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Christophe Barraud🛢
@C_Barraud
, 634 tweets, 396 min read Read on Twitter
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
*NBS spokesman Mao Shengyong said that the international situation was bringing “downward pressure” on China.
*Link: bloom.bg/2RVX1ZA
🇫🇷 🇪🇺 🇨🇳 French tire maker Michelin warned of declining sales in Europe and #China in the second half of the year, dragging down shares of its competitors in the U.S. and Europe - Bloomberg
*Statement: bit.ly/2EujhqH
🇺🇸🇨🇳🇪🇺 In a volley of filings, the EU, #China and the U.S. this week escalated disputes over new U.S. metals tariffs, the European response to those levies, and Chinese intellectual property practices - Bloomberg
bloomberg.com/news/articles/…
🇯🇵 #Tradewar saps confidence of #Japan's business leaders - Nikkei
asia.nikkei.com/Economy/Trade-…
Most of economists still remain too much optimistic:

*The outlook for global growth in 2019 has dimmed for the 1st time, according to Reuters polls of economists who said the U.S.-#China #tradewar and tightening fin. conditions would trigger the next ⬇
reuters.com/article/us-glo…
🇩🇪 #Germany | The Bundesbank said Monday that growth “may have come to a temporary halt,” which would be the first quarter without expansion in more than three years.
*Link: bundesbank.de/en/tasks/topic…
🇨🇳 *RENAULT 3Q REV. EU11.5B, EST. EU12.2B; CUTS #CHINA MKT FORECAST - BBG
*Link: bit.ly/2JhqMQV
🇨🇳 *RENAULT CFO: #TRADEWAR `IS PUTTING SOME TENSION' ON #CHINA - BBG
🇨🇳 Over the last few days, #China announced a lot of measures to support domestic activity which suggests that latest 🇺🇸 tariffs ($200b on Sept. 24) had significant impact.

See tweetstorm:
🇨🇳 This week's earnings shine spotlight on #China growth risk - Reuters
reuters.com/article/us-usa…
🇰🇷 #SouthKorea's #KOSPI index, a proxy for world trade growth, closed at the lowest level since March 2017.
🇬🇧 #UK OCT CBI INDUSTRIAL TRENDS TOTAL ORDERS: -6 V +2E
#Manufacturing new orders ⬇ at the fastest pace in three years in the quarter to October, reflecting ⬇ in both domestic and export orders.
cbi.org.uk/news/manufactu…
🇺🇸 🇨🇳 U.S. Manufacturers See Signs of New Risks - WSJ
*Caterpillar’s tariff costs and 3M’s slower growth in #China threaten their outlooks
*Link: on.wsj.com/2D2hzLI
🇺🇸 🇨🇳 Prospects for #Trump-Xi Deal Fade Even With #G20 Meeting Confirmed - Bloomberg
*Best hope, analysts say, is for pause on next wave of #tariffs
*Link: bloom.bg/2OJevud
🇺🇸 🇨🇳 Rising costs at US manufacturers unnerve investors - FT
ft.com/content/001c05…
🇨🇳 #China’s industrial sector faces downward pressure, but still operating at a reasonable level - People’s Daily
*Link (Chinese): bit.ly/2D4JhYc
🇨🇳 #China deputy head of the Ministry of Industry and Information Technology Xin Guobin told reporters that the period of fast auto sales and production expansion may be over, and slow growth is likely to be the new normal - Xinhua
xinhuanet.com/english/2018-1…
🇩🇪 #GERMANY OCT PRELIMINARY #MANUFACTURING PMI: 52.3 V 53.4E (29-month low)
*Services PMI: 53.6 v 55.5e 63rd (5-month low)
*Composite PMI: 52.7 v 54.8e (41-month low)
*Link: bit.ly/2Pf6JrH
🇩🇪 🇪🇺 Following Bundesbank warning on Monday, German figures suggest that economic momentum kept slowing in 4Q. It reinforces my view that the consensus is still too optimistic about:
*Eurozone 2018 and 2019 GDP
*Global trade growth in 2018 and 2019
🇪🇺 EUROZONE OCT PRELIMINARY #MANUFACTURING PMI: 52.1 V 53.0E (26-month low)
*New export orders for goods decreased for the first time since June 2013 ❗
*Services PMI: 53.3 v 54.5e (24-month low)
*Composite PMI: 52.7 v 53.9e (25-month low)
*Link: bit.ly/2Apmzrm
🇺🇸 AMD Follows TI With Dour Sales Forecast, Adding to Chip Woes - Bloomberg
*Revenue from graphic chips disappoints as resellers cut orders
*Link: bloom.bg/2AqIVZo
🇺🇸 Texas Instruments Inc., whose chips are in most electronic devices, gave investors the first solid piece of evidence that a multiyear technology spending binge may be ending - Bloomberg
*Link: bloom.bg/2O2WamV
🇺🇸 🇨🇳 #Tradewar | "Tariff (s)" were mentioned 51 times throughout the #Fed Beige in October (up from 41 in September).
wsj.com/articles/fed-r…
🇰🇷 #SouthKorea's GDP Misses Forecasts, Raising Hurdle to Rate Hike - Bloomberg
bloomberg.com/news/articles/…
🇪🇺 #ECB'S DRAGHI SAYS INCOMING DATA HAS BEEN WEAKER THAN EXPECTED - BBG
🇪🇺 #ECB Says Forecasters Lower Growth Outlook for 2018 and 2019
*Link: bit.ly/2q9L3yV
My proxies confirm that global trade growth will keep slowing in the coming months with RWI/ISL container index rising 1.5% YoY in Sept. (slowest pace since July 2016)
*It reinforces my view that the consensus is still too much optimistic for 2018 and 2019.
Other cyclical indicators also point to a slowdown (and even a contraction).
🇰🇷 Financial indicators are not in better shape with #SouthKorea's #KOSPI index, a proxy for world trade growth, closing at the lowest level since Jan. 2017.
🇺🇸 On Wednesday, the Standard and Poor's 500 Containers & Packaging Index reached its lowest level since July 2016.
🇺🇸 🇨🇳 Many U.S. firms in #China eyeing relocation as #tradewar bites: survey - Reuters
reuters.com/article/us-usa…
🇨🇳 Economists Cut #China GDP Estimates as #TradeWar Trumps Stimulus - Bloomberg
bloomberg.com/news/articles/…
🇪🇺 In line with French figures, Italian GDP came below expectations, confirming my view that the consensus and the ECB remain too optimistic about 2018 and 2019 GDP (see previous tweets).

🇮🇹 #ITALY Q3 PRELIMINARY GDP Q/Q: 0.0% V 0.2%E; Y/Y: 0.8% V 1.0%E
🇪🇺 EUROZONE Q3 ADVANCE GDP Q/Q: 0.2% V 0.4%E; Y/Y: 1.7% V 1.8%E

*As expected, most of economists should revise ⬇ their forecasts for 2018 and 2019 GDP in the coming days/weeks.
*ECB will do the same in Dec.
🇨🇳 #CHINA OCT OFFICIAL #MANUFACTURING PMI: 50.2 V 50.6E (lowest since July 2016)
*Non-Manufacturing PMI: 53.9 v 54.6e (lowest since August 2017)
*Composite PMI: 53.1 v 54.1 prior (lowest since February 2018)
*NBS: PMIs affected by long holiday and external environment
🇨🇳 #China | In October, the new export orders sub-index of the #manufacturing PMI ⬇ further in the contractionary zone. The gauge dropped 1.1pt to 46.9 (lowest since Jan. 2016), following a 1.4pt drop in September.
*Link: bloom.bg/2CTm62t
🇨🇳 #China | Import Expo to be held in Shanghai (from Nov. 5) has likely constrained production in the #manufacturing Yangtze River Delta area.
*The #Shanghai government ordered construction sites in the city to shut down between Oct. 23 and Nov. 12 (bit.ly/2SALteu).
🇯🇵 #JAPAN SEPT PRELIM INDUSTRIAL PRODUCTION M/M: -1.1% V -0.3%E; Y/Y: -2.9% (largest ⬇ since Jul. 2016) V -2.1%E
*Production was impacted by typhoons, earthquakes and the US/China #tradewar
*As already discussed (bit.ly/2P4ImxG), 3Q GDP is likely to surprise ⬇.
🇰🇷 #SOUTHKOREA SEPT INDUSTRIAL PRODUCTION M/M: -2.5% V -0.5%E; Y/Y: -8.4% (largest decline since March 2009) V -5.1%E
🇩🇪 #GERMANY ENERGY CONSUMPTION TO FALL 'SIGNIFICANTLY' IN 2018: AGEB - BBG
*AGEB SEES GERMAN 2018 ENERGY CONSUMPTION DOWN 5% AT 12,900 PJ
🇰🇷 Samsung Cuts Back Capital Spending as Earnings Top Estimates - Bloomberg
*Capex to drop to 31.8 trillion won in 2018, down 27%
bloomberg.com/news/articles/…
🇩🇪 🇨🇳 #German firms should cut their dependence on the #China market, a leading industry group says in a strategy paper that underscores rising concern over #Beijing's state-driven economic model, according to a draft seen by Reuters.
reuters.com/article/us-ger…
🇩🇪 🇨🇳 The 25-page #China position paper from the Federation of German Industries, due to be published in Jan., argues that a long-promised opening of the Chinese market is unlikely to take place and voices concern about ⬆ Communist party control over society and the economy ❗
🇨🇳 #China | Non-state firms will have to repay 245.1 billion yuan ($35.2 billion) of bonds in the three months to March, with developers and industrial firms shouldering the bulk of the repayment obligations, data compiled by Bloomberg show.
🇨🇳 Surging default rates for #China local bonds from the private sector are now far higher than those of state-backed companies. The failure rate for non-state companies has jumped to 3.9% this year, from 0.7% in 2017, according to Bloomberg (citing Goldman Sachs data).
🇹🇼 🇲🇾🇹🇭 #Manufacturing gauges for some of #Asia’s most export-driven economies slipped into ⬇ territory in Oct.

#Taiwan PMI: 48.7 from 50.8 (lowest since May 2016)
#Malaysia PMI: 49.2 from 51.5 (lowest since May 2018)
#Thailand PMI: 48.9 from 50.0 (lowest since Nov. 2016)
🇨🇳 #China | OCT CAIXIN PMI #MANUFACTURING: 50.1 V 50.0E;
*Business outlook for output hit 11-month low
*The new export orders component surprisingly rose (48.8 vs 47.6 prior) but stayed below the 50 threshold for a seventh consecutive month.
*Link: bit.ly/2SyEZgx
🇸🇪 🇪🇺 Meanwhile, the trend is unlikely to improve in #Eurozone
*HT @MikaelSarwe

Apple Silence on iPhone Unit Sales Sparks Concern, Shows Future - Bloomberg
Analysts say company doesn’t want to disclose falling numbers
*Link: bloom.bg/2DkRB6g
J.P.Morgan Global Manufacturing PMI fell to 52.1 from 52.2 in Sept. (lowest since Nov. 2016)
*New orders: 51.9 vs 52.0 in Sept. (lowest since Sept. 2016.
*Link: bit.ly/2zlCu8f
J.P.Morgan Global Manufacturing PMI: New Exports Orders rebounded to 49.9 vs 49.7 in Sept. but remained in contraction territory.
*It reinforces our view that the consensus is too optimistic about global trade growth (2018 and 2019).
J.P.Morgan Global Manufacturing PMI: Output fell to 51.9 vs 52.4 in Sept. (lowest since June 2016)
*It suggests that global industrial production will keep slowing in 4Q.
🇮🇳 Apple's #iPhone sales are set to dip by around a quarter in #India's holiday season fourth quarter, putting them on course for the first full-year fall in four years, industry research firm Counterpoint said on Saturday - The Economic Times
economictimes.indiatimes.com/tech/hardware/…
World Economy Risks Returning to Sync, This Time to the Downside - Bloomberg
*Lengthening worry list stretches from trade to rising rates
*Link: bloom.bg/2QicL7U
🇯🇵 Subaru expects 30% profit fall after engine recall - Nikkei
*Domestic sales for the first half fell 20% on the year to 67,000 vehicles, according to preliminary figures.
*Worldwide production for the first half decreased 6% to 490,000 vehicles.
asia.nikkei.com/Business/Compa…
🇯🇵 🇨🇳 #Tradewar squeezes corporate earnings in #Japan and #China - Nikkei
*"Shipment to China has slowed. Recent orders are down about 30% from a year earlier" Yoshimaro Hanaki, president of Japanese machine tool builder Okuma has said.
asia.nikkei.com/Economy/Trade-…
🇨🇳 The combined net profit of roughly 3500 listed #China Cos rose just 7% on the year in the July-Sept. quarter, compared with 23% growth in the prior quarter - Nikkei (citing results announced in Oct. by Cos listed on the #Shanghai and #Shenzhen exchanges, excluding financials)
🇨🇳 Default Risks Rise in $355 Billion #China Builder Bond Market - Bloomberg
*At least 4 property-related firms defaulted on bonds in 2018
*S&P expects defaults to rise, asks investors to be cautious
*Link: bloom.bg/2DlU5Bs
🇨🇳 New onshore Co bond defaults reached 72.6b yuan ($10.5b) this year, including 23 private and 50 public offerings - Bloomberg
*#China offshore corporate-bond defaults amounted to $2.53b this year, including 9 dollar-denominated bonds and one HK dollar-based note.
#APPLE CANCELS PRODUCTION BOOST FOR BUDGET #IPHONE XR: NIKKEI
asia.nikkei.com/Business/Compa…
🇩🇪#Germany Oct Construction PMI: 49.8 v 50.2 prior (first decline since March 2017) - Markit
*Link: bit.ly/2zyzHst
➡ It can be partially explained by adverse weather conditions.
🇯🇵 #Japan core machine orders fall 18.3% in September, the largest month-on-month decline on record.
*Excluding disasters, a global and Chinese economic slowdown likely weighted ⬇.
Despite several proxies (bit.ly/2PdAXMi; bit.ly/2P4ImxG; bit.ly/2QqJxnt) suggest a sharp contraction, economists were once again surprised ⬇
*🇯🇵 2018 GDP forecasts remain optimistic

🇨🇳 S&P warns on default risk for weak #China developers – Nikkei
asia.nikkei.com/Business/Busin…
Qualcomm Gives Weak Forecast on Loss of #Apple #iPhone Orders - Bloomberg
*Said demand was lower in general but expects that to reverse in 2H19 as new, fifth-generation or 5G, phone services and networks are deployed.
*Link: bloom.bg/2OxsX3M
🇨🇳 #CHINA OCT. RETAIL PASSENGER VEHICLE SALES -13.2% ON YEAR: PCA - BBG
*CHINA OCT. RETAIL PASSENGER VEHICLE SALES 1.98M UNITS
🇪🇺 Eu Commission is likely to revise ⬇ its GDP forecasts this morning as the latest data confirmed the sharp slowdown in 3Q:

🇩🇪 Sept. Exports M/M: -0.8% v +0.4%e
🇫🇷 Sept. Exports: -1.8% v -0.2% prior
🇫🇷 #France | With an expected overall decrease of 1% in investment for 2018, business managers have lowered their July 2018 estimate by 5 points - INSEE
*Link: bit.ly/2RIgBHM
🇪🇺 European Commission cuts its 2019 GDP forecast to 1.9% from 2.0% but keeps unchanged its forecast for 2018 at 2.1%.
*It seems very optimistic. Sept. ECB forecast for 2018 was 2.0% but the central bank has already acknowledged that latest figures have been weaker than expected
🇬🇧 #BOE'S BROADBENT SEES SIGNS OF SOMEWHAT WEAKER GROWTH IN 4Q - BBG
*BROADBENT: BREXIT UNCERTAINTY HITS PRODUCTIVITY, INVESTMENT
*BROADBENT: UNCERTAINTIES ON THINGS IN FORECASTS ARE MATERIAL
🇪🇺 #ECB'S GUINDOS SEES DOWNSIDE RISKS TO EURO-AREA ECONOMY - BBG
🇪🇺 #ECB'S PRAET SAYS THERE'S BEEN SOME SLOWDOWN IN EURO ECONOMY - BBG
As flagged on @bfm_eco, #German GDP fell 0.2% QoQ in 3Q (confirming that the consensus forecast for 2018 remains optimistic).

🇩🇪 #GERMANY Q3 PRELIMINARY GDP Q/Q: -0.2% V -0.1%E; GDP Y/Y: 1.1% V 1.3%E

bfmbusiness.bfmtv.com/mediaplayer/vi…
#Japan | As mentioned several times (bit.ly/2B4a5Wy), the consensus forecast for 🇯🇵 2018 GDP (at 1.1%) is optimistic:

*Q3 PRELIM GDP ANNUALIZED Q/Q: -1.2% V -1.0%E
🇩🇪 #GERMANY INDUSTRY ASSOCIATION BDI CUTS EXPORT FORECAST TO 3 PCT VS 3.5 PCT - RTRS
🇪🇺 #ECB'S KNOT SAYS THERE ARE DOWNSIDE RISKS ON THE HORIZON - BBG
🇺🇸 Nvidia Corp., the biggest maker of chips for computer graphics cards, gave a weak sales forecast for the current quarter, showing the lingering loss of demand from the collapse of #cryptocurrency mining - Bloomberg
*Link: bloom.bg/2zbCLvk
Global production growth (ex construction) has weakened since Feb. It has suffered from a normalization in the semi-conductor sector after having benefited from sizeable demand tailwinds (Iphone, Bitcoin mining, etc.) and was ⬇ impacted by political uncertainties and tariffs.
Most of freight proxies (Baltic Dry Index, Harpex, etc.) suggest that global trade growth has slowed sharply since July 2018.
🇺🇸 🇨🇳 If the U.S. implements tariff hike on $200b Chinese goods to 25% from Jan. 1, 2019 (as suggested by Ross), global trade growth could take a significant hit at some point in Feb. (amplified by the shift in Chinese New Year dates).

