*Revenue from graphic chips disappoints as resellers cut orders
🇮🇹 #ITALY Q3 PRELIMINARY GDP Q/Q: 0.0% V 0.2%E; Y/Y: 0.8% V 1.0%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.
*AGEB SEES GERMAN 2018 ENERGY CONSUMPTION DOWN 5% AT 12,900 PJ
*Capex to drop to 31.8 trillion won in 2018, down 27%
Analysts say company doesn’t want to disclose falling numbers
*New orders: 51.9 vs 52.0 in Sept. (lowest since Sept. 2016.
*Lengthening worry list stretches from trade to rising rates
*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.
*#China offshore corporate-bond defaults amounted to $2.53b this year, including 9 dollar-denominated bonds and one HK dollar-based note.
*Excluding disasters, a global and Chinese economic slowdown likely weighted ⬇.
*CHINA OCT. RETAIL PASSENGER VEHICLE SALES 1.98M UNITS
🇩🇪 Sept. Exports M/M: -0.8% v +0.4%e
🇫🇷 Sept. Exports: -1.8% v -0.2% prior
*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
*BROADBENT: BREXIT UNCERTAINTY HITS PRODUCTIVITY, INVESTMENT
*BROADBENT: UNCERTAINTIES ON THINGS IN FORECASTS ARE MATERIAL
*OECD LOWERS EURO-AREA GROWTH FORECASTS FOR 2018, 2019
*OECD SAYS ‘DOWNSIDE RISKS ABOUND’ FOR GLOBAL ECONOMY
*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 ❗
*Despite a drop in EUR, exports remain under pressure due to global trade growth slowdown.
*DRAGHI: WORLD TRADE GROWTH MOMENTUM HAS SLOWED 'CONSIDERABLY' - BBG
*Figures also suggest that the consensus is too much optimistic for 2018 and especially 2019.
*It also means that the #Fed pause can take place sooner than I expect.
🇩🇪 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
*Slowdown was partly due to unfavorable base effects, ⬇ oil prices
*Shipments to most regions slowed reflecting ⬇ global demand
*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 2.05M UNITS
⬆ 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)
*Plans for capital investment and hiring and sales expectations all declined compared with the prior quarter.
*Small business optimism: 104.8 (lowest since April 2018) vs 107.4 prior
➡ Growth in retail sales slowed to +8.1% YoY in Nov. (the weakest reading since June 2003)
- Expectations Survey: 97.3 v 98.3e (lowest since Nov. 2014)
➡ 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.
*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.
➡ My proxies suggest that world trade growth is set to moderate to ~+3.5% in 2018 and <3% in 2019.
*It would be down from 4.8% in 2017 but up compared to my previous forecast for 2018 (~+3.5%).
*More clearly than last month, the indicator lies below its long-term average.
*It was +4.8% in 2017 and likely ~3.6%/3.7% in 2018.
*CHINA ECONOMY SLOWING, COULD BE RECESSION, HASSETT SAYS ON CNN
*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).
*Earlier this month, JPMorgan forecasted revenue would ⬇ 1% in 2019.
*Analysts expect a ⬇ this month (would break a 29-month growth streak)
*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.
- Prior MoM revised lower from -0.5% to -0.8%
- Prior YoY revised lower from 1.6% to 0.5%
➡ 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)
*Dec Economic Confidence: 107.3 v 108.2e (lowest since Dec. 2016; )
➡ Economic confidence slid for a 12th month in December ❗
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
*January is forecast at 1.75 million TEU, down 0.9 percent from January 2018 ❗
*CHINA 2018 RETAIL PASSENGER VEHICLE SALES FALL 6.0% ON YEAR
*CHINA CAR SALES HAVE FIRST ANNUAL DROP IN MORE THAN 2 DECADES
*It adds concerns over corporate profitability.
*Dec. PPI Y/Y: 0.9% V 1.6%E
*SPAIN ECONOMY PROBABLY GREW 2.6% IN 2018, CALVINO SAYS
*SPAIN CUTTING GROWTH ESTIMATE ON TIGHTER FISCAL STANCE: CALVINO
*CHINA TO KEEP CONSUMER INFLATION TARGET AT 3% IN 2019: REUTERS
🇨🇳 #CHINA DEC. IMPORTS -7.6% Y/Y IN DOLLAR TERMS; EST. +4.5%
*Largest contraction since July 2016.
*We'll see more ⬇ revisions in the coming weeks.
