will rebound. 

“Historical comparisons of the PMI against GDP indicates that the PMI is running at a level broadly consistent with the economy growing at a 0.4% quarterly rate (1.5% annualized) in the second quarter, or just over 2% once allowance is made for residual seasonality in the official GDP data.

“There are signs, however, that growth could pick up again: new orders showed the largest monthly rise since January, business optimism about the year ahead perked up and hiring remained encouragingly resilient. The survey is indicative of non-farm payroll growth of approximately 170,000.

“Average prices charged for goods and services meanwhile showed one of the largest rises in the past two years, pointing to improved pricing power amid healthy demand.” 

Friday June 23 2017
Canada Inflation Rate At 6-Month Low Of 1.3%
Statistics Canada | Joana Taborda |

Consumer prices in Canada increased 1.3 percent year-on-year in May of 2017, easing from a 1.6 percent rise in each of the previous two months and below market expectations of 1.5 percent. It is the lowest inflation rate since November as gasoline prices increased only half of what they rose last month and cost of clothing and footwear fell.

Prices were up in six of the eight major components in the 12 months to May, with the shelter and transportation indexes contributing the most to the year-over-year rise in the CPI. The clothing and footwear index and the food index declined on a year-over-year basis.

Shelter costs grew 1.9 percent after increasing 2.2 percent  in April. This deceleration was led by the electricity index (-5.5 percent ), which declined year over year for a fifth consecutive month. The natural gas index rose less in May than in April. Conversely, homeowners' replacement costs were up more in May (+4.4 percent ) than in April (+3.9 percent ).

The transportation index rose 2.2 percent compared with 4.2 percent in April. Gasoline prices contributed the most to this deceleration, up 6.8 percent  after a 15.9 percent  gain in April. The purchase of passenger vehicles index edged up 0.2 percent, marking its smallest year-over-year increase since February 2015. At the same time, the price of air transportation rose more.

The recreation, education and reading index rose 2.5 percent following a 3.3 percent increase in April. The travel tours index was up 6.8 percent  after a 9.4 percent increase in April. Prices for video equipment fell more while the traveller accommodation index rose 6.3 percent  following a 5.7 percent increase in April.

In May, the food index was down 0.1 percent  on a year-over-year basis, following a 1.1 percent decline in April. Prices for food purchased from stores decreased 1.2 percent , with the meat and bakery products indexes contributing the most to the drop. The decline in fresh fruit prices (-1.0 percent ) slowed in May, following a 6.2 percent  decrease in April. Prices for fresh vegetables rose year over year for the first time since August 2016. Meanwhile, prices for food purchased from restaurants posted a 2.4 percent  increase.

On a monthly basis, consumer prices edged up 0.1 percent, below 0.4 percent in April. 

The core index rose also went up 0.1 percent on the month and rose 0.9 percent on the year, below 1.1 percent in April. It is the lowest annual core inflation since February of 2011.

Friday June 23 2017
Dutch Q1 GDP Growth Confirmed At 0.4%
Statistics Netherlands | Joana Ferreira |

The Dutch economy advanced 0.4 percent on quarter in the first three months of 2017, following a 0.6 percent expansion in the previous period and matching the preliminary estimate. It was the weakest growth rate since the last quarter of 2015 as household consumption rose at a slower pace and government spending contracted while fixed investment rebounded sharply.

The economy posted its twelfth consecutive quarter of growth, despite being the weakest in over a year. Household consumption rose at a slower pace (0.1 percent from 0.5 percent in Q4 2016) while fixed investment rebounded (4.6 percent from -1.7 percent in Q4). Also, changes in inventories added 0.2 percentage points to growth (0.3 p.p. in Q4). By contrast, government spending contracted 0.3 percent, after increasing by 0.4 percent in Q4, and net external demand contributed negatively, as imports jumped 2 percent (0.6 percent in Q4) while exports went up at a slower 1.4 percent (1.1 percent in Q4).

Year-on-year, the gross domestic product grew 3.2 percent, slower than a flash estimate of 3.4 percent and following a downwardly revised 2.4 percent expansion in the previous period. It was the highest annual growth rate since the first quarter of 2008, mainly boosted by a 8.3 percent jump in business investment (-1.5 percent in Q4), namely in software, machinery and telecommunication equipment. Meanwhile, private consumption rose at a slower 1.7 percent (2.3 percent in Q4) and government spending went up 1.1 percent (1.6 percent in Q4). Also, net external demand contributed positively, as exports rose 5.5 percent (2.6 percent in Q4) while imports increased at a slower 5.3 percent (0.9 percent in Q4). By contrast, government investment shrank 1.9 percent (1.2 percent in Q4).

Friday June 23 2017
French Q1 GDP Growth Revised Up To 0.5%
Insee l Rida Husna |

France GDP advanced 0.5 percent quarter-on-quarter in the March quarter of 2017, the same pace as in the prior quarter but slightly stronger than a 0.4 percent growth in the second estimates, final figures showed. It was the third straight quarter of expansion, mainly supported by fixed investment and government spending while household consumption stalled.