🇺🇸 #Apple Suppliers Suffer as It Struggles to Forecast #iPhone Demand - WSJ
*In recent weeks, Apple slashed production orders for all three iPhone models that it unveiled in September.
wsj.com/articles/apple…
🇹🇼 #Taiwan Braces for Earnings Gloom as #IPhone, #TradeWar Bite - Bloomberg
*Apple suppliers including Hon Hai missed 3Q net income est.
*Link: bloom.bg/2A5Djmb
🇺🇸 🇨🇳 🇨🇦 🇪🇺 🇯🇵 🇬🇧 Growth in money supplies is continuing to drop around the world - Bloomberg
🇺🇸 #Apple Shares Near Bear Market Territory - Bloomberg
*Company has fewest positive analyst ratings among big #tech
*Link: bloom.bg/2OTUPiv
🇺🇸 #Apple said to cut orders from two #China component suppliers by 30% on lukewarm #iPhone XR demand - SCMP
scmp.com/tech/big-tech/…
🇬🇧 #BOE'S SAUNDERS: GROWTH IN 4Q, 1Q 2019 WILL LIKELY SLOW - BBG
🇬🇧 #BOE HALDANE: #BREXIT UNCERTAINTY COULD MAKE FOR A WEAKER 4Q - BBG
#OECD CUTS 2019 GLOBAL GROWTH FORECAST TO 3.5% VS 3.7% - BBG
*OECD LOWERS EURO-AREA GROWTH FORECASTS FOR 2018, 2019
*OECD SAYS ‘DOWNSIDE RISKS ABOUND’ FOR GLOBAL ECONOMY
#OECD Sees Trade Tensions as Risk for Korean Exports to #China.
This morning, trade data for the first 20 days of Nov. showed a 4.3% ⬇ in 🇰🇷 exports to 🇨🇳, the first fall outside holiday-affected months since late 2016.
*Link (Korean): bit.ly/2DRGuSR
🇰🇷 #SouthKorea | A slowdown in the expansion of chip exports to 3.5% compares with gains of at least 35% in each of the first nine months of 2018 also suggests a rapid softening of the global #tech sector, for which Korea is a key supplier.
bloomberg.com/news/articles/…
Several #OECD GDP forecasts seem to be the first one in line with reality with:
*Euro Area 2018 at +1.9% (vs 2.0% for ECB and 2.1% for EU Commission)
*Global GDP 2019 at 3.5% (vs 3.7% for the consensus)
*Link: bit.ly/2QbkeZM
However, risks associated to OECD forecast for Global GDP in 2019 (+3.5%) look skewed to the downside given their optimistic assumption concerning world real trade growth (+3.7% for 2019).
*NO EXPLICIT COMMITMENT TO FIGHT PROTECTIONISM IN #G20 DRAFT: FT
ft.com/content/a593d1…
#WTO says #G20 trade restrictions soar, cover $481 billion of #trade - Reuters
reuters.com/article/us-g20…
🇪🇺 🇩🇪 As expected (bit.ly/2DTybpG), Eurozone PMIs for Nov. are likely to keep declining.
*#Germany PMI Composite Output Index ⬇ to a 47-month low.
*Link: bit.ly/2TBrltt
🇩🇪 #Germany NOV PRELIMINARY #MANUFACTURING PMI: 51.6 V 52.2E (32-month low)
*Manufacturing order books fell for the second month running and to the greatest extent in four years.
*This largely reflected a solid and accelerated decline in goods exports orders.
🇪🇺 #EUROZONE NOV PRELIMINARY #MANUFACTURING PMI: 51.5 V 52.0E (30-month low)
*New Orders 48.9 v 49.8 prior (2nd straight contraction and lowest since Nov. 2014)
*Services PMI: 53.1 v 53.6e (25-month low)
*Composite PMI 52.4 v 53.0e (47-month low)
*Link: bit.ly/2Ks4f4h
🇪🇺 #EUROZONE NOV PRELIMINARY PMIs:
*The weaker rise in business activity was linked to a 2nd successive monthly ⬇ in new export orders across the manufacturing and service sectors.
*The drop in exports was the largest seen in the 4-year history of this new survey indicator ❗
🇪🇺 #Eurozone | It confirms my view that latest ECB (Sept.) and EC forecasts (Nov.) for 2018 and 2019 GDP remain optimistic.
*Despite a drop in EUR, exports remain under pressure due to global trade growth slowdown.

🇪🇺 The new ⬇ in export orders (bit.ly/2FE60MT) in Nov. raises concerns about a sharp slowdown in global trade growth in early 2019 (likely from Feb. due to shift in Chinese New Year dates).
I still think that the underlying trend in global trade growth is weaker than most economists assume. The headline reflects frontloading ahead of the implementation of tariffs. Still now, freight rates on shipping routes from #China’s ports to the U.S. are higher than elsewhere.
🇯🇵 #JAPAN NOV PRELIM #MANUFACTURING PMI: 51.8 V 52.9 PRIOR (lowest since Nov 2016)
*New orders contracted for the first time since Sept 2016 while new export orders showed expansion (though at a slower pace).
*Link: bit.ly/2DWu7ot
#Asia’s Liquidity Squeeze Is the Worst Since 2008 - Bloomberg
*Ex-Japan, central banks’ supply of currency plus bank reserves has ⬇ 7% in real terms since April.
*This is the steepest ⬇ in base money since the 11% ⬇ between Jan. and Oct. of 2008.
*Link: bloom.bg/2P55OGd
As I have repeated almost each week since July:

*DRAGHI: WORLD TRADE GROWTH MOMENTUM HAS SLOWED 'CONSIDERABLY' - BBG
#WTO REPORT: #TRADE GROWTH TO WEAKEN FURTHER IN Q4
*The most recent WTOI reading of 98.6 is the lowest since October 2016 and reflects declines in all component indices.
*Link: bit.ly/2TGANf0
Latest CPB data (Sept.) confirmed that global trade growth kept slowing in 3Q.
*Figures also suggest that the consensus is too much optimistic for 2018 and especially 2019.
*Link: bit.ly/2rJjz2d
🇺🇸 🇨🇳 In case they don't manage to find a framework/temporary deal (tariffs on hold), I will cut immediately my Global GDP forecast for next year (below my current estimate of 3.5%).
*It also means that the #Fed pause can take place sooner than I expect.

🇪🇺 Latest data related to consumer confidence were disappointing and suggests that Eurozone GDP is likely to remain muted in 4Q

🇩🇪 Dec. (18-month low)
🇮🇹 Nov. (6-month low)
🇫🇷 Nov. (45-month low)

➡ #ECB will revise downward (again) its GDP forecasts (2018/2019) at next meeting
Global Economy May Be Slowing More Than Expected, Lagarde Says - Bloomberg
*In a report ahead of the #G20, the IMF noted that recent data suggest greater slowdown than thought last month.
*Link: bloom.bg/2rbzbgo
#Asia's Growth Is Shifting Down a Gear - Bloomberg
*Growth in #China, #Japan, Southeast #Asia was weaker last quarter
*Link: bloom.bg/2SoKopB
🇨🇳 #CHINA NOV #MANUFACTURING PMI: 50.0 V 50.2E (lowest since July 2016); NON-MANUFACTURING: 53.4 V 53.8E (lowest since Aug. 2017)
*Link: bloom.bg/2Q2dVsr
🇨🇳 #CHINA NOV #MANUFACTURING PMI (1):
*The weakness was largely driven by domestic factors, reflected by ⬇ in the sub-components for imports (-0.5 to 47.1), new orders (-0.4 to 50.4) and output (-0.1 to 51.9).
🇨🇳 #CHINA NOV #MANUFACTURING PMI (2): Sharp ⬇ in prices were reported.
*Significant ⬇ in commodity prices weighted on input price index (-7.7 to 50.3) while output price index also fell (-5.6 to 46.4).
*The drop in input price index suggests that PPI YoY will slow.
🇨🇳 #CHINA NOV #MANUFACTURING PMI (3): Other figures suggest that trade growth will remain under pressure.
*Indexes for imports (-0.5 to 47.1) and new export orders (+0.3 to 47.0) remained in contraction territory.
#IMF LAGARDE TOLD LEADERS THAT GLOBAL GROWTH MODERATING, MORE UNEVEN - BBG
*LAGARDE: TRADE TENSIONS HAVING NEGATIVE IMPACT
*Link: bit.ly/2PdZw79
🇨🇳 #CHINA NOV CAIXIN PMI #MANUFACTURING: 50.2 V 50.1E
*New export orders 47.7 v 48.8 prior ❗
➡ Contrary to the official PMI, the survey highlights more external weakness.
*Link: bit.ly/2BNmTRe
🇰🇷 🇹🇼🇨🇳 🇺🇸 #SouthKorea and #Taiwan took a dive in November as slowing #smartphone demand and U.S.-#China #trade tensions hit home.
*#Manufacturing PMIs:
- SK: 48.6 (4-month low) v 51.0 prior
- TW: 48.4 (lowest since October 2015) v 48.7 prior
🇺🇸 🇨🇳 The readings show how the U.S./#China #tradewar is reverberating through the region’s integrated #technology supply chain, pressuring #manufacturing hubs.

Global #Manufacturing PMI: New Exports Orders fell slightly in Nov. (-0.1pt to 49.8) and remained in contraction territory for the 3rd straight month.
*Even if global trade growth YoY should rebound in Oct., then a normalization ⬇ is very likely.
*Link: bit.ly/2AYe4CT
🇨🇳 #China’s Nov. trade data were weak with exports ⬆ 5.4% YoY (8-month low; vs +15.6% prior) and imports ⬆ 3.0% YoY (47-month low; vs +21.4% prior)
*Slowdown was partly due to unfavorable base effects, ⬇ oil prices
*Shipments to most regions slowed reflecting ⬇ global demand
🇨🇳 Exports to the 🇺🇸 suggest fading frontloading with products hit by tariffs confirming slowdown.
*However that outperformed exports to other areas with shipments to the EU, Asean, Japan all slowing markedly.
*Weakness in imports also reflects sluggish domestic activity
🇫🇷 Bank of #France cuts Q4 GDP forecast from 0.4% to 0.2%
*Link: bit.ly/2zTNGKt

*It reinforces my view that Eurozone 2018 GDP will be lower than the consensus expects.
*The #ECB will revise ⬇ its 2018 forecast next week.
🇨🇳 #China Nov. Mobile Phone Shipments Drop 18% YoY - Academy of Information and Communications Technology
*Mobile phone shipments fell 8% MoM to 35.4m units in Nov.
*4G phone shipments down 17% YoY to 33.6m units
*39 new phone models were introduced in Nov., down 49% on year
🇨🇳 #CHINA NOV. RETAIL PASSENGER VEHICLE SALES -18% ON YEAR: PCA - BBG
*CHINA NOV. RETAIL PASSENGER VEHICLE SALES 2.05M UNITS
🇯🇵 #Japan Economy Shrinks Worse-Than-Forecast 2.5% on Capex Fall - Bloomberg
*Business investment slumps by the most in nine years
*Link: bloom.bg/2G5Vhej

➡ Figures reinforce my view that Japanese 2018 GDP will be lower than the consensus expects (+1.0%e).
#OECD Oct Leading Indicator: 99.4 v 99.5 prior
*Easing growth momentum remains the assessment for the #UK, #Canada and the #Eurozone as a whole, including #Germany, #France and #Italy, with similar signs now also emerging in the U.S.
*Link: bit.ly/2E9o9jg
🇺🇸 The ISM’s semi-annual survey showed purchasing managers see capital spending:

⬆ 6.0% in 2019 in manufacturing (below the 10.1% projection made for 2018 in May)

⬆ 3.4% in 2019 in services (below the 6.8% projection made for 2018 in May)

*Lin: bit.ly/2hf9khA
🇺🇸 The Business Roundtable survey (4Q18) showed that sentiment among US corporate leaders declined for the third straight quarter.
*Plans for capital investment and hiring and sales expectations all declined compared with the prior quarter.
*Link: bit.ly/2rxqJrY
🇺🇸 The latest CNBC/SurveyMonkey Small Business Survey showed that after five straight quarters of gains, those who say conditions for business are currently "good" dipped from 58% to 55% in 4Q18.
cnbc.com/2018/12/10/cnb…
🇺🇸 The net share of companies expecting the economy to improve in 6 months dropped in November to a two-year low of 22% (vs 33% prior) - NFIB
*Small business optimism: 104.8 (lowest since April 2018) vs 107.4 prior
*Link: bit.ly/Lg4Ndz
🇦🇺 #Australia | #Sydney’s property market ⬇ has reached a new milestone, with values falling further than the late 1980s - Bloomberg
*Home values ⬇ 10.1% since their 2017 peak, surpassing the top-to-bottom ⬇ of 9.6% recorded between 1989 and 1991
*Link: bloom.bg/2L9WRe4
🇪🇺 #EUROZONE DEC PRELIMINARY MANUFACTURING PMI: 51.4 V 51.8E (34-month low)
*Services PMI: 51.4 v 53.4e (49-month low)
*Composite PMI: 51.3 v 52.8e (49-month low)
*Link: bit.ly/2zZAwf8
🇪🇺 #EUROZONE PMIs: "New export orders (which include intra-eurozone trade) fell for the third successive month, recording the steepest decline since the series began over four years ago". ❗
🇪🇺 The slowdown in #Eurozone PMIs is due to:
1/ A contraction in #France private sector amid violent protests
2/ A global trade slowdown (fading frontloading due to U.S/#China truce and existing tariffs).
3/ Rising political uncertainty (#Brexit, EU parliament election, etc.)
🇪🇺 As a reminder, as expected (bit.ly/2QwonID), yesterday, the #ECB cut its GDP forecasts for:
*2018 (from 2.0% to 1.9%)
*2019 (from 1.8% to 1.7%)
*Link: bit.ly/2QB33SE

➡ 2018f is now in line with my view but 2019f looks a bit optimistic
🇨🇳 #China sparks suspicion as it holds release of statistics - Nikkei
*Concealment added to whispers that Beijing doctors figures
asia.nikkei.com/Economy/China-…
🇨🇳 #China | As an example, the article highlighted the Guandong PMI was not published on its 1-Nov scheduled date. Analysts speculated that it was because Guandong is highly geared towards exports to Europe and the US.

🇨🇳 #China | Yesterday, Central Bank Governor Yi Gang noted that there is increasing downward pressure on the economy which was confirmed by stats this morning:

➡ Growth in retail sales slowed to +8.1% YoY in Nov. (the weakest reading since June 2003)
🇪🇺 Some #ECB policymakers wanted even more cautious tone on economy - sources - Reuters
uk.reuters.com/article/uk-ecb…
🇪🇺 #ECB Draghi warns EU leaders that growth is slowing - Reuters
reuters.com/article/us-ecb…
🇯🇵 #Japan trims 2019 growth forecast to 1.3% (from 1.5% prior) - Nikkei
asia.nikkei.com/Economy/Japan-…
🇰🇷 #SouthKorea 's economy to grow 2.6 pct-2.7 pct in 2019 (down from 2.9% prior): gov't - Yonhap
en.yna.co.kr/view/AEN201812…
🇺🇸 Americans Turn More Pessimistic on Economy, Trump Approval Down - Bloomberg
bloomberg.com/news/articles/…
Recent market 'jolt' will be first of many as easy money era ends, says BIS - Reuters
reuters.com/article/us-bis…
🇨🇳 #China Sees Bankruptcies Surge; Bondholders May Get Less Back - Bloomberg
*Missed bond payments in 2018 have almost quadrupled the tally last year
*Link: bloom.bg/2QDU6YH
As expected | 🇩🇪 #Germany’s dominant car industry may take longer than feared to recover from a slump, weighing on growth in the euro zone’s biggest economy, the Bundesbank said in a monthly economic report on Monday - Reuters
in.reuters.com/article/us-ger…
🇨🇳 As trade war bites, #China advisers recommend lowering 2019 growth target - Reuters
reuters.com/article/us-chi…
🇨🇳 Chinese President Xi Jinping said on Tuesday that #China's reforms and opening up are not easy, and could face unimaginable storms - Reuters
uk.reuters.com/article/uk-chi…
🇨🇳 #China Inc. to Suffer More Defaults in 2019 as Profits Stall - Bloomberg
*Energy sector leads China’s record local bond default in 2018
*Private firms will face increasing liquidity pressure: S&P
*Link: bloom.bg/2Civxrs
🇯🇵 #Japan | In line with Nikkei discussion (bit.ly/2QF79ZK), the government revised ⬇ its forecasts for:
*FY18 to 0.9% (vs 1.5% prior)
*FY19 to 1.3% (vs 1.5% prior)

➡ Both still look optimistic.

reuters.com/article/us-jap…
🇩🇪 #GERMANY DEC IFO BUSINESS CLIMATE: 101.0 V 101.7E (lowest since Sept. 2016); CURRENT ASSESSMENT: 104.7 V 105.0E (lowest since June 2017)
- Expectations Survey: 97.3 v 98.3e (lowest since Nov. 2014)
Meanwhile...

🇹🇷 #Turkey retail sales suffer worst drop on record - FT
*Sales volumes fell by 7.5% YoY in October, the sharpest decline since records began in 2010.
*It follows a 3% drop in Sept., the first annual contraction since Feb. 2017
*Link: on.ft.com/2A71tgR
🇨🇳 #China | Xinhua reports the National Bureau of Statistics (NBS) said Guangdong Province has violated the law by surveying and publishing the local purchasing managers' index (PMI) with an expired license.
xinhuanet.com/english/2018-1…
FedEx Corp. plunged as as a darkening view of demand for shipping services outside the U.S. prompted the company to slash its profit forecast and pare international air-freight capacity - Bloomberg
*Link: bloom.bg/2EEF7Hg
*The company noted that world trade slowed in Q3 to just +3.5% vs +5.3% in Q317 (bit.ly/2SbUrOU)

➡ As already discussed, my proxies pointed to more slowdown in the coming months.

➡ In detail, an uptick is very likely in Oct. before another sharp slowdown from Nov.
🇯🇵 #Japan November Exports YoY: 0.1% vs 8.2% prior
*Imports YoY: 12.5% vs 19.9% prior

*Real exports YoY: -2.4% vs +6.3% (largest ⬇ since Jan. 2016)
*Link: bit.ly/2EBb8QJ
🇳🇿 #NEWZEALAND Q3 GDP Q/Q: 0.3% V 0.6%E; Y/Y: 2.6% V 2.8%E
reuters.com/article/newzea…
One of World Trade's Top Prognosticators Is Worried About 2019 - Bloomberg
*The WTO in Sept. ⬇ its forecast for global trade growth, predicting the volume of goods moving around the world would expand by 3.9% this year and slow to 3.7% in 2019.
bloomberg.com/news/articles/…
Koopman said the organization was holding to those forecasts for now, though he added that risks were rising that they could be ⬇ again early next year.

➡ My proxies suggest that world trade growth is set to moderate to ~+3.5% in 2018 and <3% in 2019.

🇰🇷 #SouthKorea | Trade data for the first 20 days of Dec. showed:
*a 1.0% YoY ⬆ in total exports (6-month low; vs +5.7% in Nov.)
*a 14.2% YoY ⬇ in exports to #China (largest ⬇ since October 2016 vs -4.1% in Nov.)
*Link: bit.ly/2Ac6GUJ
🇰🇷 | A contraction of semiconductor exports of 9.8% YoY (vs +3.5% in Nov.) also suggests a rapid softening of the global #tech sector, for which #SouthKorea is a key supplier.
bloomberg.com/news/articles/…
As expected (bit.ly/2CxCMf0), CPB data showed World trade growth (volume) ⬆ in Oct. (+4.7% YoY vs +2.5% YoY) due to front-loading and #Japan recovery
*Link: bit.ly/2T4KAum

➡ I still expect a sharp slowdown from Nov. amid ⬇ activity and negative base effect
The acceleration seen in Oct. is larger than I expected, suggesting that world trade growth (in volume) should average [3.6%-3.7%] based on World Bank measure.
*It would be down from 4.8% in 2017 but up compared to my previous forecast for 2018 (~+3.5%).

🇯🇵 🇨🇳 Japanese carmakers Nissan and Mazda will cut production in #China by 20% after the country’s new car market shrank in 2018 for the first time in 28 years - Nikkei
*Link (Japanese): nikkei.com/article/DGXMZO…
🇨🇳 Automakers in #China put the brakes on production - Nikkei
asia.nikkei.com/Business/Compa…
🇩🇪 #Germany | Almost 53 percent of so-called “Mittelstand” companies surveyed by the BVMW industry association fear that a recession could strike in the next 12 months, the group said Friday - Bloomberg
*Link: bloom.bg/2CD2uPh
🇨🇭 In December, the KOF Economic Barometer fell by 2.6 pts to 96.3.
*More clearly than last month, the indicator lies below its long-term average.
*Link: bit.ly/2ETbTUz
🇨🇳 #CHINA DEC #MANUFACTURING PMI: 49.4 V 50.0E (lowest since Feb 2016); NON-MANUFACTURING PMI: 53.8 V 53.2E (2-month high)
- COMPOSITE PMI: 52.6 V 52.8 PRIOR (record low since records began in Jan. 2017)
*Link: bloom.bg/2RnCRdH
🇨🇳 #CHINA DEC #MANUFACTURING PMI (1):
- The weakness was driven by domestic factors, reflected by the ⬇ in the sub-components for:
*new orders (-0.7 to 49.7; 1st contraction since Feb. 2016)
*output (-1.1 to 50.8; 10-month low)
*imports (-1.2 to 45.9; lowest since Feb. 2016)
🇨🇳 #CHINA DEC #MANUFACTURING PMI (2):
- The significant ⬇ in commodity prices weighted on input price index (-5.5 to 44.8; lowest since Nov. 2015) suggesting that:
*PPI YoY will ⬇
*Industrial profits will keep ⬇
🇨🇳 #CHINA DEC #MANUFACTURING PMI (3):
- Other figures suggest that trade growth will remain under pressure:
*Indexes for imports (-1.2 to 45.9; lowest since Feb. 2016) and new export orders (-0.4 to 46.6; lowest since Nov. 2015) remained in contraction territory.
🇨🇳 #CHINA DEC #MANUFACTURING PMI (4):
- Finally, the sub-component for business expectations tumbled 1.5 pts to 52.7. *While still a positive reading (>50), it was the lowest since January 2016.
🇰🇷 #SouthKorea Dec Exports YoY: -1.2% (3-month low) v 2.5%e
*It was down from -1.0% in the first 20 days of Dec.
*Shipments of semiconductors, which dominate the country’s exports, fell 8.3% YoY (largest drop since April 2016).
bloomberg.com/news/articles/…
🇨🇳 #CHINA DEC CAIXIN #MANUFACTURING PMI: 49.7 V 50.2E (first contraction since May 2017)
*New Orders index: 49.8 v 50.9 prior (first contraction since June 2016)
*New export orders ⬇for the 9th month in a row
*Link: bit.ly/2QeZRqI
🇰🇷 🇹🇼 🇨🇳 🇺🇸 #SouthKorea and #Taiwan remained in contraction territory in Dec. as slowing #smartphone demand and U.S.-#China #trade tensions hit home.
*#Manufacturing PMIs:
- SK: 49.8 v 48.6 prior
- TW: 47.7 (lowest since September 2015) v 48.4 prior
🇰🇷 Focusing on #SouthKorea, export orders declined for the 5th consecutive month in Dec.
*Link: bit.ly/2Apb56U

➡ Yesterday, data showed that exports contracted YoY over the same period.

#China Leads Slump in #Asia Factories as #TradeWar Cools Demand - Bloomberg
*#Manufacturing oriented economies in Asia already feeling pain
*Link: bloom.bg/2AsbJjS
🇸🇪 🇪🇺 #Sweden Dec PMI #Manufacturing: 52.0 v 56.2e (lowest since Feb 2016)
- Prior revised lower from 56.7 to 55.4

➡ Sweden PMI is often seen as a leading indicator for a broader slowdown in European manufacturing.

bloomberg.com/news/articles/…
🇹🇷 #Turkey Dec #Manufacturing PMI: 44.2 (3-month low; 9th straight contraction) v 44.7 prior
*Link: bit.ly/2LMbftf
🇦🇺 #Sydney #Housing Slump Deepens as Prices Drop Most Since 1980s - Bloomberg
*Prices in #Australia’s largest city drop 11.1% from 2017 peak
*Link: bloom.bg/2SwkGQn
🇰🇷 #SouthKorea's #KOSPI index, a proxy for world trade growth, remained under pressure this morning and points to a sharp slowdown.
As flagged several times (bit.ly/2F5tQQG), I expect a sharp slowdown of global trade growth from Nov amid:
*⬇ activity
*negative base effect
*the end of frontloading (in line with the ⬇ normalization of #Shanghai-LA containers rate)
🇨🇳 #China's Q4 GDP growth highly likely fell below 6.5%: magazine - Global Times
*Downward pressure comes from the China-US #tradewar, one-size-fits-all policies and inaction at some agencies.
*Note: 3Q GDP was up 6.5% YoY
*Link: globaltimes.cn/content/113437…
Global #Manufacturing PMI: 51.5 (27-month low) V 52.0 prior
*New order growth was the weakest since August 2016.
*Link: bit.ly/2To631k
Global #Manufacturing PMI: New Exports Orders ⬇ in Dec. (-0.2pt to 49.6; lowest since May 2016) and remained in contraction territory for the 4th straight month.
*As discussed (bit.ly/2GRnMgo), I expect a sharp slowdown of global trade growth from Nov.
Last month, I cut my global GDP forecast for 2019 (for the first time since May 2018) from 3.5% to 3.4% as global trade growth won't exceed 3% this year (based on World Bank methodology).
*It was +4.8% in 2017 and likely ~3.6%/3.7% in 2018.
🇺🇸 #Apple Cuts Sales Outlook on Weakness in #IPhone Demand, #China - Bloomberg
*The announcement sent shares down as much as 8.5 percent in extended trading.
*Letter from Cook to investors (apple.co/2TnIC8E)
bloomberg.com/news/articles/…
Excluding specific factors, the announcement is only a confirmation of what I described on the macro front:
*A significant ⬇ in the semiconductor sector seen via 🇰🇷 exports (bit.ly/2LN3Wlj)
*A slowdown in #China (bit.ly/2AtDHMp)

🇺🇸 🇨🇳 *HASSETT: `LOT' OF COS. COULD SEE SLOWING EARNINGS ON #CHINA - BBG
*CHINA ECONOMY SLOWING, COULD BE RECESSION, HASSETT SAYS ON CNN
🇦🇺 🇭🇰 🇸🇬 🇨🇳 #Housing | #Property Markets From Hong Kong to Sydney Join Global Slump - Bloomberg
*Rising interest rates, volatile stocks have dented sentiment
*Link: bloom.bg/2BW1sMS
🇮🇹 #ITALY DEC SERVICES PMI: 50.5 V 50.1E (3-month high)
*Composite PMI: 50.0 v 49.3e (3-month high)
*Link: bit.ly/2Qm1y5I

➡ Dec. print was above expectations, yet, the Composite PMI reached 49.6 in 4Q suggesting another contraction (and therefore a technical recession)
🇮🇹 #Italy | Yesterday, the #BOI coincident indicator decreased to -0.19 in Dec. (lowest since Dec. 2014)
*It fell to -11 in 4Q18 (lowest since 1Q15 and down from +2 in 3Q18)
*Link: bit.ly/2VnyIFP
🇫🇷 Dec. Services and Composite PMIs were revised ⬇ compared to flash estimates suggesting that the impact of #YellowVestProtests was stronger than initially feared.
*As I expected (bit.ly/2R8VkLP), 4Q GDP should be close to 0%.
Dec. Global Composite PMI:
*Output: 52.7 (27-month low) v 53.2 prior
*New Export Orders: 49.7 v 50.0 prior (2nd contraction during the past four months).
*Link: bit.ly/2sbRxOH
🇨🇳 Nervous markets: how vulnerable is #China’s economy? - FT
*An economics professor at Renmin University in #Beijing sparked a minor furore last month when he claimed a secret government research group had estimated growth could be as low as 1.67% in 2018
ft.com/content/5839f5…
🇲🇴 Morgan Stanley switched its view on the world’s biggest #gambling hub, estimating a 2% ⬇ in 2019 revenue (down from +5%) - Bloomberg
*Earlier this month, JPMorgan forecasted revenue would ⬇ 1% in 2019.
*Analysts expect a ⬇ this month (would break a 29-month growth streak)
🇯🇵 #Japan Dec PMI Services: 51.0 v 52.3 prior (3-month low)
*PMI Composite: 52.0 v 52.4 prior (3-month low)
*Link: bit.ly/2LSpaOy
🇦🇺 #Australia Dec AIG #Manufacturing Index: 49.5 v 51.3 prior (first contraction in 26 months, lowest reading since Aug 2016)
*Exports 47.1, -3.8 pts
🇩🇪 #GERMANY NOV FACTORY ORDERS; Y/Y: -4.3% (largest decline since Aug. 12) V -2.7%E
*Prior YoY revised lower from -2.7% to -3.0%.

➡ It's a good leading indicator of global trade growth, which suggests more downside ahead.
🇩🇪 #GERMANY NOV INDUSTRIAL PRODUCTION M/M: -1.9% V +0.3%E (largest MoM ⬇ since July 2018); Y/Y: -4.7% V -0.8%E (largest YoY ⬇ since Dec. 2009)
- Prior MoM revised lower from -0.5% to -0.8%
- Prior YoY revised lower from 1.6% to 0.5%

🇩🇪 The downward revision in October and the sharp drop in November suggest that German GDP is unlikely to rebound significantly in 4Q.
Given that 🇫🇷 GDP will be also muted in 4Q (bit.ly/2Ripnkk), EU GDP will come below ECB expectations (+0.4%e QoQ), likely implying a downward revision for 2018 (from +1.9% to +1.8%).
🇪🇺 It implies a lower base effect for 2019 and reinforces my bearish view that both the consensus and the #ECB are too much optimistic on 2019 GDP:
*Bloomberg consensus: +1.6%
*ECB: +1.7% (bit.ly/2QB33SE)
🇪🇺 I would not be surprised if the #ECB acknowledges the recent growth slowdown at the next meeting (Jan. 24) or before and clearly prepares the ground for supportive measures such as new TLTROs (reut.rs/2SsIlk7)

🇩🇪 *Note that 2018 German GDP will be released on Jan. 15.
🇰🇷 Samsung Q4 Profit Forecast disappointed as smartphone and memory markets slowed (reut.rs/2GWxgqC).

➡ It's coherent with macro data namely the sharp decline in Korean exports of semiconductor seen in Dec. (-8.3% YoY; largest contraction since Apr. 2016)
🇪🇺 #Eurozone DEC BUSINESS CLIMATE INDICATOR: 0.82 V 1.00E (lowest since Mar. 2017)
*Dec Economic Confidence: 107.3 v 108.2e (lowest since Dec. 2016; )

➡ Economic confidence slid for a 12th month in December ❗
More charts ahead of the World Bank Global Economic Update:

RWI/ISL Container Index rose only 1.3% YoY in Nov., down from +3.8% YoY in Oct.
*A part of the recent increase included a surge in empty containers being shipped back to Asia - Bloomberg
*Link: bloom.bg/2QXHMCQ
#Hongkong Air Freight Index fell 2.1% YoY in Nov. (largest drop since Mar. 2018), down from +2.8% YoY in Oct.
Harpex Weekly Shipping Index (4-week moving average) fell from +6.1% YoY in Mid-Nov. 2018 to +1.6% YoY in early Jan. 2019
More and more figures suggest that the end of frontloading has led to a significant slowdown in global trade growth reflecting the real underlying trend.
🇺🇸 🇨🇳 Imports at major US container ports are leveling off after retailers’ months-long rush to bring in Chinese merchandise before higher tariffs hit - NRF
*January is forecast at 1.75 million TEU, down 0.9 percent from January 2018 ❗
*Link: bit.ly/2CX4zWr
🇨🇳#CHINA DEC. RETAIL PASSENGER VEHICLE SALES -19% ON YEAR: PCA - BBG
*CHINA 2018 RETAIL PASSENGER VEHICLE SALES FALL 6.0% ON YEAR
*CHINA CAR SALES HAVE FIRST ANNUAL DROP IN MORE THAN 2 DECADES
As I expected (bit.ly/2FjzdLn), the World Bank cut its 2019 forecasts for:
*Global GDP (PPP weights) from +3.8% to +3.5%
*World Trade Volume from +4.2% to +3.6%
*Link: bit.ly/1gIuEF3

➡ It still looks a bit optimistic especially for World Trade Volume growth.
🇩🇪 German lighting and semiconductor specialist Osram Licht AG is facing “dark clouds on the horizon” in 2019 after the most recent quarter was worse than expected, CEO Olaf Berlien told German newspaper Augsburger Allgemeine.
uk.reuters.com/article/uk-ger…
🇬🇧 Jaguar Land Rover to make 'substantial' job cuts after #China, #diesel slump- source - Reuters
reuters.com/article/us-jag…
🇨🇳 #China’s factory inflation slowed sharply in December, continuing the slowdown for a sixth straight month to the weakest level since Sept. 2016.
*It adds concerns over corporate profitability.
*Dec. PPI Y/Y: 0.9% V 1.6%E

🇪🇸 #SPAIN SEES 2.2% GROWTH IN 2019: CALVINO - BBG
*SPAIN ECONOMY PROBABLY GREW 2.6% IN 2018, CALVINO SAYS
*SPAIN CUTTING GROWTH ESTIMATE ON TIGHTER FISCAL STANCE: CALVINO
🇪🇺 Looking ahead, the suggestion was made to revisit the contribution of targeted longer-term refinancing operations to the monetary policy stance. - #ECB MINUTES
*Link: bit.ly/2SHZsyW

🇨🇳 #CHINA TO SET LOWER GDP GROWTH TARGET OF 6%-6.5% IN 2019 - SOURCES - RTRS
🇨🇳 #CHINA MAY KEEP 2019 BUDGET DEFICIT TARGET BELOW 3% GDP: REUTERS
*CHINA TO KEEP CONSUMER INFLATION TARGET AT 3% IN 2019: REUTERS
🇨🇳 #China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand.
uk.reuters.com/article/uk-chi…
🇺🇸 🇨🇳 U.S.-#China Speed Dating Isn’t Enough to Tame Global Headwinds - Bloomberg
bloomberg.com/news/articles/…
In line with #France, #Germany, #Spain and #Portugal, #Italy IP fell in Dec.

🇮🇹 Nov Industrial Production M/M: -1.6% v -0.3%e; Y/Y: -2.6% v +4.2% prior
*IP WDA Y/Y: -2.6% v 0.4%e

➡ It confirms that #Italy could be in "technical" recession in 4Q18 (bit.ly/2M8MwQk)
🇬🇧 🇪🇺 CBI head to warn no-deal #Brexit ‘cannot be managed - FT
ft.com/content/59c348…
🇪🇺 🇩🇪 #ECB'S NOWOTNY SAYS GERMANY LIKELY HAVE VERY LOW GROWTH RATE IN Q4
fxstreet.com/news/ecbs-nowo…
🇺🇸 Economists surveyed by Bloomberg over the past week see a median 25 percent chance of a slump in the next 12 months, up from 20 percent in the December survey and the highest in more than six years,
🇺🇸 Nearly half (48.6%) of U.S. CFOs believe that the U.S. will be in recession by the end of 2019, and 82% believe that a recession will have begun by the end of 2020, according to the Duke University/CFO Global Business Outlook.
*Link: bit.ly/2VNbFo0
🇺🇸 Several proxies also show that CAPEX expectations ⬇ further in December - Bloomberg
🇺🇸 🇨🇳 Another analysis (bit.ly/2D8msC1that) suggests the end of frontloading has led to a significant slowdown in global trade growth.
*Bloomberg link: bloom.bg/2Ayvw1h
🇭🇰 Hong Kong Air Transport Movements (Freight) fell 5.2% YoY in Dec. (largest contraction since Feb. 2016) v -2.1% YoY in Nov.
*Link: bit.ly/2SvU16q
As I expected:

🇨🇳 #CHINA DEC. IMPORTS -7.6% Y/Y IN DOLLAR TERMS; EST. +4.5%
*Largest contraction since July 2016.

🇨🇳#CHINA Dec Exports YoY: -4.4% v 2.0%e (largest ⬇ since Dec 2016)

➡ Frontloading appears to be fading

*Imports YoY: -7.6% v 4.5%e (largest ⬇ since July 2016)

➡ It reflects ⬇ exports, weaker domestic demand and ⬇ commodity prices

*Link: bloom.bg/2AMMPLY
As I already warned, more and more figures (bit.ly/2D7pkz5; bit.ly/2D8msC1) suggest that the end of frontloading has led to a significant slowdown in global trade growth reflecting the real (weak) underlying trend ❗
🇩🇪 #Germany automotive supplier Continental said its operating margin would fall this year, citing mounting pressure on the car industry which is struggling with a shift away from combustion engines towards electric cars - Reuters
*Link: uk.reuters.com/article/uk-con…
🇪🇺 I think that economists and the #ECB remain too much optimistic about growth prospects.
*We'll see more ⬇ revisions in the coming weeks.

As I expected:

🇪🇺 Eurozone Nov Industrial Production M/M: -1.7% v -1.5%e; Y/Y: -3.3% v -2.1%e

#OECD Nov. Leading Indicator: 99.3 v 99.4 prior
*Composite leading indicators, designed to anticipate turning points in economic activity relative to trend 6 to 9 months ahead, continue to point to ⬇ growth momentum.
*Link: bit.ly/2snBNZ6
🇨🇳 #China | After officials noted that downward pressure increases and favored new fiscal, monetary and technical measures, we can fear that figures for Dec. and 4Q (IP, RS, FAI, GDP) will be disappointing next Monday.

🇩🇪 German Economy Probably Grew Slightly In 4Q18 - Stats Office – RTRS

➡ The limited rebound is lower than the consensus expected (+0.4%e for Bloomberg consensus) implying lower base effect for 2019.

🇩🇪 🇪🇺 It confirms my view (bit.ly/2RxxIAv; bit.ly/2RvY2Lu; bit.ly/2Mf58OE) that both the consensus and the #ECB need to adjust their expectations downward for 2019.

🇪🇺 #ECB DRAGHI: RECENT ECONOMIC DEVELOPMENTS WEAKER THAN EXPECTED - BBG
*DRAGHI: UNCERTAINTIES, ESPECIALLY GLOBAL RISKS, STILL PROMINENT
*DRAGHI: NO ROOM FOR COMPLACENCY, SIGNIFICANT STIMULUS NEEDED
🇪🇺 *EUROPEAN DECEMBER CAR SALES DOWN 8.7% TO 1.04M UNITS: ACEA - BBG
*EUROPEAN 2018 CAR SALES DROP 0.04%, FIRST DECLINE SINCE 2013
🇯🇵 #Japan's November machinery orders stall in worrying sign over business spending - Reuters
reuters.com/article/us-jap…
🇦🇺 #Australia | The Westpac Banking Corp.-Melbourne Institute Consumer Sentiment Index for January dropped 4.7% (biggest drop since September 2015) to 99.6 (lowest since Sept. 2017) amid pessimism over falling property prices (bit.ly/2FtW7Az) and economic growth.
🇨🇳 SCMP reports that 8 out of the 12 provinces in #China that have published their annual growth targets have lowered their expectations.
*#Henan is now targeting GDP growth of 6.5% (⬇ from ~7.5%)
*#Beijing sees growth in the 6-6.5% range (⬇ from 6.5%)
beta.scmp.com/economy/china-…
🇬🇧 #Brexit | Credit Conditions Survey - 2018 Q4 - BOE
*Lenders reported that demand for secured lending for house purchase decreased significantly in Q4, and was expected to decrease further in Q1.
*Link: bit.ly/2TTnrvl
🇨🇳 #CHINA'S CAR-RELATED PRODUCTION FELL 30% YOY IN NOVEMBER: NIDEC - BBG
*As a reminder:
asia.nikkei.com/Business/Compa…
🇺🇸 The #governmentshutdown has also affected U.S. trade activity:

Several reports showed that "the protracted impasse threatens to add backups at US borders that would boost freight rates" - Business Times
businesstimes.com.sg/transport/us-s…
🇺🇸 A shortage of TSA staff has also created significant delays in airports, which even closed terminals - Telegraph
telegraph.co.uk/travel/news/us…
🇸🇬 #Singapore Dec Non-Oil Domestic Exports y/y: -8.5% v +2.0%e (largest ⬇ since October 2016)
- Electronic Exports y/y: -11.2% v 4.3% prior (largest ⬇ since Feb. 2018)
‘Goldilocks Economy’ References Doomed as Global Storms Set In - Bloomberg
*Trade-war side effects and cyclical weakness are tangled up in ugly economic data that continues to pile up across the board
bloomberg.com/news/articles/…
🇮🇹 It confirms fears (bit.ly/2QWaVt1; bit.ly/2M8MwQk) that #Italy was in recession in 2H18.

➡ The ECB should acknowledge the recent growth slowdown next week as the central bank expected 4Q18 GDP to reach 0.4% QoQ.

➡ In addition, it should also highlight that risks associated to its outlook are no longer "balanced".

*Link (French): bit.ly/2HitGat
➡ The #ECB will also revise downward its GDP forecasts on March 7 (quarterly update).

➡ As I already noted (bit.ly/2U5xwWf), the consensus will keep adjusting ⬇ in the coming weeks.
🇺🇸 JAN PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 90.7 V 96.8E
- Current conditions: 110 v 116e
- Expectations: 78.3 v 86.5e

➡ The measures of current conditions and expectations both declined to the lowest since President Donald Trump's election in 2016.
Today, the Harpex Weekly TEU index turned negative YoY for for the first time since March 2017.
*My other proxies also confirm that global trade growth has slowed sharply since Oct. 2018 (bit.ly/2GRnMgo)
*Data link: bit.ly/2AS2D0d
World Economy Wobbles on Eve of #Davos With Politics to Blame - Bloomberg
*Global Policy Uncertainty index reached a record high
*IMF will update its GDP forecasts on Monday.
*Link: bloom.bg/2sC3D3Y
#IMF will update its GDP forecasts on Monday:

➡ I expect sharp downgrades for 2019 especially for Eurozone.

➡ As a reminder, IMF chief Lagarde already made a warning in early Dec.
*Link: bloom.bg/2T1rPZ9
🇨🇳 #CHINA Q4 GDP Y/Y: 6.4% V 6.4%E (it matches the pace seen in 1Q09, lowest since QoQ data were recorded in 1992)
*Overall 2018 GDP Y/Y: 6.6% v 6.6%e (slowest since 1990)
*According to BBG, nominal GDP growth slowed to 8.1% YoY (down from 9.6% YoY in 3Q; weakest since 4Q16)
🇹🇼 #Taiwan Dec Export Orders Y/Y: -10.5% v -2.1% prior (largest ⬇ since April 2016)
*Exports to HK and Mainland Y/Y: -10.3% vs -8.9% prior
*Exports to Europe Y/Y: -28.1% vs -5.7% prior
*MOEA SEES JAN. EXPORT ORDERS FALLING 11.8%-14.1% Y/Y ❗
*Link; bit.ly/2AULZgm
As expected (bit.ly/2FEPbRe), #IMF cut 2019 Wold GDP forecast for second time in three months to 3.5%.
*Link: bloom.bg/2R3yj7W
PricewaterhouseCoopers released a survey showing 30 percent of business leaders expect the expansion to weaken, about six times the number of a year ago - Bloomberg
bloomberg.com/news/articles/…
🇨🇳 Citing Xinhua, Bloomberg reported #China President Xi Jinping stressed the need to maintain political stability in an unusual meeting of top leaders -- a fresh sign the ruling party is growing concerned about the social implications of the slowing.
bloomberg.com/news/articles/…
🇨🇳 #China state planner (NDRC) warns economic pressure will hit job market - Reuters
af.reuters.com/article/commod…
🇮🇹 #Italy | Carige needs 200 million euros of fresh capital: Il Sole 24 Ore citing study - Reuters
reuters.com/article/us-eur…
🇮🇹 After the BOI Friday (bit.ly/2T6Io5T), La Repubblica reports that the EU Commission will cut its 2019 growth forecast for #Italy to 0.6% or “slightly” below.

*In Nov. (bit.ly/2RX57Rk, I already warned that forecasts were optimistic.

uk.reuters.com/article/uk-ita…
🇮🇹 #Italy 2019 GDP | The EU Commission potential downgrade from +1.2% to +0.6% or “slightly” below suggests that 4Q18 GDP would remain negative and therefore the country was in technical recession in 2H18.

➡ First 4Q18 GDP estimate will be released on Jan. 31
🇰🇷 #SouthKorea | Trade data for the first 20 days of Jan. showed:
*a 14.6% YoY ⬇ in total exports (largest ⬇ since September 2016; vs +1.0% in Dec.)
*a 9.5% YoY ⬇ in total imports (largest ⬇ since September 2016; vs +2.2% in Dec.)
*Link: bit.ly/2FNR3X0
🇰🇷 🇨🇳 #SouthKorea | Trade data for the first 20 days of Jan. showed:
*a 22.5% YoY ⬇ in exports to #China (largest ⬇ since Jan. 2009 vs -14.2% in Dec.)
*a 28.8 YoY ⬇ in semiconductor exports (vs -9.8% in Dec.)
*Link: bit.ly/2FNR3X0
🇺🇸 Philadelphia #Fed Non-manufacturing Business Outlook Survey:
*The diffusion index for current general activity at the firm level fell from a revised reading of 6.4 in December to -0.2 in January (1st negative reading since October 2011)
*Link: bit.ly/2T9KiCQ
🇯🇵 #Japan Dec. Exports Y/Y: -3.8% v +0.1% prior (largest ⬇ since Oct. 2016)
*Exports to #China Y/Y: -7.0% vs +0.4% prior (largest ⬇ since Feb. 2018)

➡ I'll scrutinize if Jan. exports rebound on last-minute demand ahead of the 🇨🇳 New Year holidays
*It wasn't the case for 🇰🇷
🇯🇵 #JAPAN JAN PRELIM MANUFACTURING PMI: 50.0 V 52.6 PRIOR (weakest reading since August 2016)
*Production ⬇ for first time since July 2016 (49.2 vs 54.0 prior)
*New export orders ⬇ at fastest pace since July 2016 ❗
*Link: bit.ly/2FKxsb1
🇩🇪 #GERMANY JAN PRELIMINARY MANUFACTURING PMI: 49.9 V 51.5E (1st contraction in 49 months)
*Services PMI: 53.1 v 52.1e (66th month of expansion)
*Composite PMI: 52.1 v 51.9e (2-month high)
*New export orders ⬇ at an accelerated rate ❗
*Link: bit.ly/2CHNNJw
🇪🇺 EUROZONE JAN PRELIMINARY MANUFACTURING PMI: 50.5 V 51.4E (67-month low)
*Services PMI: 50.8 v 51.5e (65-month low)
*Composite PMI: 50.7 v 51.4e (66-month low)
*Link: bit.ly/2RLFVBl
🇪🇺 EUROZONE PMIs: "Exports fell for a fourth successive month, dropping at the steepest rate since comparable data for combined manufacturing and services exports were first available just over four years ago" ❗
🇪🇺 Other figures released this week (🇹🇼 Dec. new export orders, 🇰🇷 Jan. exports, 🇯🇵 Dec. Exports and Jan. Mfg PMI) confirmed that global trade growth is crashing and constitutes a key downside risk.

➡ #ECB is likely to acknowledge the situation.

🇪🇺 As I flagged, the #ECB intensified his warning on the challenges facing the euro-area economy, signaling the risks to growth “have moved to the downside”, a significant change from six weeks ago, when it described the risks as “broadly balanced”.
bloomberg.com/news/articles/…
🇩🇪 The German government has dropped its economic growth forecast for 2019 to 1.0% from 1.8% due to slower global economic growth and uncertainty about #Brexit - Handelsblatt
handelsblatt.com/politik/deutsc…
🇪🇺 COEURE: ECONOMIC SLOWDOWN HAS SURPRISED #ECB - BBG
*COEURE: TOO EARLY TO DISCUSS WHETHER ECB WILL HIKE IN 2019
*COEURE: ECB MAY HAVE TO ADJUST RATE GUIDANCE AT SOME POINT
*COEURE: ECB WON'T OFFER NEW LOANS JUST FOR BANKS' NSFR RULES
🇪🇺 #ECB'S VILLEROY: UNCERTAINTY IS MAIN EXPLANATION OF SLOWDOWN - BBG
*ECB'S VILLEROY: REDUCTION OF STIMULUS WILL BE VERY GRADUAL
🇪🇺 As discussed (bit.ly/2CHQoU7), the #ECB is too much optimistic about its 2019 #Eurozone GDP forecast of +1.7%.

*VILLEROY: ECB WILL PROBABLY DOWNGRADE GDP FORECAST IN MARCH - BBG
🇩🇪 *IFO JAN. GERMAN BUSINESS CONFIDENCE INDEX AT 99.1; EST. 100.7 (matching the lowest since Mar. 2016)
*IFO JAN. GERMAN CURRENT ASSESSMENT INDEX AT 104.3; EST. 104.2 (lowest since June 2017)
*IFO JAN. GERMAN EXPECTATIONS INDEX AT 94.2; EST. 97.1 (lowest since Nov. 2012)
🇪🇺 #ECB: FORECASTS CUT EURO-AREA GDP PROJECTIONS ACROSS HORIZON - BBG
*Link: bit.ly/2S8axwb
🇪🇺 *VASILIAUSKAS SAYS EXPECTS #ECB FORECASTS TO BE REVISED - BBG
*VASILIAUSKAS SAYS ECB BALANCE OF RISKS HAS `NEGATIVE OUTLOOK'
*VASILIAUSKAS: NO REASON TO CHANGE ECB GUIDANCE `AT THIS POINT'
*VASILIAUSKAS: TLTROS COULD POTENTIALLY PLAY A ROLE
🇺🇸 Total wholesale shipments of recreational vehicles fell for the 5th straight month, dropping 21.7% YoY in Dec. 2018 (vs -20.3% YoY prior) - RV Industry Association
*Link: bit.ly/2FZjm4Y
As I expected (bit.ly/2sNkPDJ; bit.ly/2GRnMgo), CPB data showed that global trade growth (volume) slowed sharply in Nov. to +0.7% (slowest since Oct. 2016) v +5.1% prior amid:
*the end of frontloading
*weak underlying activity
*negative base effect
*On a MoM basis, world trade growth (volume) ⬇ 1.6% (largest ⬇ since April 2017) and confirms that the recent momentum ⬇ sharply.
*My proxies for Dec. and Jan. suggest that the weakness will last and will probably result in a contraction YoY soon
*Link: bit.ly/2rJjz2d
🇺🇸 Conference Board’s confidence survey for January showed the widest gap between current sentiment and expectations since March 2001, the first month of the U.S. recession that year - Bloomberg
🇨🇳 #China's Economic Woes Have Further to Spread Across #Asia - Bloomberg
*Regional figures confirm that exports YoY are crashing.
*Link: bloom.bg/2Tora48
🇨🇳 #China | Provinces Slash Growth Goals as Slowdown Hits Home - Bloomberg
*Two-biggest economies aim at 6-6.5 percent target for 2019
*Link: bloom.bg/2TorIXK
🇨🇳 #China’s Gloomy Companies Are Slashing Profit Forecasts - Bloomberg
*At least 20 companies project worse earnings late Tuesday
*Link: bloom.bg/2sWzxZe
🇻🇳 #Vietnam Jan Exports YoY YTD: -1.3% v +6.5 prior (1st ⬇ since Jan. 2016; largest ⬇ since Feb. 2014)
*Imports YoY YTD: 3.1% v 5.3% prior (lowest since April 2018)
🇪🇺 #EUROZONE JAN BUSINESS CLIMATE INDICATOR: 0.69 V 0.77E (lowest since Jan. 2017)
*Economic Confidence: 106.2 v 106.8e (lowest since Nov. 2016)
*Industrial Confidence: 0.5 v 0.5e (lowest since Nov. 2016)
*Services Confidence: 11.0 v 11.5e (lowest since Sept. 2016)
🇩🇪 #Germany | Economy Expected to Grow at the Slowest Pace in Six Years - Bloomberg
*Economy to grow 1.0% compared with 1.8% October prediction
*Link: bloom.bg/2CSWOzD
🇮🇹 #Italy Prime Minister Giuseppe Conte says he expects the country’s 4Q GDP contracted, during a press conference in Milan - Radiocor
*Contraction would mean Italy fell into "technical" recession in 4Q
*4Q GDP will be published tomorrow at 10:00 GMT
🇩🇪 #Germany Dec Retail Sales (Real) M/M: -4.3% v -0.6%e (largest ⬇ since May 2007); Y/Y: -2.1% v +1.5%e (largest ⬇ since Sept. 2018)
*Prior MoM revised higher from 1.4% to 1.6%
*Prior YoY revised higher from 1.1% to 1.9%
*Link: bit.ly/2sWINfZ
🇩🇪 #Germany | It suggests that the first guess for 4Q GDP from Destatis two weeks ago ("slight rebound") was probably optimistic and a downward revision in “negative” territory (synonym of "technical" recession) can’t be excluded.

🇨🇳 #CHINA JAN OFFICIAL (NBS) #MANUFACTURING PMI: 49.5 V 49.4 prior (2nd straight contraction)
*New orders ⬇ further to 49.6 (lowest since Feb. 2016)
*New export orders ⬆ to 46.9 v 46.6 prior.
bloomberg.com/news/articles/…
🇬🇧 The survey of 296 SME manufacturers shows that concerns that political and economic conditions abroad were likely to limit their future ability to obtain export orders rose to their highest level on record (since 1988) ❗ - CBI
cbi.org.uk/news/sentiment…
🇬🇧 U.K. Auto Investment Drops Almost 50% as #Brexit Chills Spending - Bloomberg
*Spending dropped below 1 billion pounds for the first time since 2012, when the group started compiling investment statistics, according to Hawes.
*Link: bloom.bg/2SmTCq0
🇮🇹 #ITALY Q4 PRELIMINARY GDP Q/Q: -0.2% V -0.1%E (technical recession❗); Y/Y: 0.1% V 0.3%E
*Prior GDP YoY revised lower from 0.7% to 0.6%
As expected, Eurozone GDP rose 0.2% QoQ in 4Q (unchanged from 3Q but below #ECB Dec. forecast of +0.4%.

🇪🇺 #EUROZONE Q4 ADVANCE GDP Q/Q: 0.2% V 0.2%E; Y/Y: 1.2% V 1.2%E

➡ Earlier, 🇪🇸 figures saved the day coming at +0.7% QoQ (v +0.6% prior)
🇪🇺 🇩🇪 #ECB Weidmann sees longer growth slump, inflation miss - Reuters
*He noted that #Germany’s economic slump will be longer than earlier thought and there is more bad news in the pipeline.
reuters.com/article/us-ecb…
🇨🇳 #CHINA JAN CAIXIN PMI #MANUFACTURING: 48.3 V 49.6E (2nd straight contraction and lowest since Feb. 2016 )
*New orders 47.3 v 49.8 prior (lowest since Sep. 2015)
*Link: bit.ly/2MKZfIY
🇨🇳 #China | The ⬇ in the Caixin PMI (bit.ly/2G34m6R), which covers mainly small firms, is coherent with results of the official PMI showing that conditions for SMEs deteriorated in Jan.
🇨🇳 #China Slowdown Hits Growth Around the Globe - WSJ
wsj.com/articles/china…
#Manufacturing sentiment slumped across #Asia in Jan.

🇹🇼 🇰🇷🇮🇩 #Taiwan, #SouthKorea, and #Indonesia also posted PMI scores below 50, indicating a ⬇ in factory output.

🇯🇵 🇹🇭 🇵🇭 🇻🇳 *Indexes for #Japan, #Thailand, the #Philippines and #Vietnam weakened.
🇲🇴 #Macau Jan casino revenue YoY: -5.0% v +16.6% prior (1st ⬇ after a 29-month growth streak)
*The timing of this #China year’s Lunar New Year didn’t help Macau’s casino takings
*Casino revenue in Macau is expected to decline overall this year
*Link: bit.ly/2HIG0B3
🇰🇷 #SouthKorea Jan. Total Exports YoY: -5.8% v -1.3% (4-month low)
*Exports to #China YoY: -19.1% v -14.0% (largest ⬇ since Jan. 2016)
*Exports of Semiconductor YoY: -23.3% v -8.3% prior (largest ⬇ since Apr. 2009)
*Link (Korean): bit.ly/2HKZlS6
🇮🇹 #ITALY JAN #MANUFACTURING PMI: 47.8 V 48.8E (4th straight contraction and lowest since May 2013)
*New Orders: 46.5 v 47.8 prior (6th straight contraction)
*Link: bit.ly/2TpP7Z1
🇮🇹 As a reminder, La Repubblica revealed last week that the 🇪🇺 Commission will cut its 2019 growth forecast for #Italy to 0.6% or "slightly" below (from +1.2%).

Global #Manufacturing PMI: 50.7 v 51.4 prior (9th straight decline; lowest since August 2016)
*New Orders: 50.1 v 51.1 prior (it rose at the weakest pace during the current six-year sequence of expansion)
*Link: bit.ly/2TsvDTi
Global #Manufacturing PMI: New Exports Orders ⬇ in Jan. (-0.3pt to 49.4; lowest since May 2016) and remained in contraction territory for the 5th straight month.
*As discussed (bit.ly/2SnOeTa), a contraction of global trade growth (on a YoY basis) could happen soon.
Jan. Global #Manufacturing PMI "Output": 50.8 v 51.9 (lowest since June 2016)
*It suggest that global production growth (ex construction) will keep weakening in the coming months.
🇪🇺 🇮🇹 #ECB's Visco Warns of Weaker Growth, Implications for Inflation - Bloomberg
*Bank of Italy head cautions on economic outlook for #Italy
*Weidmann, Villeroy offer similar assessments for euro area
bloomberg.com/news/articles/…
🇨🇳 #China Jan. Caixin Services PMI: 53.6 v 53.9 (3-month low)
*Composite PMI: 50.9 v 52.2 (3-month low)
*Link: bit.ly/2D5jZa2
🇺🇸 🇪🇺 🇨🇳 My interview for @businessinsider with @AkinOyedele
businessinsider.fr/us/2019-econom…
Latest proxies confirm that global trade growth was under pressure in early 2019.
*On a YoY basis, the Harpex TEU Index turned negative in January.
*Link: bit.ly/2UzAbHN
The Baltic Dry Index also confirms weakness in global trade growth.
*Link: bloom.bg/2g0FpYX
🇯🇵 🇨🇳 Asian companies see profit evaporating as #China demand shrinks - Nikkei
*Net profit sank 9%, marking the first decline on a quarterly basis in two years and the largest drop since April-June 2016.
asia.nikkei.com/Business/Busin…
🇨🇳 #China | 395 Cos listed in #Shanghai and #Shenzhen said they expect to record a net loss for 2018, according to Wind data (the biggest ⬇ since at least 2009) - WSJ
*The combined losses could total between CNY289Bn and CNY335Bn.
wsj.com/articles/corpo…
🇪🇺 🇮🇹 #EU MAY LOWER #ITALY 2019 ECO GROWTH FORECAST `DRASTICALLY': SOLE - BBG
🇪🇺 “Increasing uncertainties at the global level constitute a downside risk to the outlook, particularly for business investment,” according to an article to be published in the #ECB’s bulletin.
*Link: bit.ly/2SqxBGJ
🇮🇹 #ITALY JAN SERVICES PMI: 49.7 V 50.0E (has contracted in 2 of the past 3 months; 3-month low)
*Composite PMI: 48.8 v 49.4e (lowest since Nov. 2013❗)
*Link: bit.ly/2DeuWGC
🇩🇪 #Germany Dec #Manufacturing Orders:
*M/M: -1.6% v 0.3%e (largest ⬇ since June 2018)
*Y/Y: -7.0% v -6.7%e (largest ⬇ since June 2012)
🇩🇪 German #manufacturing orders confirm that global trade growth could contract soon on a YoY basis (bit.ly/2SnOeTa; bit.ly/2BnNV11)
Global Composite PMI Output Index fell 0.6 pt to 52.1 (lowest since Sept. 2016)
*Rates of expansion slowed in both the manufacturing (31-month low) and service (28-month low) sectors.
*Link: bit.ly/2Gm9xyl
🇪🇺 🇫🇷 Markit Eurozone Jan. #Construction PMI: 50.6 vs 53.1 prior (lowest since July 2018)
*Firms recorded the slowest rise in new orders for four months, driven by a contraction in new work at French firms.
markiteconomics.com/Survey/PressRe…
🇪🇺 🇮🇹 *EU MAY CUT #ITALY 2019 ECONOMIC GROWTH ESTIMATE TO 0.2%: ANSA - BBG
*ANSA QUOTES EU SOURCES FOR GROWTH ESTIMATE CUT FOR ITALY
*EU ESTIMATES TAKE INTO ACCOUNT DECEMBER BUDGET MEASURES
🇮🇹 #Italy | Bloomberg consensus still expects 2019 GDP to reach 0.65%, which looks a bit optimistic.
🇮🇹 #IMF Sees #Italy GDP at 1% in 2018, 0.6% in 2019, below 1% in 2020 & beyond
*Cites remaining significant challenges such as real incomes per capita still near level of two decades ago, elevated poverty rates and public debt
*Link: bit.ly/2UJyfg4
🇺🇸 The FRBNY’s gauge, which uses the 10-yr/3-mth Treasury yield curve to predict the chance of a recession in the next 12 mths hit its highest since 2008.
*Of the 11 times the indicator ⬆ through this level since the 1960s, 8 have been accompanied by a recession - Bloomberg
🇨🇳 More than 1,000 of China's roughly 3,600 listed companies suffered a net earnings decline for 2018 - Nikkei
*The 1,070 companies reporting a downturn in their December year-end results include more than 400 that expect to book a net loss
asia.nikkei.com/Economy/One-in…
🇨🇳 #China steps up efforts to close failed zombie companies by 2020, but faces harsh economic reality - SCMP
scmp.com/economy/china-…
🇩🇪#GERMANY DEC INDUSTRIAL PRODUCTION:
*M/M: -0.4% V 0.8%E (4th straight contraction)
*Y/Y: -3.9% V -3.4%E
- Prior MoM revised higher from -1.9% to -1.3%
- Prior YoY revised higher from -4.7% to -4.0%
🇩🇪 #Germany | It confirms (bit.ly/2SdqEcT) that the first guess for 4Q GDP from Destatis ("slight rebound") was probably optimistic and a downward revision in “negative” territory (synonym of "technical" recession) can’t be excluded.

🇪🇺#ECB: INCOMING INFORMATION HAS SURPRISED TO THE DOWNSIDE - BBG
*ECB: PRIVATE CONSUMPTION IS EXPECTED TO REGAIN MOMENTUM
*Link: bit.ly/2DZXCEH
🇪🇺 🇮🇹 🇩🇪 #EU CUTS #ITALY'S 2019 GROWTH FORECAST TO 0.2% FROM 1.2% - BBG
*EU CUTS 2019 EURO-AREA GROWTH FORECAST TO 1.3%; PREV. EST. 1.9%
*EU SEES 2019 GERMAN GDP GROWTH 1.1%; PREVIOUS ESTIMATE 1.8%
🇬🇧 🇪🇺 #BOE CUTS GROWTH FORECAST, SAYS BREXIT DAMAGE HAS INCREASED - BBG
*BOE CUTS 2019 GDP FORECAST TO 1.2% V 1.7%, 2020 1.5% V 1.7%
🇮🇹 #Italy industrial production fell for a fourth straight month, in a sign the recession that started late last year may persist:

*M/M: -0.8% v +0.4%e;
*WDA Y/Y: -5.5% v -2.7%e

*Link: bloom.bg/2ROfoyv
Latest weekly figures suggest that global trade growth kept deteriorating in early 2019.
*The Harpex TEU Index is now contracting at the fastest pace since March 2017.
*Link: bit.ly/2UzAbHN
The Baltic Dry Index also raises concerns about weakness in global trade growth.
*Link: bloom.bg/2g0FpYX
A slowing global economy, coupled with weak demand from #China over the Lunar New Year and from #Brazil after Vale SA’s iron ore disaster, is dragging shipping rates to near record lows, and few in the industry expect things to improve any time soon - WSJ
wsj.com/articles/free-…
The ifo World Economic Climate deteriorated for the fourth time in succession (longest straight since 1Q 2009).
*In the first quarter, the indicator dropped from -2.2 points to -13.1 points (lowest since 4Q 2011).
*Link: bit.ly/2GlrcqH
🇨🇳 #China | Despite new stimulus dedicated to household consumption in early January, results look disappointing with sales (in the retail and food-and-drink) rising only 8.5% YoY (down from 10.2% last year and the slowest since data going back to 2005).

🇨🇳 #China | Usually, the pace of growth observed over the Lunar New Year holidays is higher than the annual average, which implies downside potential to the 2019 government expectation of +9%.
🇨🇳 #China GDP growth tipped to slow to 6% in Q1: state-run paper - FT
ft.com/content/3051cf…
🇨🇳 #China | As I already noted, I expect a sharp slowdown in Chinese GDP in 1Q before stimulus takes shape (after NPC Congress in early March) and creates the conditions for a potential rebound in 2H19.
🇨🇳 🇯🇵 The FT reports that #Japan Inc’s third-quarter profits fell at the sharpest rate since the 2011 Fukushima earthquake and tsunami as companies faced an abrupt slowdown in #China’s economy owing to the US #trade dispute.
ft.com/content/0e0b0e…
🇬🇧 The economy expanded by 0.2% in 4Q, down from 0.6% in 3Q.
*The monthly GDP figures showed output dropped by 0.4% in Dec. All the main sectors of the economy shrank, with manufacturing falling for a 6th consecutive month, the longest run of declines since the financial crisis
🇨🇳 It’s not really a surprise following disappointing Spring Festival holiday sales (bit.ly/2SHrGNp; bit.ly/2UQYXTP)

#China's consumption growth likely to slow further in 2019: commerce ministry - Reuters
reuters.com/article/us-chi…
🇺🇸 U.S. Small-Business Optimism Falls to Two-Year Low Amid Shutdown - Bloomberg
*The National Federation of Independent Business’s optimism index fell 3.2 points to 101.2, the lowest since November 2016.
*Link: bit.ly/2TJTFJR
🇺🇸 The net share of Cos expecting business conditions to ⬆ in 6 months declined to 6% (lowest since Oct. 2016) and down from a post-election peak of 50%.
Political uncertainty is weighing on businesses, with the group’s Uncertainty Index ⬆ 7 pts to 86 (highest since March 2017)
🇬🇧 Businesses slashed investment by almost 4% in the final three months of 2018 as #Brexit uncertainty ⬆ - Bloomberg
*The decline from a year earlier, the equivalent of nearly £2 billion ($2.6 billion) of lost spending, was the largest since the financial crisis a decade ago.
🇺🇸 The number of #auto loans at least 90 days late exceeded 7M in 4Q18 (highest since two decades)
*It ⬆ to 4.47% of the total in 4Q18 (highest since 1Q12)
*The % of consumers with the weakest credit who fell seriously behind paying off their vehicle was the highest since 2Q10
🇪🇺 Euro Industry Posts Biggest Annual Slump Since Financial Crisis - Bloomberg
*Production drops 0.9% on month, 4.2% from a year earlier (largest ⬇ since Nov. 2009).
*Link: bloom.bg/2N2ABE0
#FED BOSTIC SAYS SLOWDOWN IN #CHINA AND #EUROPE HAS BEEN SIGNIFICANT - BBG
🇩🇪 #Germany GDP stagnated in 4Q18 (vs +0.1%e) after contracting by 0.2% in 3Q18.
*It implies lower base effect for 2019. In other words, it would be a good performance if GDP grows by 1.0% (current gvt estimate)
*Link: bloom.bg/2TO6djn
🇩🇪 #Germany | The Bloomberg consensus estimate for 2019 GDP should be revised downward in the coming weeks.
🇨🇳 #China’s exports unexpectedly returned to growth in January (with companies trying to ship goods ahead of the Lunar New Year shutdown likely boosting the result) while imports kept ⬇ amid weak domestic activity.
uk.reuters.com/article/uk-chi…
🇺🇸 🇨🇳 #Trade with the U.S. declined in Jan. with exports to the U.S. in dollar terms dropping by 2.4% YoY, and imports slumping by 41.2% YoY.
*It confirms that the tariffs had a significant impact.
🇭🇰 #HongKong Air Transport Movements (Freight) fell 3.9% YoY in Jan. v -5.2% YoY in Dec.
*The index contracts for a third straight month (1st time since Aug. 2015) despite frontloading activity ahead of the Lunar New Year shutdown.
*Link: bit.ly/2SvU16q
🇬🇧 #BOE VLIEGHE: GLOBAL GROWTH, DOMESTIC GROWTH WEAKER THAN EXPECTED - BBG
🇺🇸 In Dec., on a MoM basis, retail sales ⬇ 1.2% v +0.1% prior (largest contraction since Sept. 2009)
*“Control group” (which feeds into GDP data) ⬇ 1.7% MoM (largest contraction since Sep. 2001❗)

➡ Expectations for 4Q GDP will be revised significantly lower.
Business inventories also disappointed confirming upcoming significant ⬇ revisions for 4Q GDP.

🇺🇸 NOV BUSINESS INVENTORIES: -0.1% V 0.2%E (1st decline since March 2018)
🇺🇸 Atlanta Fed cuts Q4 GDP forecast to 1.5% from 2.7%
*Link: bit.ly/1IYTEct
🇨🇳 #China | SAIC Motor drops ~5% in Shanghai, the most since Jan. 2, after reporting Thursday that its vehicle sales slid 14.1% YoY in January.
*Link: bit.ly/2tq4Sno
🇪🇺 #Auto | Europe Just Got a Bad Omen for the Economy in 2019 - Bloomberg
*In Jan., New-car registrations drop for fifth month in row (longest ⬇ straight since March 2013)
*Link: bloom.bg/2IcXB4A
🇨🇳 #China’s Slowing Factory Prices Add to Deflation, Profit Concerns - Bloomberg
*Producer price growth slows for seventh month to +0.1% YoY (slowest since Nov. 2016)
*Link: bloom.bg/2SUpv9t
🇺🇸 Holiday sales were a huge disappointment, retail report says - CNBC
*Holiday sales were up just 2.9% in 2018, the National Retail Federation said on Thursday while it had been calling for a rise between 4.3% and 4.8%.
cnbc.com/2019/02/14/hol…
🇺🇸 In Dec. 2018, Retail Sales in “Food Services & Drinking Places” fell four out of the last five months at a pace (-2.9%) never experienced since Jan. 1994 (-3.2%).
*However, the trend was exacerbated by adverse weather conditions (hurricanes Florence & Michael)
🇺🇸 In Jan., #Manufacturing output ⬇ 0.9% MoM (largest ⬇since May 2018)
*The decline was driven by an 8.8% ⬇ in motor vehicles & parts (largest ⬇ since May 2009)
*Manufacturing, which makes up 75% of total industrial production, accounts for about 12% of the U.S. economy.
🇭🇰 #HongKong's Growth Halved in Fourth Quarter as #Trade War Hit - Bloomberg
*The trade war between the U.S. and China and slowing retail sales dragged #HK’s economic growth down at the end of last year, with exports showing almost "zero growth."
*Link: bloom.bg/2tujHVH
🇺🇸 Citi Research’s gauge on U.S. economic data surprises ⬇ 40.7 pts this week (biggest weekly ⬇ since June 2011) to -23.6 (lowest since Jan., 3).
🇸🇬 #SINGAPORE JAN NON-#OIL DOMESTIC EXPORTS Y/Y: -10.1% V -3.0%E (largest ⬇ since Oct. 2016; 3rd straight contraction)
*Electronic Exports y/y: -15.9% v -11.2% prior (largest ⬇ since June 2014)
*Personal Computer y/y: -34.3% v -20.5% prior (largest ⬇ since July 2016)
🇸🇬 🇨🇳 #SINGAPORE JAN NON-#OIL DOMESTIC EXPORTS TO #CHINA Y/Y: -25.4% v +15.4% prior (largest ⬇ since Oct. 2018)
*#Oil exports to #China: -30.8% YoY (confirming a broad-based ⬇)
*Non-#Oil exports to 🇺🇸 Y/Y: -4.6% v +31.1% prior (largest ⬇ since Apr. 2017)
🇨🇳 Carmakers to Face More Pain as Sales in #China Keep Sliding - Bloomberg
*Jan Passenger vehicle sales to dealerships Y/Y: -17.7% v -15.8% prior
*CAAM predicts another sharp drop in February
*Link: bloom.bg/2V43lPG
Of course, the ⬇ can be attributed to “high base” effect, seasonal issues (🇨🇳 New Year) and #tradewar.

*But details also reveal a synchronized slowdown as non-oil exports to 🇲🇾, 🇭🇰, 🇯🇵, 🇲🇨, 🇹🇼 (key partners) were also down YoY and hit most of sectors.

🇩🇪 #Germany growth to remain subdued at least in first half of 2019 - Bundesbank - Reuters
uk.reuters.com/article/uk-ger…
🇨🇳 🇬🇧 HSBC warns on #China, Britain slowdown as 2018 profit disappoints - Reuters
reuters.com/article/us-hsb…
🇮🇹 #Italy Dec Industrial Sales Y/Y: -7.3% (1st decline since Oct. 2016; largest contraction since Nov. 2009) v +0.5% prior
*Industrial Orders Y/Y: -5.3% (largest contraction since July 2016) v -2.0% prior
The #WTO confirmed my view (bit.ly/2SnOeTa) that global trade growth is on track to slide further in 1Q19.
bloomberg.com/news/articles/…
The quarterly #WTO report registered “steep declines” in most indexes for export orders of air freight, automobile production, electronic components and agricultural raw materials ❗
*WTO trade assessment was the weakest since Mar. 2010
*Link: bit.ly/2DVCOwP
🇯🇵 🇨🇳 #JAPAN JAN Exports y/y: -8.4% v -3.9% prior (fastest ⬇ since Oct. 2016)
*Exports to #China (biggest trading partner) y/y; -17.4% (largest ⬇ since Jan. 2016)
*Link: bit.ly/13OjAW7
🇯🇵 Once again, we can attribute a part of the decrease to the distortion linked the 🇨🇳 New Year, however the decline is not only concentrated in #China:
#Asia -13.1%
#Europe -2.5%
#Middle East : -13.2%
#Canada : -16.3%
#Africa : -14.8%
🇯🇵 Also of note, excluding price effect, #Japan Jan. real exports ⬇ 6.8% YoY (largest contraction since Feb. 2013) v 0.0% prior.
*Link: bit.ly/2EBb8QJ
🇯🇵 Business investment in #Japan may now be fading amid anxiety over an upcoming sales tax hike and global trade frictions, a Reuters monthly corporate survey showed.
reuters.com/article/us-jap…
🇩🇪 #IMF likely to lower growth forecast for #Germany: Die Zeit - Reuters
*On 21st Jan., IMF already Cut 2019 German GDP Forecast to 1.3%
*Most economists/institutes are seeing German growth this year to be closer to 1.0%
*Link: reut.rs/2BI2UD6
Global #copper users output index nears ten-year low prompting growth worries - IHS Markit
The Global Copper Users Output Index posted at 46.8 in January (lowest since April 2009)
*Link: bit.ly/2DWdiYn
🇨🇳 #China Spaceknow Satellite #Manufacturing Index suggests that activity contracted at a faster pace in February - Bloomberg
*The index fell to 48.12 (lowest since Mart. 2016) v 49.59 in Jan.
🇯🇵 #JAPAN FEB PRELIMINARY PMI #MANUFACTURING: 48.5 V 50.3 PRIOR (1st contraction since Aug. 2016)
*New Orders (lowest since June 2016)
*Future output expectations turn ⬇ for the 1st time since Nov. 2012❗
*Link: bit.ly/2Ek4EnN
🇰🇷 #SouthKorea | Trade data for the first 20 days of Feb. showed:
*a 11.7% YoY ⬇ in total exports (vs -14.6% in Jan.)
*a 17.3% YoY ⬇ in total imports (largest ⬇ since Mar. 2016; vs -9.5% in Jan.)
*Link: bit.ly/2SiGaPI
🇰🇷 🇨🇳 #SouthKorea | Trade data for the first 20 days of Feb. showed:
*a 13.6% YoY ⬇ in exports to #China (vs -22.5% in Jan.)
*a 27.7 YoY ⬇ in semiconductor exports (vs -28.8% in Jan.)
*Link: bit.ly/2SiGaPI
Although exports figures showed a smaller decline than in Jan., it’s only explained by the normalization post Chinese New Year.
*Excluding this effect, exports remain under heavy pressure reflecting global synchronized slowdown and #tradewar.