🇪🇺 Eurozone Nov Industrial Production M/M: -1.7% v -1.5%e; Y/Y: -3.3% v -2.1%e
➡ The limited rebound is lower than the consensus expected (+0.4%e for Bloomberg consensus) implying lower base effect for 2019.
*DRAGHI: UNCERTAINTIES, ESPECIALLY GLOBAL RISKS, STILL PROMINENT
*DRAGHI: NO ROOM FOR COMPLACENCY, SIGNIFICANT STIMULUS NEEDED
*EUROPEAN 2018 CAR SALES DROP 0.04%, FIRST DECLINE SINCE 2013
- Electronic Exports y/y: -11.2% v 4.3% prior (largest ⬇ since Feb. 2018)
*Trade-war side effects and cyclical weakness are tangled up in ugly economic data that continues to pile up across the board
➡ In addition, it should also highlight that risks associated to its outlook are no longer "balanced".
*Link (French): bit.ly/2HitGat
- 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.
*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)
➡ First 4Q18 GDP estimate will be released on Jan. 31
*Services PMI: 50.8 v 51.5e (65-month low)
*Composite PMI: 50.7 v 51.4e (66-month low)
➡ #ECB is likely to acknowledge the situation.
*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: REDUCTION OF STIMULUS WILL BE VERY GRADUAL
*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
*My proxies for Dec. and Jan. suggest that the weakness will last and will probably result in a contraction YoY soon
*Imports YoY YTD: 3.1% v 5.3% prior (lowest since April 2018)
*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)
*Contraction would mean Italy fell into "technical" recession in 4Q
*4Q GDP will be published tomorrow at 10:00 GMT
*Prior GDP YoY revised lower from 0.7% to 0.6%
*It suggest that global production growth (ex construction) will keep weakening in the coming months.
*On a YoY basis, the Harpex TEU Index turned negative in January.
*Rates of expansion slowed in both the manufacturing (31-month low) and service (28-month low) sectors.
*ANSA QUOTES EU SOURCES FOR GROWTH ESTIMATE CUT FOR ITALY
*EU ESTIMATES TAKE INTO ACCOUNT DECEMBER BUDGET MEASURES
*The 1,070 companies reporting a downturn in their December year-end results include more than 400 that expect to book a net loss
*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%
*BOE CUTS 2019 GDP FORECAST TO 1.2% V 1.7%, 2020 1.5% V 1.7%
*The Harpex TEU Index is now contracting at the fastest pace since March 2017.
*In the first quarter, the indicator dropped from -2.2 points to -13.1 points (lowest since 4Q 2011).
*The National Federation of Independent Business’s optimism index fell 3.2 points to 101.2, the lowest since November 2016.
Political uncertainty is weighing on businesses, with the group’s Uncertainty Index ⬆ 7 pts to 86 (highest since March 2017)
*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.
*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
*Production drops 0.9% on month, 4.2% from a year earlier (largest ⬇ since Nov. 2009).
*It confirms that the tariffs had a significant impact.
🇺🇸 NOV BUSINESS INVENTORIES: -0.1% V 0.2%E (1st decline since March 2018)
*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%.
*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.
*But details also reveal a synchronized slowdown as non-oil exports to 🇲🇾, 🇭🇰, 🇯🇵, 🇲🇨, 🇹🇼 (key partners) were also down YoY and hit most of sectors.
*Industrial Orders Y/Y: -5.3% (largest contraction since July 2016) v -2.0% prior
*Excluding this effect, exports remain under heavy pressure reflecting global synchronized slowdown and #tradewar.
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 ❗
*CURRENT ASSESSMENT: 103.4 V 103.9E (lowest since Feb. 2017)
*Expectations Survey: 93.8 v 94.3e (lowest since Nov. 2012)
*The index contracted 3 out of the last 4 weeks.
*The Harpex TEU Index is now contracting at the fastest pace since early March 2017.
*YoY: -1.4% v +0.7% prior (1st decline since Jan. 2016; largest contraction since Nov. 2009❗)
*On a YoY basis, my proxies suggest that global trade growth will keep contracting at least in Jan. and Feb.
*Most of organisations such OECD, FMI, etc. are likely to revise ⬇ their forecasts at next update.
*The slowdown in price increases is coherent with the ongoing rebound in existing home inventory ⬇
*Manufacturing Confidence: 101.7 v 102.0 prior (lowest since Aug. 2016)
*Economic Sentiment: 98.2 v 99.2 prior (lowest since Feb. 2015)
*Japan Government: Cuts assessment of industrial production, says output is 'stalling'
- Retail sales also ⬇ 2.3% MoM in Jan. (largest drop since Feb. 2016)
*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%
*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)
*It suggests that global production growth (ex construction) will keep weakening in the coming months.
*The index contracted 4 out of the last 5 weeks.
*Russian Feb. New Car, LCV Sales -3.6% y/y
*Vehicle production during 1H will likely be lower than a year ago.
*Retail sales of sedans, sport utility vehicles, multipurpose vehicles and minivans ⬇18.5% YoY (v -4.0% in Jan.).
*YTD, sales ⬇ 9.6%.
*Combined imports for the first two months fell 3.1%, following a rise of 4.4% in 4Q.
*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.
*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
*The January drop was caused by weak demand for investment goods, particularly from outside the euro area.
*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.
*The index contracted 5 out of the last 6 weeks.
*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)
*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.
*Imports Y/Y -14.0% v -2.1% prior (2nd straight contraction; largest decline since June 2017)
*New Orders: 3.0 v 7.5 prior (lowest since May 2017)
*Imports Y/Y: -5.4% v 0.0% prior (largest decline since Aug. 2016)
➡ Another sign that Asian demand remains under pressure.
*The index contracted 6 out of the last 7 weeks.
*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)
*KAMPER: #CHINA ORDER VOLUME SHOWED UNEXPECTED REDUCTION
*The shares declined as much as 20%.
*Capex at the same firms grew nearly 8% last year.
*BMW CAN'T RULE OUT GUIDANCE CHANGE IF CONDITIONS WORSEN: CFO
*The index contracted 7 out of the last 8 weeks.
- Prior revised lower from 10.8 to 10.7
*A downturn sparked by excess inventories and weakened demand, signs of which were evident back in August, could drag on longer than expected.
*INFINEON ADJUSTING OUTLOOK FOR '19 IN VIEW OF UNCERTAINTIES
*INFINEON FALLS 7% ON XETRA; ADJUSTS OUTLOOK AMID UNCERTAINTIES
*OSRAM 2Q OF FY '19 EXPECTED TO SEE REV DECLINE OF ROUGHLY 15%
*OSRAM SEES 2019 REVENUE DECLINE 11%-14%, SAW 0%-3% GROWTH
- The rebound of 2.3% MoM was expected amid the shift in calendar dates of the 🇨🇳 New Year, which boosted Asian trade:
*The index contracted 8 out of the last 9 weeks.
*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.
*MICHELIN CFO EXPECTS IMPROVEMENT IN CHINA NEW CAR SALES IN 2H
*The index contracted 9 out of the last 10 weeks.
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since Feb. 2017.
*Link (p. 7): bit.ly/2IrhpiO
*CHINA MARCH RETAIL PASSENGER VEHICLE SALES -12% ON YEAR: PCA
*CHINA CAR SALES FALL FOR 10TH STRAIGHT MONTH, PCA SAYS
➡ It confirms Spiegel report:
*The index contracted 10 out of the last 11 weeks.
*On the positive side, the decline is less pronounced than earlier this year, however, the semiconductor industry remains undr heavy pressure.
*The index contracted 11 out of the last 12 weeks.
*After seasonal adjustment, the Harpex TEU Index ⬇ at a slower pace this week.
*The semiconductor exports are on track to decline by the most since April 2009.
⬇ 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).
*As a reminder, global trade growth already fell 0.9% in 4Q18.
*The index contracted 12 out of the last 13 weeks.
*After seasonal adjustment, the Harpex TEU Index ⬇ at a slower pace this week.
*Decreases were seen in 🇨🇳, 🇪🇺, 🇧🇷, 🇬🇧, 🇹🇼, 🇰🇷, 🇹🇷, 🇵🇭, 🇨🇦, 🇲🇽, 🇦🇺, 🇵🇱 and 🇨🇿.
*The index contracted 13 out of the last 14 weeks.
*After seasonal adjustment, the Harpex TEU Index ⬇ at the slowest pace since 5 weeks.
- Prior MoM revised higher from -4.2% to -4.0%
- Prior YoY revised higher from -8.4% to -8.1%
*EU CUTS GERMAN GDP FORECAST TO 0.5%, WARNS OF EURO-AREA RISKS
"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 ❗
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.
*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)
*Real M1 ⬆ 0.4% YoY v +2.3% YoY prior.
*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 CAR SALES FALL FOR 11TH STRAIGHT MONTH, PCA SAYS
*The index contracted 14 out of the last 15 weeks.
*After seasonal adjustment, the Harpex TEU Index ⬇ at the fastest pace since 3 weeks.