In the three months to March 2017, household consumption was flat, following a 0.6 percent rise in the previous quarter. Government expenditure went up 0.3 percent, unchanged from the prior quarter. Total gross fixed capital formation grew by 1.2 percent, compared to a 0.7 percent growth in the fourth quarter. Final domestic demand (excluding changes in inventories) contributed 0.4 points to GDP growth, down from 0.6 points in the prior quarter.

Exports declined by 0.7 percent, following a 1.1 percent rise in the December quarter. Imports went up at a faster 1.2 percent (from 0.6 percent increase in the preceding quarter). The foreign trade balance contributed negatively to the economy (-0.6 points after 0.1 points in the fourth quarter). In contrast, changes in inventories contributed positivevely: 0.7 points after -0.2 points in the December quarter.

Year-on-year, the GDP grew by 1.1 percent, compared to a 1.2 percet expansion in the fourth quarter but slightly above an earlier estimate of 1 percent growth.

Friday June 23 2017
Singapore Inflation Rate At Near 3-Year High Of 1.6%
Statistics Singapore l Rida Husna |

Consumer prices in Singapore rose 1.4 percent year-on-year in May of 2017, compared to a 0.4 percent rise in the prior month and in line with market consensus. It was the highest inflation rate since June 2014, driven by a surge in cost of housing and a faster increase in prices of food.

Year-on-year, upward prices pressure came from: clothing & footwear (1.9 percent from 0.5 percent in April), household durables & services (0.7 percent from 0.8 percent, largely due to a  1.8 percent increase in household services & supplies); health care (2.4 percent from 3.0 percent, mainly driven by a 3.4 percent rise in medical & dental treatment); transport (3.8 percent from 4.7 percent, mainly due to a 6.1 percent rise in private road transport); communication (1.0 percent from 0.8 percent) and education (3.2 percent from 3.2 percent, due to a 3.2 percent rise in tuition & other fees and a 0.1 percent increase in school textbooks & related study guides). Also, cost of housing & utilities went up 0.1 percent, rebounding from a 4.6 percent drop in the prior month. In contrast, cost fell for: recreation & culture (-0.2 percent from 0.3 percent, largely due to a 0.3 percent drop in recreation & entertainment and a -0.1 percent decline in holiday expenses) and miscellaneous goods & services (-0.1 percent from 0.1 percent, driven by a 1.8 percent fall in personal care).

Prices of food rose 1.5 percent, faster than a 1.3 percent rise in  the previous three months. Among food excluding food servicing services, cost increased for bread & cereals (1.1 percent); meat (0.5 percent), fish & seafood (2.9 percent); milk, cheese & eggs (0.7 percent); fruits (3.5 percent), vegetables (0.5 percent); sugar, preserves & confectionery (4.0 percent) and other food (1.2 percent). In contrast, cos declined for: oils & fats (-1.9 percent) andnon-alcoholic beverages (-0.3 percent). Among food servicing services, prices increased for all categories: restaurant foods (1.3 percent), fast food (0.5 percent), hawker food including food courts (1.7 percent) and catered food (1.7 percent).

Core consumer prices which exclude costs of accommodation and private road transport, went up 1.6 percent, following a 1.7 percent gain in the prior month and matching expectations.

On a month-on-month basis, consumer prices rose 0.3 percent, after falling 0.3 percent in April.

Thursday June 22 2017
US Jobless Claims Rise More Than Expected
DOL | Joana Ferreira |

The number of Americans filing for unemployment benefits increased by 3 thousand to 241 thousand in the week ended June 17th from the previous week's revised level of 238 thousand and above market expectations of 240 thousand.

Claims have now been below 300,000 for 120 straight weeks, the longest such stretch since 1970.

The 4-week moving average, which removes week-to-week volatility, rose 1,500 to 244,750 last week, the highest since early April. The previous week's average was revised up by 250 from 243,000 to 243,250.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending June 10, unchanged from the previous week's unrevised rate. 

The continuing claims drawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending June 10 was 1,944,000, an increase of 8,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 1,935,000 to 1,936,000. The 4-week moving average was 1,932,000, an increase of 5,000 from the previous week's revised average. The previous week's average was revised up by 250 from 1,926,750 to 1,927,000. 

Thursday June 22 2017
Philippines Holds Key Rate At 3%
Bangko Sentral NG Pilipinas | Yekaterina Guchshina |

The central bank of Philippines left its key overnight borrowing rate steady at 3 percent on June 22nd, 2017 as widely expected, saying that the inflation environment continues to be manageable. Policymakers kept its inflation forecasts for 2017-2019 unchanged at 3.0 percent ± 1 percentage point but said upside risks persist.

Statement by the Bangko Sentral NG Pilipinas:

The corresponding interest rates on the overnight lending and deposit facilities were also kept steady. The reserve requirement ratios were likewise left unchanged.