🇦🇺 #Australia | The CBA Composite PMI moved into contraction for the first time in the life of the survey.
*The headline index fell to 49.7 (v 51.3 in Jan.) amid reports of weaker demand in services and drought conditions.
*Link: bit.ly/2T2x2TR
🇩🇪 #GERMANY FEB PRELIMINARY #MANUFACTURING PMI: 47.6 V 49.8E (lowest since Dec 2012)
*New Orders: 42.6 v 45.3 prior (lowest since Aug. 2012)
*New export orders fell to the greatest extent for over 6 years ❗
*Link: bit.ly/2V6rmp6
🇫🇷 The good surprise came from #France:

FEB PRELIMINARY #MANUFACTURING PMI: 51.4 V 51.0E (2nd straight expansion)
*Services PMI: 49.8 v 48.5e
*Link: bit.ly/2NkctN7
Maersk CEO Soren Skou said the global economic outlook for this year is looking bleaker than in 2018 - Bloomberg
Trade tensions led to a lot of front-loading in 2018; that effect is now disappearing, which means that the fallout of #trade tensions will be bigger this year ❗
🇪🇺 #EUROZONE FEB PRELIMINARY #MANUFACTURING PMI: 49.2 V 50.3E (1st contraction in 68 months)
*New export orders fell at a faster pace than in Jan.
*Services PMI: 52.3 v 51.3e (3-month high)
*Link: bit.ly/2GQN7FH
🇪🇺 #Manufacturing Markit reports show:
1/ External demand is collapsing amid synchronized global slowdown and #tradewar
2/ Domestic demand is contained due to #Brexit, political uncertainties
3/ Excl 🇫🇷 and 🇩🇪, rest of the region is suffering its worst spell since late 2013.
Global #Trade Pain Stings Export Economies From #Japan to #Germany - Bloomberg
*Link: bloom.bg/2EnWDOU
🇹🇭 #Thailand Jan Customs Exports Y/Y: -5.7% v -1.7% prior (largest contraction since July 2016)
*Exports to #China Y/Y: -16.7% v -6.8% prior
*Link: bit.ly/2tZqnL5
🇹🇼 #Taiwan Jan Export Orders Y/Y: -6.0% v -10.5% prior

*Export orders Y/Y from
🇨🇳 #China: -14.1% v -10.3% prior (largest contraction since Aug. 2015)
🇯🇵 #Japan: -2.1% v +2.6% prior
🇺🇸 US: -5.3% v +5.6% prior
🇪🇺 #Europe: -1.4% v -28.1% prior
🇩🇪 #GERMANY FEB IFO BUSINESS CLIMATE: 98.5 V 98.9E (lowest since Jan. 2015)
*CURRENT ASSESSMENT: 103.4 V 103.9E (lowest since Feb. 2017)
*Expectations Survey: 93.8 v 94.3e (lowest since Nov. 2012)
🇨🇳 A #China state-backed borrower’s failure to make good on a payment on a dollar bond on Friday threatens to overturn assumptions that officials would step in to avert defaults by companies closely linked to local authorities - Bloomberg
*Link: bloom.bg/2SnTsum
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 3% YoY in week 7.
*The index contracted 3 out of the last 4 weeks.
*Link: bit.ly/2H0q2R2
The 🇺🇸 monthly Cass Corp Freight Index also shows shipments fell 0.3% YoY in January (2nd straight decline; 1st time since Sept. 2016)
*Link: bit.ly/2Dr977H
Latest weekly figures suggest that global trade growth kept deteriorating in early 2019.
*The Harpex TEU Index is now contracting at the fastest pace since early March 2017.
*Link: bit.ly/2UzAbHN
The Baltic Dry Index also raises concerns about weakness in global trade growth.
*Link: bloom.bg/2g0FpYX
As I expected (bit.ly/2SnOeTa), CPB figures show that global trade growth (volume) contracted on a YoY basis in Dec.
*YoY: -1.4% v +0.7% prior (1st decline since Jan. 2016; largest contraction since Nov. 2009❗)
*On a MoM basis, after ⬇ by 1.8% in Nov., world trade growth (volume) ⬇ 1.7% in Dec., confirming that the momentum deteriorated sharply.
*On a YoY basis, my proxies suggest that global trade growth will keep contracting at least in Jan. and Feb.
*Link: bit.ly/2rJjz2d
It reinforces my call (bit.ly/2Re9LOD) that the consensus remains optimistic concerning 2019 Global GDP as world trade growth has collapsed.
*Most of organisations such OECD, FMI, etc. are likely to revise ⬇ their forecasts at next update.

World Trade Slowed at End of 2018 - WSJ
*Flows in the final three months of the year were 0.9% down from the previous quarter, and #China's trade with the rest of the world accounted for most of the ⬇
wsj.com/articles/world…
🇺🇸 DEC HOUSING STARTS: 1.078M V 1.256ME (lowest since Sept. 2016)
*Single-family starts ⬇ 6.7% to a two-year low while starts for multifamily homes with 5 or more units ⬇ 22% (most since Nov. 2016).
*The decline underscores the broader slowdown in housing in recent months.
🇺🇸 DEC S&P CASE-SHILLER HOUSE 20-CITY M/M: 0.19% V 0.30%E; Y/Y: 4.18% V 4.50%E (slowest pace since Sept. 2012)
*The slowdown in price increases is coherent with the ongoing rebound in existing home inventory ⬇
🇮🇹 #Italy Feb Consumer Confidence: 112.4 v 113.9 prior (lowest since Aug. 2017)
*Manufacturing Confidence: 101.7 v 102.0 prior (lowest since Aug. 2016)
*Economic Sentiment: 98.2 v 99.2 prior (lowest since Feb. 2015)
🇨🇳 #CHINA FEB OFFICIAL (NBS) #MANUFACTURING PMI: 49.2 V 49.5E (3rd consecutive contraction and lowest since Feb. 2009)
*Manufacturing output sub-index: 49.5 v 50.9 (lowest since Jan. 2009)
🇨🇳 #China #Manufactruing PMI - Most worrying is the collapse of trade indicators:
*New export orders: 45.2 v 46.9 (lowest since Feb 2009)
*Imports: 44.8 v 47.1 (lowest since Feb. 2009)
Given the latest statistics (global trade growth contracted in 4Q: bit.ly/2IJamUB), I now expect a global trade recession (at least two negative quarters).

🇨🇳 #China #Manufacturing PMIs for SMEs fell further into ⬇ territory suggesting downside risk for Caixin PMI tomorrow (more sensitive to SMEs):
*Medium Corp: 46.9 v 47.2 prior (lowest since figures have been recorded)
*Small Corp: 45.3 v 47.3 prior (lowest since Feb. 2018)
🇨🇳 #China #Manufacturing: After ⬇ for 3 mths in a row, business expectations component ⬆ 3.7pts to 56.2 (highest since Oct. 2018), suggesting that the economy may bottom in coming mths as officials have ⬆ public spending to counter downward pressure from external demand.
🇯🇵 #JAPAN JAN PRELIMINARY INDUSTRIAL PRODUCTION M/M: -3.7% V -2.5%E (3rd consecutive ⬇; largest ⬇ since Jan. 2018)
*Japan Government: Cuts assessment of industrial production, says output is 'stalling'
- Retail sales also ⬇ 2.3% MoM in Jan. (largest drop since Feb. 2016)
There is a now a good chance of 🇯🇵 GDP growth returning into negative territory in 1Q19 (that would be the third time in five quarters).

🇰🇷 #SouthKorea YoY Feb. Imports: -12.6% v -11.6%e (largest ⬇ since June 2016)
Exports: -11.1% v -9.5%e (largest ⬇ since Apr. 2016)
Exports to 🇨🇳: -17.4% v -19.2% prior
Semiconductor exports Y/Y -24.8% v -23.3% prior (largest ⬇ since Apr. 2009)
*Link: bit.ly/2tJA7tu
🇮🇳 #India’s Economy Slows as New Risks Emerge From #Pakistan - Bloomberg
*INDIA Q4 GDP Y/Y: 6.6% V 6.7%E
*GVA Y/Y: 6.3% v 6.5%e
GDP 2018/19 Annual Estimate Y/Y: 7.0% v 7.2%e
*Link: bloom.bg/2tKQrKs
🇦🇺 #Australia Property Slump Deepens as Credit Squeeze Hits Buyers - Bloomberg
*National housing prices declined 0.7% MoM, and are now down 6.8% from their peak in October 2017,
*Link: bloom.bg/2BVYPeY
🇺🇸 FEB ISM #MANUFACTURING: 54.2 V 55.8E (lowest since Nov. 2016)
*New Orders Index: 55.5 v 58.2 prior
*Production: 54.8 v 60.5 prior
*Employment: 52.3 v 55.5 prior
*Link: bit.ly/2dBZnbi
🇺🇸 It seems that auto sales will keep contracting in Feb.:

*HONDA FEBRUARY U.S. AUTO SALES DOWN 0.4%, EST. UP 0.7%
*FIAT CHRYSLER FEBRUARY U.S. AUTO SALES DOWN 2%, EST. DOWN 0.3%
*TOYOTA MOTOR REPORTS FEB. SALES DOWN 5.2%, EST DOWN 2.5%
🇺🇸 Excluding auto sales, the recent trend in retail sales is also worrying as suggested by data (Same Store Dollar Volume growth) from First Merchant Services, which showed a rise of only 0.89% YoY in Feb. (slowest pace since Mar. 2016).
🇺🇸 Auto Market Turns for Worse With Lowest Sales Rate in 18 Months - Bloomberg
*Fiat Chrysler deliveries ⬇ for the 1st time in a year
*Ford, Toyota, Honda, Nissan ⬇ short of exp
*Total New Vehicle Sales SA: -0.2% to 16.56M (lowest since Aug. 2017)
*Link: bloom.bg/2GWzvJC
🇨🇦 Starting Near-Halt to Economy Stokes Fear of #Canada Recession - Bloomberg
*GDP grew by just 0.1% in 4Q18 or 0.4% annualized
*Dec GDP M/M: -0.1% v 0.0%e; Y/Y: 1.1% v 1.4%e
*Link: bloom.bg/2NBl7ae
February Global #Manufacturing PMI: 50.6 v 50.8 prior (lowest since June 2016)
*Business optimism ⬇ to its second-lowest level in the series history.
*Confidence eased to its weakest in over 6 years in developed nations and to a 2-month low in EM.
*Link: bit.ly/2EH8J5P
Global #Manufacturing PMI: New Exports Orders ⬇ in Feb. (-0.3pt to 49.1; lowest since May 2016) and remained in contraction territory for the 6th straight month.
*As discussed (bit.ly/2TiWAMH ), a global trade recession (at least 2 negative quarters) should take place.
Feb. Global #Manufacturing PMI "Output": 50.7 v 50.8 (32-month low)
*It suggests that global production growth (ex construction) will keep weakening in the coming months.
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 1.1% YoY in week 8.
*The index contracted 4 out of the last 5 weeks.
*Link: bit.ly/2EICRgY
🇬🇧 #UK | The CBI’s index of private-sector activity over the past three months dropped to -3 in Feb. (lowest since April 2013) due to fears of a no-deal #Brexit and rising global trade barriers - Reuters
uk.reuters.com/article/us-bri…
🇰🇷 #SouthKorea Feb #Manufacturing PMI: 47.2 v 48.3 prior (lowest since June 2015)
*New export orders contract for the 7th consecutive month (⬇at the joint-fastest pace for five-and-a-half years)
*New orders 44.9 v 47.0 prior (largest ⬇ since June 2015)
markiteconomics.com/Survey/PressRe…
🇹🇼 #Taiwan Feb #Manufacturing PMI: 46.3 v 47.5 prior (lowest in 3.5 years)
*Feb. new export orders shrink at fastest rate since Nov 2011
*Link: bit.ly/2Tbnmap
February already had seen a downturn in several other critical Asian export economies. Of 10 key global trade gauges in a Bloomberg Economics dashboard, four are now below their long-run averages.
Global #Manufacturing/#Trade Update
1/ Asian export orders are usually leading the economic cycle by around 3 months and therefore suggest a pick-up in global manufacturing activity is unlikely to happen before 2H19.
2/ Focusing on US/China tariffs, it seems that people are missing the key story namely that at least two important sectors, namely autos and semi-conductors, are under heavy pressure as pent up demand has been largely absorbed and is starting to ⬇ (prices are also falling).
3/ A trade deal (US/#China) won’t improve significantly the situation in the ST especially if 🇨🇳 purchases are concentrated on agricultural and energy commodities. In addition, the problem could be amplified if Trump administration implements tariffs on cars/trucks.
🇪🇺 Sentix Expectations (6-month Ahead) survey averaged -15.6 in 1Q19 (lowest since 3Q12)
*Based on historical correlation, we are close to a level consistent with the start of a recession in the coming quarter.
*Yet, on a MoM basis, the index ⬆ to -10.3 in Mar. (4-month high)
Gloomy News Drags Economic Surprise Index to 2013 Low - Bloomberg
*Link: bloom.bg/2C1GP2Q
🇨🇳 #China Lowers Growth Target and Cuts Taxes as Economy Slows - Bloomberg
*Link: bloom.bg/2EMVLU2
🇨🇳 #China | It’s interesting to note that officials decided to avoid announcing a target for retail sales after missing last year’s goal of 10% when sales expanded only 9%.
*In addition, SpingFestival sales were disappointing (bit.ly/2SHrGNp).

🇨🇳 #CHINA FEB CAIXIN PMI SERVICES: 51.1 V 53.5E (4-month low)
- PMI Composite: 50.7 v 50.9 prior (4-month low)
*Link: bit.ly/2EN7vWN
Another sign that the #auto sector (bit.ly/2EQ2yMO) remains under pressure:

🇩🇪 Schaeffler abandoned its long-standing earnings target for 2020 and plans to cut 900 jobs as part of a restructuring program for its struggling auto-parts business
*Shares fell as much as 11%
🇨🇳 #China corporations have reneged on 14.7 billion yuan ($2.2 billion) of local bonds in the first two months this year, marking a record for the period - Bloomberg
#OECD CUTS 2019 GLOBAL ECONOMIC GROWTH FORECAST TO 3.3% VS 3.5% - BBG
*OECD DOWNGRADES 2019 OUTLOOKS FOR U.S., CHINA, U.K., EURO AREA
*OECD SEES RECESSION RISK FOR U.K. IF NO BREXIT DEAL AGREED
*Link: bit.ly/2Tlcfvq
#OECD: Global trade growth has slowed sharply and survey measures of new orders continue to ⬇ in many countries
*The trade restrictions introduced last year are a drag on growth, invest and living standards, particularly for low-income households
*p. 3: bit.ly/2TCCpJs
#OECD: Even in the absence of further trade restrictions, the slowdown in many key trading economies (Germany, China, the UK and Italy) is acting to weaken growth in their trading partners in Europe and in Asia given their importance as export markets and in regional supply chain
Since the #OECD last downgraded its forecasts in November, little has gone right for the world’s richest economies: Weakness in the euro area and #China are proving more persistent, trade growth has slowed sharply and uncertainty over #Brexit has continued - Bloomberg
🇷🇺 #Russia car sales declined for the first time in almost 2 years, Association of European Businesses says in a statement Wednesday - Bloomberg
*Russian Feb. New Car, LCV Sales -3.6% y/y
🇰🇷 🇨🇳 #Hyundai Motor plans to halt operations at its #Beijing No. 1 plant in April, in effect closing the plant, Korea Economic Daily reports, citing unidentified people.
*Link (Korean): bit.ly/2VDAfGX
🇺🇸 #Fed Downgrades View of U.S. Growth on Government Shutdown's Toll - Bloomberg
*Link: goo.gl/ZUzBiL

@JeoffHall also highlights that "incidence of the root word "weak-" rose to 34, up from 13x seven weeks ago and 19x in the October version" ❗

🇺🇸 #Fed Beige Book was somehow downbeat concerning the #semiconductor sector.
*The Boston Fed section made two interesting references to the industry:
*Link: goo.gl/7yRtNw
As I already noted, by focusing on US/#China tariffs, people are missing the key story namely #auto and #semiconductor sectors are under heavy pressure due to lack of demand.

🇺🇸 🇨🇳 🇪🇺 🇮🇳 🇨🇦 🇲🇽 The significant slowdown (and sometime collapse) in auto sales (which affects the semiconductor sector) has been seen almost everywhere in the globe (U.S., #China, #India, #Europe, #Canada ,#Russia, #Mexico, etc.).
🇺🇸 The key problem is that, for now, the sector has not been directly linked to tariffs (China already removed its duties on U.S. car imports) and could face another blow as #Trump administration will target auto industry in the coming weeks.
Stoxx 600 Automobiles & Parts Index ⬇ 1.5% as tire and car-component maker Continental cites trade disputes and weakening #China economy for slow start to 2019 and probable 2H ⬇ in global vehicle production ❗.
*Vehicle production during 1H will likely be lower than a year ago.
🇪🇺 Some #ECB policy makers consider the institution’s downgraded growth forecast for 2019 (from 1.7% to 1.1%) is still too optimistic, according to people with knowledge of the matter - Bloomberg
bloomberg.com/news/articles/…
🇨🇳 #China’s car sales ⬇ for the 9th consecutive month in February - CPCA
*Retail sales of sedans, sport utility vehicles, multipurpose vehicles and minivans ⬇18.5% YoY (v -4.0% in Jan.).
*YTD, sales ⬇ 9.6%.
🇨🇳 #China Feb Exports Y/Y: -20.7% v -5.0%e (largest decline since Feb. 2016)
*Imports Y/Y: -5.2% v -0.6%e (largest decline Dec. 2018)
*Link: bloom.bg/2EWzcN0
🇨🇳 #China | Exports in the first two months of the year combined fell 4.7% YoY, a sharp turn from an increase of 3.9% in 4Q 2018.
*Combined imports for the first two months fell 3.1%, following a rise of 4.4% in 4Q.

🇨🇳 🇺🇸 #China Feb. Exports to the U.S. Y/Y: -28.6% v -2.4% prior (largest decline since Feb. 2016)
*Imports from to the U.S. Y/Y: -26.2% v -41.2% prior

➡ Figures confirm that the drop in Chinese imports from the U.S. in January was amplified by the Chinese New Year.
🇺🇸 🇨🇳 All in all, trade between the two nations is collapsing, which reinforces my call of a global trade recession (bit.ly/2TiWAMH).

🇹🇼 #Taiwan Feb. Exports Y/Y: -8.8% v -0.7%e (largest contraction since May 2016)
*Imports Y/Y: -19.7% v 4.8%e (largest contraction since Sep. 2015)

🇹🇼 🇨🇳 *Exports to Mainland #China Y/Y: -9.1% vs -6.0% prior (4th straight contraction, largest contraction since Feb. 2018)
🇹🇼 #TAIWAN MOF SAYS 1Q EXPORTS MAY DROP MORE THAN 3% Y/Y - BBG
*TAIWAN FINANCE MINISTRY SEES MARCH EXPORTS FALLING 5%-7.5% Y/Y
*TAIWAN FINANCE MINISTRY SEES 2Q EXPORTS FARING BETTER THAN 1Q
*TAIWAN FINANCE MINISTRY SEES 1H EXPORTS DROPPING Y/Y
🇩🇪 #GERMANY JAN FACTORY ORDERS M/M: -2.6% V +0.5%E; Y/Y: -3.9% V -3.2%E
*The January drop was caused by weak demand for investment goods, particularly from outside the euro area.
Worldwide #Semiconductor sales receded 5.7% on the year to $35.5 billion in Jan. - Nikkei
*The figure, based on a three-month moving average, marks the first decline in 30 months.
*Link: s.nikkei.com/2tYpsv2
Renesas Electronics President Bunsei Kure said in February that "demand from automobiles and factory automation has dropped precipitously",

🇯🇵 🇨🇳 Renesas halts chip production at 13 plants as #China demand flags - Nikkei
asia.nikkei.com/Business/Compa…
Given the ⬇ in global #auto sales, the #semiconductor should remain under pressure in the ST.
*As I flagged (bit.ly/2EVBb42), #Trump auto tariffs could happen in a context where pent up demand has been largely absorbed and would have disastrous effect on global economy.
❗ Global Users PMI ❗
#Aluminium: 46.8 (lowest since May 2009) - bit.ly/2tTasPn
#Copper: 47.0 (lowest since May 2009) - bit.ly/2JduZsv
#Steel: 47.0 (lowest since Mar. 2009) - bit.ly/2XFMW65
*Markit: Global output of automobiles and auto parts ⬇ for the 5th straight month in Feb.
*It was the strongest ⬇ since global sector PMI data were first available in Oct. 2009.
*New orders ⬇ at the fastest pace in over 6 years.
*Link: bit.ly/2C84lLu
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 3.0% YoY in week 9.
*The index contracted 5 out of the last 6 weeks.
*Link: bit.ly/2Cc10es
Latest weekly figures suggest that global trade growth kept deteriorating in 1Q19, reinforcing my call of a global trade recession (bit.ly/2TiWAMH)
*The Harpex TEU Index is now contracting at the fastest pace since March 2017.
*Link: bit.ly/2UzAbHN
The Baltic Dry Index also raises concerns about weakness in global trade growth.
*Link: bloom.bg/2g0FpYX
🇩🇪 #GERMANY GOVERNMENT EXPECTS GDP GROWTH OF 0.8% IN 2019: HB
🇨🇳 #CHINA FEB. VEHICLE WHOLESALES 1.48M UNITS: CAAM - BBG
*CHINA FEB. VEHICLE WHOLESALES -13.8% ON YEAR (V -15.8% PRIOR)
*CHINA FEB. PASSENGER VEHICLE WHOLESALES 1.22M UNITS
*CHINA FEB. PASSENGER VEHICLE WHOLESALES -17.4% ON YEAR (V -17.7% PRIOR)
🇹🇷 #Turkey Enters First Recession in a Decade as Elections Loom - Bloomberg
*Q4 GDP Q/Q: -3.0% v -2.4%e; Y/Y: -2.4% v -2.5%e
*Link: bloom.bg/2HqWhJ8
🇰🇷 #SouthKorea March 1-10 YoY (one less working day this year❗):
*Exports: -19.1% v -11.1% in Feb.
*Exports to #China: -23.9% v -17.4% in Feb.
*Semiconductor Exports: -29.7% v -24.8 in Feb.
*Link: bit.ly/2SiGaPI

🇨🇳 #China Feb. Mobile Phone Shipments ⬇ 19.9% Y/Y (largest ⬇ since Aug. 2018; vs -12.8% prior) - CAICT
*Mobile phone shipments fell to 14.5m units in Feb.
*Link (Chinese): bit.ly/2F9uE65
🇨🇳 #CHINA FEB INDUSTRIAL PRODUCTION YTD Y/Y: 5.3% V 5.6%E (17-yr low)
*Auto output ⬇ 5.3% in the first two months of the year, down from a 4.1% ⬇ in Dec. 2018.
*The manufacture of mobile phones ⬇ 12.3% YoY YTD, down from a 9.4% ⬇ in Dec. 2018.
🇨🇳 #China production by foreign funded companies ⬇ 0.3% YoY YTD in Feb. (1st YoY YTD decline since May 2009❗), down from +4.8% for the full year of 2018.

➡ This is a signal that foreign companies are relocating their factories elsewhere (amid #tariffs and high competition).
🇨🇳 #China | By contrast, production by state-owned enterprises accelerated to +4.4% YoY YTD in Feb (vs +3.6% in Dec.) which confirms public support (mainly through infrastructure spending):
#Steel product and metal industries still posted strong growth at 10.7% and 8.5%.
🇨🇳 #China | The increase in FAI YoY YTD to +6.1% in Feb. also reflects policy efforts with State Owned & State Holdings FAI increasing by 5.5% (fastest pace since Apr. 2018). Meantime, growth in private FAI slowed to +7.5% (slowest pace since Dec. 2017).
🇨🇳 #China | Bottom line, even if there are signs that public support has gained traction since several months, the impact on overall activity still looks limited. Given the UR also rose sharply (+0.4ppt), it would probably prompt more policy support in the ST.
🇪🇺 EU27 Feb New Car Registrations Y/Y -1.0% v -4.6% prior (6th straight decline)
🇮🇩#Indonesia Feb Exports Y/Y: -11.3% v -4.3% prior (4th straight contraction; largest decline since June 2017)
*Imports Y/Y -14.0% v -2.1% prior (2nd straight contraction; largest decline since June 2017)
🇺🇸 MAR EMPIRE MANUFACTURING: 3.7 V 10.0E (lowest since May 2017)
*New Orders: 3.0 v 7.5 prior (lowest since May 2017)
*Link: nyfed.org/1MhJOln
🇮🇳 #India Feb Exports Y/Y: +2.4% v +3.7% prior
*Imports Y/Y: -5.4% v 0.0% prior (largest decline since Aug. 2016)

➡ Another sign that Asian demand remains under pressure.
🇭🇰 #HongKong Air Transport Movements (Freight) fell 14.6% YoY in Feb. (largest contraction since Feb. 2016) v -4.0% YoY in Jan.
*The index contracts for a 4th straight month (1st time since Aug. 2015).
*Link: bit.ly/2SvU16q
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 4.7% YoY in week 10.
*The index contracted 6 out of the last 7 weeks.
*Link: bit.ly/2TQ7CZN
Latest weekly figures suggest that global trade growth kept deteriorating in 1Q19, reinforcing my call of a global trade recession (bit.ly/2TiWAMH )
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since March 2017.
*Link: bit.ly/2UzAbHN
After seasonal adjustment, the Baltic Dry Index also raises concerns about weakness in global trade growth (stabilizing around -40% YoY)
🇯🇵 #Japan Exports YoY: -1.2% v -0.6%e (3rd straight ⬇)
*Semiconductor: -15.3% v -17.9% prior
*Motor Vehicles: 0.0% v +7.9% prior
*Real exports ⬇ for the 2nd straight month (1st time since Apr. 2016).
*Imports: YoY: -6.7% v -6.4%e (2nd straight ⬇; largest ⬇ since Nov. 2016)
🇨🇳 *LEONI CEO: SADDENED AND FRUSTRATED ABOUT PROFIT WARNING - BBG
*KAMPER: #CHINA ORDER VOLUME SHOWED UNEXPECTED REDUCTION
🇩🇪 🇨🇳 Leoni AG slumped after the German automotive supplier of electric cables and wires said it will eliminate as many as 2,000 jobs and miss 2019 guidance because of weakening markets.
*The shares declined as much as 20%.
One of the argument behind my early call of a "global trade recession" was 🇺🇸🇨🇳 frontloading in late 2018.
*The underlying trend is still weaker than the consensus expects and the 1Q ⬇ will be amplified by ⬇ normalization effect.
*CPB data show global trade growth ⬇ 0.9% in 4Q
The 🇺🇸 monthly Cass Corp Freight Index shows shipments fell 2.1% YoY in February (3rd straight decline; 1st time since Sept. 2016)
*Link: bit.ly/2OfBZDH
CASS Report: Asian airfreight volumes were essentially flat from June to October 2018 but have since deteriorated at an accelerating pace (November -3.5%, December -6.1%, January – 5.2%, February -13.6%❗).
*Link: bit.ly/2OfBZDH
Capex at 2,137 Asian companies is likely to slip an average 4% this year - Reuters analysis (citing Refinitiv data)
*Capex at the same firms grew nearly 8% last year.
*Link: reut.rs/2OcpJE6
🇩🇪 The German Council of Economic Experts is cutting its growth forecast for 2019 and now expects German GDP to grow by 0.8 % and 1.7 % in 2019 and 2020, respectively.
*Link: bit.ly/2uiurH6
FedEx Corp. tumbled overnight after cutting its annual profit forecast for the second time in three months on slowing global growth ❗ and rising costs from a 2016 acquisition in Europe - Bloomberg
bloomberg.com/news/articles/…
🇨🇳 Nissan Cuts China Sales Outlook as #Car Market Sputters - Bloomberg
*Dongfeng joint venture said to cut 2022 target by 8%, signaling that the downturn in the world’s biggest car market may be an extended one.
bloomberg.com/news/articles/…
🇰🇷 Samsung says uncertainty in business environment is increasing and its part business will face difficulties due to smartphone market slowdown and reduced investment by data centers - Bloomberg
🇩🇪 *BMW SEES 2019 PRETAX PROFIT DOWN MORE THAN 10% VS 2018 - BBG
*BMW CAN'T RULE OUT GUIDANCE CHANGE IF CONDITIONS WORSEN: CFO
As I noted (bit.ly/2EVBb42; bit.ly/2EQ2yMO), people are missing the key story in global trade.
-Latest data related to #semiconductors confirms that sales are under pressure amid:
*a ⬇ in crypto, smartphone, servers and auto sales❗ + Intel CPU shortages
🇰🇷 #SouthKorea March 1-20 YoY:
*Exports: -4.9% v -11.1% in Feb.
*Exports to #China: -12.6% v -17.4% in Feb.
*Semiconductor Exports: -25.0% ❗v -24.8 in Feb.
*Link: bit.ly/2SiGaPI
🇦🇷 #Argentine Economy Shrinks the Most Since Global Financial Crisis - Bloomberg
*Link: bloom.bg/2YgsaKj
🇯🇵 #JAPAN MAR PRELIMINARY PMI #MANUFACTURING 48.9 V 48.9 prior (2nd straight contraction)
*Ouput ⬇ at the fastest pace since May 2016
*New Orders ⬇ at sharpest rate since June 2016.
*Export orders showed the fastest decline since Jan. 2019
*Link: bit.ly/2HyHg9d
🇩🇪 #GERMANY MAR PRELIMINARY #MANUFACTURING PMI: 44.7 V 48.0E; (3rd straight ⬇; 79-month low)
*New Orders: 40.1 v 42.5 prior (6th straight ⬇and lowest since Apr. 2009), driven by the fastest ⬇ in new export work for nearly 3 years
*Link: bit.ly/2Totyab
🇪🇺 #EUROZONE MAR PRELIMINARY #MANUFACTURING PMI: 47.6 V 49.5E (2nd straight contraction, 71-month low)
*The ⬇ in new #manufacturing export orders was the largest since Aug. 2012 ❗
*New exports of goods and services fell for a sixth straight month
*Link: bit.ly/2uuRwa1
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 6.8% YoY in week 11 (largest ⬇ since early Feb.).
*The index contracted 7 out of the last 8 weeks.
*Link: bit.ly/2U4kVG7
🇹🇼 #Taiwan Feb. Export Orders Y/Y: -10.9% v -6.0% prior (largest contraction since Apr. 2016)

*Export orders Y/Y from:
🇨🇳 #China: -14.3% v -14.1% prior (largest contraction since Aug. 2015)
🇺🇸 US: -5.5% v +5.3% prior
🇪🇺 #Europe: -18.8% v -1.4% prior
Latest weekly figures suggest that global trade growth kept deteriorating in 1Q19, reinforcing my call of a global trade recession (bit.ly/2TiWAMH)
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since Feb. 2017.
*Link: bit.ly/2UzAbHN
After seasonal adjustment, the Baltic Dry Index also raises concerns about weakness in global trade growth (stabilizing slightly below -40% YoY)
🇩🇪 #GERMANY APR GFK CONSUMER CONFIDENCE 10.4 V 10.8E (lowest since Dec. 2018)
- Prior revised lower from 10.8 to 10.7
🇰🇷Samsung said first-quarter results will fall short of estimates as prices for memory chips and displays fell more than expected, just days ahead of releasing preliminary earnings - Bloomberg
bloomberg.com/news/articles/…
🇰🇷 Samsung Profit Warning Is Tech's Inverted Yield Curve - Bloomberg
*A downturn sparked by excess inventories and weakened demand, signs of which were evident back in August, could drag on longer than expected.
*Link: bloom.bg/2Ylv1lj
🇨🇳 #China stocks rally on investor optimism, but corporate earnings lag - Reuters
*Link: reut.rs/2uuHq8Z
*Chart link: tmsnrt.rs/2Uf8MhG
🇨🇳 #China JAN.-FEB. INDUSTRIAL PROFITS YTD Y/Y: -14.0% V -1.9% PRIOR
*Industrial enterprises of all types of ownership registered declines in profits.
*Manufacturers of motor vehicles experienced a 42% ⬇ in profits (vs -4.7% prior)
*Link: bloom.bg/2U0lcLj
RWI/ISL Container Index fell 0.4% YoY in Feb. (1st ⬇ since Jan. 2016), down from +3.4% YoY in Jan.
*On a MoM, the index ⬇ 3.1% (the 4th largest ⬇ observed so far)
*Link: bit.ly/2FCRmDR

*It reinforces my call of a global trade recession (bit.ly/2TiWAMH)
🇩🇪 *INFINEON TECHNOLOGIES MACROECONOMIC WOES WEIGH ON BUSINESS - BBG
*INFINEON ADJUSTING OUTLOOK FOR '19 IN VIEW OF UNCERTAINTIES
*INFINEON FALLS 7% ON XETRA; ADJUSTS OUTLOOK AMID UNCERTAINTIES
🇩🇪 *OSRAM TO LOWER FORECAST FOR FY 2019 - BBG
*OSRAM 2Q OF FY '19 EXPECTED TO SEE REV DECLINE OF ROUGHLY 15%
*OSRAM SEES 2019 REVENUE DECLINE 11%-14%, SAW 0%-3% GROWTH
Another example that the #auto sector is likely to remain under heavy pressure in the short term.
*The lack of demand in this sector is a key factor behind the ongoing “Global Trade Recession” (bit.ly/2EVBb42 ; bit.ly/2TiWAMH)

CPB figures show global trade growth (volume) stabilized on a YoY basis in Jan. (vs -1.8% prior)
- The rebound of 2.3% MoM was expected amid the shift in calendar dates of the 🇨🇳 New Year, which boosted Asian trade:
*Import: +8.7%
*Exports: +3.7%
*Link: bit.ly/2U1uZRc
As suggested by leading indicators, containers volume and regional surveys (bit.ly/2WvDUXH; bit.ly/2JODkDf; bit.ly/2U2pv8U; bit.ly/2FIiwcv), a counter (negative) reaction is expected in Feb.

🇨🇳🇬🇧🇪🇺 From #Brexit to #China: Mapping #Trade Risk Exposure - Bloomberg
*Link: bloom.bg/2YzFNV8
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 4.5% YoY in week 12.
*The index contracted 8 out of the last 9 weeks.
*Link: bit.ly/2V4r2Yk
Latest weekly figures suggest that global trade growth kept deteriorating in 1Q19, reinforcing my call of a global trade recession (bit.ly/2TiWAMH )
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since Feb. 2017.
*Link: bit.ly/2UzAbHN
After seasonal adjustment, the Baltic Dry Index also raises concerns about weakness in global trade growth (after having bottomed slightly below -40% YoY)
🇰🇷 #SOUTHKOREA Mar Imports Y/Y: -6.7% v -5.3%e (3rd straight ⬇)
*Exports Y/Y: -8.2% v -7.0%e (4th straight ⬇)
*Chip exports Y/Y: -16.6% v 24.8% prior (4th straight ⬇)
*Exports to #China Y/Y: -15.5% v -17.3% prior (5th straight ⬇)
*Link: bit.ly/2UmVy2u
🇰🇷 #SouthKorea | Recovery in the critical #semiconductor sector could be slower than previously expected and the Bank of Korea is watching warily, Governor Lee Ju-yeol said, citing industry experts - Bloomberg
🇯🇵 #Japan Manufacturer Sentiment Sinks Most in Six Years - Bloomberg
*Link: bloom.bg/2WAN1X9
🇩🇪 and 🇮🇹 March #Manufacturing PMI underperformed reflecting their relatively high share of exports in GDP.

#Germany: 44.1 v 47.6 prior (lowest since July 2012) - bit.ly/2HRyxiw
#Italy: 47.4 v 47.7 prior (lowest since May 2013) - bit.ly/2YO9bHA
Global #Manufacturing PMI: New Exports Orders fell in Mar. (-0.1pt to 48.9; lowest since May 2016) and remained in contraction territory for the 7th straight month.
*Link: bit.ly/2I3bXCN
March Global #Manufacturing PMI "Output": 50.5 v 50.6 (33-month low)
*It suggests that global production growth (ex construction) will keep weakening in the coming months.
*Link: bit.ly/2I3bXCN
🇲🇴 #Macau Mar #Gaming Rev (MOP) 25.8B v 25.4B prior; Y/Y: -0.4% v +4.4% prior
*YTD YoY: -0.5% v -0.5% prior
*Link: bit.ly/2HIG0B3
Taking into account results from #Mexico and #India (which were released too late), Global #Manufacturing PMI for March probably ⬇ again.

🇮🇳 (3.3%) | 52.6 v 54.3 prior - bit.ly/2YH7FXE
🇲🇽 (1.6%) | 49.8 v 52.6 prior - bit.ly/2VcfEtD

🇩🇪 #Germany new car registrations fell by 0.5 percent in March: source - Reuters
*New car registrations had risen by 0.2 percent to 880,000 during 1Q.
*Official registrations data from Germany’s car authority KBA are due to be released on Wednesday.
uk.reuters.com/article/uk-ger…
World merchandise trade growth will slow to 2.6% this year and 3% next year, after notching 3% in 2018, the WTO said - Bloomberg
*In September, the WTO said #trade would increase by 3.9% in 2018 and 3.7% in 2019.
*Link: bloom.bg/2I50qmw
Global trade growth loses momentum as trade tensions persist - WTO
*Link: bit.ly/2FOwsjF

➡ As I already said 4 months ago (bit.ly/2HV9Bq9), global trade growth (in volume) can't reach 3% this year.
Lagarde Says Global Economy Has Lost Momentum Since January - Bloomberg
*World economy has weakened since IMF’s last forecast
*The fund will release its new World Economic Outlook with an updated growth forecast on April 9.
bloom.bg/2IdmawH
Growth Outlooks for India and Southeast Asia Cut by Asian Development Bank - Bloomberg
*Link: bloom.bg/2FOWGTe
🇩🇪 #GERMANY FEB FACTORY ORDERS M/M: -4.2% V 0.3%E (largest ⬇ since Jan. 2017); Y/Y: -8.4% V -3.1%E (largest decline since Sept. 2009)
#Manufacturing Foreign Orders M/M: -6.0%; Y/Y: -12.6%
*Link: bit.ly/2FSZxuj
🇲🇾 #Malaysia Feb. Exports Y/Y: -5.3% v 2.3%e (largest ⬇ since Oct. 2016)
*Exports to #China Y/Y -1.6% v +9.1% prior
*Imports Y/Y: -9.4% v 0.9%e (largest ⬇ since Mar. 2018)
🇨🇳 *MICHELIN CFO SEES #CHINA NEW CAR SALES DECLINING AGAIN IN MARCH - BBG
*MICHELIN CFO EXPECTS IMPROVEMENT IN CHINA NEW CAR SALES IN 2H
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 4.6% YoY in week 13.
*The index contracted 9 out of the last 10 weeks.
*Link: bit.ly/2UxenjP
Latest weekly figures suggest that global trade growth remained depressed.
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since Feb. 2017.
*Link: bit.ly/2UzAbHN
On the positive side, after seasonal adjustment, the Baltic Dry Index suggests that downward pressures are easing.
*Global Users PMI suggest less downward pressures in March.
#Aluminium: 49.4 (4-month high) - bit.ly/2YXafbW
#Copper: 49.2 (4-month high) - bit.ly/2OXNLTW
#Steel: 49.3 (4-month high) - bit.ly/2YXafbW
🇩🇪 Weak (February) trade data casts doubt on #Germany's economic strength - Reuters
*Exports M/M: -1.3% v -0.5%e (largest ⬇ since Feb. 2018)
*Imports M/M: -1.6% v -0.6%e (largest ⬇ since Aug. 2018)
uk.reuters.com/article/uk-ger…
#Asia growth outlook lowered as #tradewar impact spreads - JCER
bit.ly/2IrhpiO
Changes in Anticipated Risks for Asian Economies in the Coming 12 Months - JCER
*Link (p. 7): bit.ly/2IrhpiO
🇨🇳 #CHINA MARCH RETAIL PASSENGER VEHICLE SALES 1.78M UNITS - BBG
*CHINA MARCH RETAIL PASSENGER VEHICLE SALES -12% ON YEAR: PCA
*CHINA CAR SALES FALL FOR 10TH STRAIGHT MONTH, PCA SAYS
#IMF LOWERS 2019 WORLD OUTLOOK TO 3.3% FROM 3.5% EST. IN JANUARY
*IMF: RISKS SKEWED TO DOWNSIDE FROM #BREXIT, U.S.-#CHINA TALKS
*IMF RAISES #CHINA 2019 GROWTH FORECAST BY 0.1PPT TO 6.3%
*Link: bit.ly/2D12ys8
The world economy will grow 3.3% this year, down from the 3.5%, the #IMF had forecast for 2019 in January -- the weakest since 2009 - Bloomberg
🇨🇳 #China March Mobile #Phone Shipments ⬇ 6% YoY (vs -19.9% YoY prior) - CAICT
*Mobile phone shipments fell to 28.4m units in Mar.
*Link: bit.ly/2U6eQ8m
🇯🇵 🇨🇳 🇺🇸 *YASKAWA ELECTRIC SEES FY OPER INCOME 46.5B YEN, EST. 48.69B YEN - BBG
*YASKAWA CITES 2H ORDERS FOR FORECASTED DROP IN SALES, PROFIT
*YASKAWA: FY18 PROFIT DROPPED ON IMPACT OF U.S.-#CHINA #TRADEWAR
🇩🇪 #Germany government is expected to halve its economic growth forecast for 2019 to 0.5% ❗ from 1.0% due to weaker exports in the wake of global trade tensions, the news magazine Der Spiegel reported late on Thursday - Reuters
uk.reuters.com/article/uk-ger…
🇩🇪 #GERMANY GOVT SOURCE SAYS GOVT WILL VERY LIKELY CUT 2019 GROWTH FORECAST TO 0.5 PCT NEXT WEEK (FROM PVS FORECAST OF 1.0 PCT) - RTRS

➡ It confirms Spiegel report:

The 🇺🇸 monthly Cass Corp Freight Index shows shipments fell 1.0% YoY in March (4th straight decline; 1st time since Sept. 2016)
*Link: bit.ly/2KvBE1G
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 2.8% YoY in week 14.
*The index contracted 10 out of the last 11 weeks.
*Link: bit.ly/2UhGv66
#Trade rows cloud global economy as officials fret over slowdown - Reuters
reuters.com/article/us-imf…
🇰🇷 #SouthKorea April 1-10 YoY (one more working day this year❗):
*Exports: +8.9% v -8.2% in Mar.
*Exports to #China: +0.8% v -15.5% in Mar.
*Semiconductor Exports: -19.7% v -16.6% in Mar.
*Link: bit.ly/2SiGaPI

🇰🇷 The customs office said daily average exports (which reflect working days) ⬇ 3.9% YoY to $1.77 billion.
*On the positive side, the decline is less pronounced than earlier this year, however, the semiconductor industry remains undr heavy pressure.

🇪🇺 #Europe’s Car Market Is Getting Even Worse - Bloomberg
*Registrations fall for 7th straight month with 3.6% downturn
*Link: bloom.bg/2Gjhpiw
🇸🇬 #SINGAPORE MAR NON-#OIL DOMESTIC EXPORTS Y/Y: -11.7% V -2.2%E (largest ⬇since Oct. 2016)
*#Electronic Exports Y/Y: -26.7% v -8.2% prior (largest ⬇ since Feb. 2013)
🇯🇵#JAPAN Mar. Imports Y/Y: 1.1% v +2.8%e (fastest growth since Dec. 2018)
*Exports Y/Y: -2.4% v -2.6%e (4th consecutive ⬇; largest ⬇ since Jan. 2019)
*Exports to #China Y/Y: -9.4% v +5.6% prior (largest ⬇ since Jan. 2019)
*Link: bit.ly/13OjAW7
🇯🇵 #Japan manufacturers’ business confidence slipped to a 2-1/2-year low in April, a Reuters poll showed on Thursday, underlining growing concerns the economy could slip into a recession in the face of slowing external demand - Reuters
reuters.com/article/us-jap…
🇯🇵 #JAPAN APR PRELIMINARY PMI #MANUFACTURING 49.5 V 49.2 PRIOR (3rd straight contraction)
*Export orders dipped at a stronger rate in April.
*Link: bit.ly/2DhQ8w4
🇩🇪 #GERMANY APR PREL PMI #MANUFACTURING: 44.5 V 45.0E (4th straight contraction)
*The ⬇ in mfg order books was led by a further steep ⬇ in new export orders, which ⬇ at the second-fastest rate in the past 10 years.
*PMI Services: 55.6 v 55.0e
*Link: bit.ly/2ICaaom
🇩🇪 #German economy is now forecast to expand just 0.5% this year, which -- based on the European Commission’s February outlook -- would make it the bloc’s worst performer, bar Italy, which is stagnating - Bloomberg
🇪🇺 #EUROZONE APR PRELIMINARY PMI #MANUFACTURING: 47.8 V 48.0E (3rd straight contraction)
*PMI Services: 52.5 v 53.1e (3-month low)
*PMI Composite: 51.3 v 51.8e (3-month low)
*New export orders ⬇ sharply, down for a 7th straight month.
*Link: bit.ly/2V2fqZj
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 1.2% YoY in week 15.
*The index contracted 11 out of the last 12 weeks.
*Link: bit.ly/2KPEqPv
Latest weekly figures suggest that downward pressures on global trade growth are easing.
*After seasonal adjustment, the Harpex TEU Index ⬇ at a slower pace this week.
*Link: bit.ly/2UzAbHN
Since several weeks, the same pattern has been observed for the Baltic Dry Index.
🇰🇷 #SouthKorea April 1-20 YoY (0.5 more working day this year❗):
*Exports: -8.7% v -8.2% in Mar.
*Exports to #China: -12.1% v -15.5% in Mar.
*Semiconductor Exports: -24.7% v -16.6% in Mar.
*Link: bit.ly/2Ds6nGZ
🇰🇷 #SouthKorea | The customs office said daily average exports (which reflect working days) ⬇ 11.5% YoY to $1.8 billion.
*The semiconductor exports are on track to decline by the most since April 2009.

🇹🇭 #Thailand Mar Exports YoY: -4.9% v -3.3%e (largest decline since Jan. 2019)
*Imports YoY: -7.6% v -2.3%e

*The impact of the U.S.-#China #tradewar remains the key factor, Pimchanok Vonkorpon, the ministry’s director general of trade policy and strategy, said in a briefing.
🇹🇼 #Taiwan Mar Export Orders YoY: -9.0% v -5.0%e
*Export orders from #China (Mainland & HK) Y/Y: -13.7% v -14.3% prior
There were 3,200 vessels of a combined 81 million gross tons ordered globally in the first quarter, the lowest figure since 2004 - WSJ (citing marine data provider Clarksons PLC)
wsj.com/articles/ship-…
🇰🇷 Another headwind for the semiconductor industry (bit.ly/2GAjZSl):

Samsung Delays Launch of Galaxy Fold After Screen Failures - Bloomberg
bloomberg.com/news/articles/…
Earnings from Caterpillar Inc., a bellwether for the world economy, may receive more than the normal level of scrutiny - Bloomberg
*Link: bit.ly/2UNT0LX
Billings among North American manufacturers of #semiconductor production equipment posted a decline of 24.6% YoY in March at US$1.824 billion (three-month average basis)
*Link: bit.ly/2GtJPpX
🇪🇺 🇩🇪 🇫🇷 Worsening (#manufacturing) Mood in #Germany, #France Damps Euro-Area Rebound Hopes - Bloomberg
*Link: bloom.bg/2L0UWMB

*Note: At the opposite, services activity remained resilient.
🇯🇵 #Japan | Industrial output in January-March tumbled 2.6%, the biggest decline since April-June 2014.
*That followed a 1.4% expansion in the previous quarter.
*On a monthly basis, output fell 0.9% in March.
reuters.com/article/us-jap…
🇯🇵 As I already flagged in Feb. (bit.ly/2UV7tWu), there is a good chance of #Japan GDP growth returning into negative territory in 1Q19 (that would be the third time in five quarters).
The world’s second-largest semiconductor maker, #Intel, predicted its data-center group, which provides the chips that are at the heart of almost all server computers, will post a revenue decline in 2019, its first drop in a decade.
bloomberg.com/news/articles/…
It reinforces my view that by focusing on US/China tariffs, investors missed the key story namely that auto and semi-conductor industries, have been under heavy pressure as pent up demand has been largely absorbed and started dropping.

It reinforces my view that global trade growth will remain a drag on global GDP this year.

Latest trade figures in volume (for February) also validate my forecast of a “Global Trade Recession” (bit.ly/2TiWAMH)
*Link: bloom.bg/2vpj1lM
In detail, CPB data (bit.ly/2rJjz2d) showed that, in Feb., global trade growth (in volume):
⬇ 1.7% MoM
⬇ 1.0% YoY
⬇ 1.9% in the 3 months through Feb. compared with the previous 3 months (largest drop since the period through May 2009).
If there is no revision, global trade growth (volume) will have to rebound by ~3.1% MoM in March in order to avoid a recession (which looks very unlikely).

*As a reminder, global trade growth already fell 0.9% in 4Q18.

🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 2.4% YoY in week 16.
*The index contracted 12 out of the last 13 weeks.
*Link: bit.ly/2VocmqD
Latest weekly figures keep showing that downward pressures on global trade growth are easing.
*After seasonal adjustment, the Harpex TEU Index ⬇ at a slower pace this week.
*Link: bit.ly/2UzAbHN
Since several weeks, the same pattern has been observed for the Baltic Dry Index.
🇲🇴 #Macau Apr Gaming Rev (MOP) 23.6B v 23.8Be v 25.8B prior; Y/Y: -8.3% v -0.4% prior (largest decline since June 2016)
*YTD YoY: -2.4% v -0.5% prior
*Link: bit.ly/2HIG0B3
🇰🇷 #SouthKorea Exports Y/Y: -2.0% v -8.2% prior (5th consecutive ⬇, lowest ⬇ since Dec. 2018)
- Exports to #China Y/Y: -4.5% v -15.5% prior (6th straight ⬇)
- Chip exports Y/Y: -13.5% v -16.6% prior (5th straight ⬇)
*Link (Korean): bit.ly/2URejHt
🇰🇷 *When chip-related factors are excluded, #SouthKorea's exports for Apr. moved up 0.8% YoY.

*However, the customs office said daily average exports (which reflect working days) ⬇ 6.1% YoY in Apr. (vs -4.1% YoY prior)

*Link: bit.ly/2VCPdAD
🇨🇦 #Canada Apr #Manufacturing PMI: 49.7 v 50.5 prior (lowest since Feb. 2016)
*Export orders have now decreased in four of the past five months.
*Link: bit.ly/2UNj5G4
🇪🇺 #EUROZONE APR FINAL #MANUFACTURING PMI: 47.9 V 47.8E (confirms 3rd straight contraction)
*#Germany continues to lead downturn with negative spillover on #Austria.
*Link: bit.ly/2GTAojK
April Global #Manufacturing PMI: 50.3 v 50.5 prior (lowest since June 2016)
*Business optimism dipped slightly and remained among the weakest signalled since data on sentiment were first compiled in July 2012 (fourth-lowest overall).
*Link: bit.ly/2Jb0EZI
Global #Manufacturing PMI: New Exports Orders rebounded in Apr. (+0.1pt to 49.0) but remained in contraction territory for the 8th straight month.
*Decreases were seen in 🇨🇳, 🇪🇺, 🇧🇷, 🇬🇧, 🇹🇼, 🇰🇷, 🇹🇷, 🇵🇭, 🇨🇦, 🇲🇽, 🇦🇺, 🇵🇱 and 🇨🇿.
Global #Manufacturing PMI "Output" also rebounded in Apr. (+0.2pt to 50.5)
*Global production growth (ex construction) YoY will remain subdued in 2Q19.
*Link: bit.ly/2Jb0EZI
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 3.3% YoY in week 17.
*The index contracted 13 out of the last 14 weeks.
*Link: bit.ly/2Wt9lCI
Latest weekly figures keep showing that downward pressures on global trade growth are easing.
*After seasonal adjustment, the Harpex TEU Index ⬇ at the slowest pace since 5 weeks.
*Link: bit.ly/2UzAbHN
Since several weeks, the same pattern has been observed for the Baltic Dry Index.
🇨🇳 #China’s Canton Fair sees drop in orders and visitors as US #tradewar bites - SCMP
*Export orders totalled US$29.6 billion, down 1.1% from the same period last year and a 0.9% decline from the previous fair in November
scmp.com/economy/global…
🇩🇪 #GERMANY MAR FACTORY ORDERS M/M: 0.6% V 1.4%E; Y/Y: -6.0% V -5.4%E
- Prior MoM revised higher from -4.2% to -4.0%
- Prior YoY revised higher from -8.4% to -8.1%
🇹🇼 #Taiwan Apr Exports YoY: -3.3% v -3.1%e (lowest decline since Jan. 2019)
*Exports to #China YoY: -6.4% vs -19.1% prior (lowest decline since Jan. 2019)

➡ TAIWAN MOF SEES APRIL EXPORTS BETWEEN -0.5% AND +2.5% Y/Y
🇹🇼 #TAIWAN FINANCE MINISTRY SEES MAY EXPORTS FALLING 3.5% TO 6% Y/Y - BBG
🇪🇺 🇩🇪 *EU TRIMS 2019 EURO-AREA GDP FORECAST TO 1.2% VS 1.3% - BBG
*EU CUTS GERMAN GDP FORECAST TO 0.5%, WARNS OF EURO-AREA RISKS
*Link: bit.ly/2VlUMUW
#Steel #Copper #Aluminium | Markit April Global Metal Users PMIs confirmed further deterioration at manufacturers in Q219.

Apr. Global Transportation Business Activity Index at 34-month low - Markit

"Automobiles & Auto Parts" sector remained the worst performer
*Output ⬇ for the 7th straight month while New orders ⬇ at the sharpest rate since the series began ❗

*Link: bit.ly/2vOL3XQ
In the meantime, the semiconductor industry is still not sending good signals:

Intel said revenue growth for the next three years will be at a percentage in the low single digits, with its main personal-computer chip business flat to slightly down.
*Link: bloom.bg/2H94nVe
🇩🇪 Continental AG fell after the German car parts-maker said automotive returns declined significantly during the first quarter amid a drop in global vehicle production.
marketwatch.com/story/continen…
🇨🇳 #China | The monthly expansion in aggregate social financing (ASF) was T1.36CNY (v T2.86CNY prior)
*The stock of ASF ⬆ 10.4% YoY (v +10.7% YoY prior)

New yuan loans fell to T1.02CNY (v T1.69CNY prior)
*The stock of yuan loan ⬆ 13.5% YoY (v +13.7% YoY prior)
🇨🇳 #China M1 money supply (usually a leading indicators) ⬆ 2.9% YoY in April vs +4.6% YoY prior
*Real M1 ⬆ 0.4% YoY v +2.3% YoY prior.
🇨🇳 #China | It's very interesting to note that there is still a significant divergence between real M1 and ST rates.

As @TeddyVallee mentioned, this is likely due to "large scale deleveraging in off balance sheet products and non-bank fin. institutions"

🇨🇳 #China | Looking at April report:

*Undiscounted Bankers Acceptances ⬇ CNY35.7B (v +CNY136.5B in March)

*Entrusted loans ⬇ CNY119.9B (v -CNY107B in March)

*Trust loans ⬆ CNY12.9B (v +CNY52.8B in March)
🇨🇳 #CHINA APRIL RETAIL PASSENGER VEHICLE SALES -16.6% ON YEAR: PCA - BBG
*CHINA CAR SALES FALL FOR 11TH STRAIGHT MONTH, PCA SAYS
🇨🇳 #China | That's a very bad figure in a context where the government started to support sales (bit.ly/2Ykbktu) and automakers implemented large discounts on Apr. 1 (following VAT cut)

🇺🇸 🇨🇳 The threat will probably cause another significant distortion of global trade (volume) with a potential spike in May (frontloading) and then a sharp drop (similar to the situation we experienced in Nov./Dec.)

🇺🇸 🇨🇳 In the short term, it would lead investors/economists to keep overstating the health of global trade growth (as it has been constantly the case since June 2018)
🇺🇸 🇨🇳 Once again, tariffs could attract attention while downward pressures coming from weak demand in auto and semi-conductor industries are hitting global economy.

🇺🇸 Technically, it could boost 2Q19 GDP through the "change in inventories" component (as it has been the case since 3Q18)
*It would reinforce positive base effect for 2019 (after a strong 1Q19 headline)
🇺🇸 Therefore, a ⬇ normalization of inventories (likely from 2H19) would have limited effect on 2019 GDP but would create downside risk for 2020.
*In the meantime, real final demand could suffer from a rise in global uncertainty (after growing at the weakest rate since 2Q13).
🇺🇸 🇨🇳 🇯🇵 🇪🇺 🇬🇧 As a matter of fact, trade tensions linked to U.S./China, U.S./Japan, U.S./Europe, global auto sector (Trump’s decision by May 18) and political frictions (U.S. Congress, EU parliament elections, Brexit, etc.) could lead to a peak of global uncertainty in May.
🇺🇸 AAR (Association of American Railroads) reported that the overall rail traffic volumes for US rail carriers fell 2.0% YoY in week 18.
*The index contracted 14 out of the last 15 weeks.
*Link: bit.ly/2Q1U0qb
Latest weekly figures showed that downward pressures on global trade growth are no longer easing.
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since 3 weeks.
*Link: bit.ly/2UzAbHN
The same pattern has been observed for the Baltic Dry Index.
However, #Trump threat (on all Chinese goods) is likely to cause major distortion with a spike in the coming days.

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Christophe Barraud🛢
@C_Barraud
🇺🇸 #SPX (1) | Equities ⬆ significantly since Dec. lows with participants not taking into account:
1/ the global synchronised slowdown that should be associated with a global trade contraction (YoY) soon
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🇺🇸 #SPX (2) | The move can be partly explained by the dovish switch in CBs:
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➡ #TINA can also explain why investors have rushed into other risky assets
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Christophe Barraud🛢
@C_Barraud
🇨🇳Chinese officials are launching a new offensive to support growth:

1/ #China Says Regulators Will Work to Unclog Monetary Transmission - Bloomberg
*Official Link (Chinese): bit.ly/2ADxRKE
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Christophe Barraud🛢
@C_Barraud
#SPX #Stocks (1) | Private asset managers raised a record $748 billion globally last year, according to Preqin data compiled and published in Mckinsey’s 2018 Global Private Markets Review - Bloomberg
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@samsankhe
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