The Monetary Board’s decision is based on its assessment that the inflation environment continues to be manageable. Latest baseline forecasts indicate a lower path of future inflation, with average inflation remaining within the target range of 3.0 percent ± 1 percentage point for 2017-2019. Inflation expectations also continue to be firmly anchored to the target over the policy horizon.

At the same time, the assessment of risks to the inflation outlook remains tilted toward the upside. While there may be potential transitory impact of the proposed tax reform program, the social safety nets are expected to mitigate the resulting inflationary pressures. The long-run effects on productivity will improve overall supply and further dampen inflation. Meanwhile, prospects for the global economy have improved, but risks to external demand remain tilted to the downside. Nonetheless, the Monetary Board emphasized that while global economic conditions remain challenging, prospects for domestic economic activity continue to be firm owing to buoyant consumer and business sentiment, ample liquidity, and sustained credit growth. In addition, the Monetary Board has considered the potential impact on global financial market conditions of the ongoing monetary policy adjustment in the US, noting that maintaining monetary policy settings at this time would allow the BSP to continue to assess evolving economic developments and calibrate its policy tools as appropriate.

With these considerations, the Monetary Board believes that prevailing monetary policy settings remain appropriate. Going forward, the BSP will remain vigilant against any risks to the inflation outlook and will adjust its policy settings as needed to ensure that future inflation remains consistent with the medium-term target while being supportive of sustainable economic growth.

Thursday June 22 2017
Swiss Trade Surplus Widens To 4-Month High In May
Swiss Customs Administration l Chusnul Ch Manan |

Swiss trade surplus widened to CHF 3.40 billion in May 2017 from CHF 3.34 billion a year earlier and above market expectations of CHF 2.44 billion. It was the largest trade surplus since January, as exports went up by 13.5 percent to CHF 19.56 billion while imports increased by 16.3 percent to CHF 16.16 billion.

Year-on-year, exports rose by 13.5 percent to CHF 19.56 billion, mainly driven by an increase in sales of chemical and pharmaceutical products (16.4 percent), machinery and electronics (7 percent), watches (9 percent), precision instruments (10.9 percent), and metals (20.5 percent).
Among major trade partners, sales went up to: EU countries (16.5 percent), mainly Germany (23.7 percent), Italy (17.1 percent) and France (2.1 percent); China (41.8 percent); Japan (39.3 percent); and the US (3.2 percent).

Imports went up 16.3 percent to CHF 16.16 billion, boosted by an increase in purchases of chemical and pharmaceutical products (35.2 percent), machinery and electronics (12.1 percent), vehicles (5 percent), metals (19 percent), food, beverages and tobacco (6.2 percent), and textiles, clothing, footwear (23 percent).

Among major trade partners, purchases went up from: EU countries (21.6 percent), mainly Germany (25.5 percent) and France (22.3 percent); and China (10.2 percent). Imports from the US dropped 22.6 percent.

In the January-May period, the trade surplus widened to CHF 16.17 billion from CHF 15.11 billion in the same period of 2016.

Thursday June 22 2017
New Zealand Keeps Interest Rate Steady At 1.75%
Mario |

The Reserve Bank of New Zealand kept its official cash rate unchanged at record low of 1.75 percent on June 21st, 2017, as widely expected. The central bank left the monetary rate unchanged for the fourth straight meeting. Policymakers underscored that major challenges remain with persistent surplus capacity and extensive political uncertainty. They also mentioned soft GDP growth in the last quarter of 2017 and that house price inflation has moderated further. The central bank also stated that monetary policy will remain accommodative for a considerable period, as numerous uncertainties remain and policy may need to adjust accordingly.

Statement by Reserve Bank Governor Graeme Wheeler:

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent.

Global economic growth has increased and become more broad-based.  However, major challenges remain with on-going surplus capacity and extensive political uncertainty.

Headline inflation has increased over the past year in several countries, but moderated recently with the fall in energy prices.  Core inflation and long-term bond yields remain low.  Monetary policy is expected to remain stimulatory in the advanced economies, but less so going forward.

The trade-weighted exchange rate has increased by around 3 percent since May, partly in response to higher export prices.  A lower New Zealand dollar would help rebalance the growth outlook towards the tradables sector.

GDP growth in the March quarter was lower than expected, with weaker export volumes and residential construction partially offset by stronger consumption.  Nevertheless, the growth outlook remains positive, supported by accommodative monetary policy, strong population growth, and high terms of trade.  Recent changes announced in Budget 2017 should support the outlook for growth.

House price inflation has moderated further, especially in Auckland.  The slowdown in house price inflation partly reflects loan-to-value ratio restrictions, and tighter lending conditions. This moderation is projected to continue, although there is a risk of resurgence given the on-going imbalance between supply and demand.

The increase in headline inflation in the March quarter was mainly due to higher tradables inflation, particularly petrol and food prices.  These effects are temporary and may lead to some variability in headline inflation.  Non-tradables and wage inflation remain moderate but are expected to increase gradually.  This will bring future headline inflation to the midpoint of the target band over the medium term. Longer-term inflation expectations remain well-anchored at around 2 percent.

Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly.