Archives of “Economy” category

rss

French statistics agency says economic activity seen at 95% of pre-virus levels in Q3

  
Analysis, Economy

INSEE weighs in with their assessment of French economic activity

France
  • Economic activity ran at 81% of pre-virus levels in Q2
  • Economic activity seen at 95% of pre-virus levels in Q3
  • Economic activity seen at 96% of pre-virus levels in Q4
  • Confirms previous forecast of a 9% decline in French GDP this year
That puts a bit of perspective to the recovery in the economy, but 95% is certainly rather stunning considering the fact that international travel – at least outside of Europe – is very much dead and the French economy isn’t able to benefit from that as well.
Of course, these are just estimates so we’ll see in time how the recovery progresses but amid labour market concerns as well, it may not play out too smoothly.

BOJ reportedly mulls “upgrading” economic assessment amid signs of a pickup

  
Analysis, Economy

Bloomberg reports, citing people familiar with the matter

Japan
The BOJ is said to likely consider upgrading its economic assessment amid signs of a rebound in the Japanese economy after the decline in Q2.
But the sources say that any changes would acknowledge that the slump has bottomed, rather than indicate optimism surrounding the outlook of the economy.
Adding that BOJ policymakers still see that the economic situation remains severe and highly uncertain amid the fallout from the coronavirus pandemic.
As for policy action, the sources say that BOJ policymakers see little need to take further measures at this point following their actions in March.
Well, as far as the headline goes, I think calling this an “upgrade” to the assessment is a bit of a stretch. If anything, it looks like they may just signal that the worst is over but the overall economic situation remains rather dire for the time being.
The BOJ will deliver their next assessment of the economy in their policy meeting this month on 17 September.

China’s exports likely kept solid momentum in August – Reuters poll

  
Analysis, Economy

Exports seen keeping pace after a solid July month

China
The Reuters poll on 23 economists show that China’s exports likely posted a second month of solid gains as more of its trading partners open up their respective economies amid the relaxing of coronavirus restrictions.
Estimates show that China’s August exports are to rise by 7.1% y/y, holding steady from the rise of 7.2% y/y from July. Meanwhile, imports are also seen improving to rise by 0.1% y/y, up from a drop of 1.4% y/y in July.
The official data is scheduled to be released some time next Monday.
For some context, the beat in exports data in July surpassed expectations handily and is giving hope that the economic recovery in China is picking up more significantly.
Despite that, China remains well behind their pledge in the Phase One trade deal as imports – particularly from the US – continue to lag. But hey, who is counting?

Germany to revise higher 2020 GDP forecast, expect weaker rebound in 2021

  
Analysis, Economy

Reuters reports, citing two sources familiar with the matter

Germany
  • 2020 GDP forecast to be revised to -5.8%; previously -6.3%
  • 2021 GDP forecast to be revised to +4.4%; previously +5.2%
These are the same figures as what Der Spiegel is reporting here. German economy minister, Peter Altmaier, is going to present the latest figures later today at ~0900 GMT.

Eurozone August final manufacturing PMI 51.7 vs 51.7 prelim

  
Analysis, Economy
  1 Comments

Latest data released by Markit – 1 September 2020

The preliminary release can be found here. This just confirms that factory activity held up somewhat in August across the euro area, keeping on the recovery path.
However, there are ongoing concerns surrounding domestic demand conditions and amid the hit to the services sector last month, it continues to allude to a considerable degree of uncertainty involving the virus situation in general.
We’ll have to see how things go in the coming months for a better idea on how the recovery is progressing within the region. Markit notes that:

“Eurozone factory output rose strongly again in August, providing further encouraging evidence that production will rebound sharply in the third quarter after the collapse seen at the height of the COVID19 pandemic in the second quarter. Business expectations for output in a year’s time also rose to the highest for over two years as prospects continued to brighten from the unprecedented gloom seen earlier in 2020.

“Caution is warranted in assessing the likely production trend, however, as so far it would have been surprising to have seen anything other than a rebound in output and sentiment. Worryingly, order book growth cooled slightly in August, and there are indications that firms are bracing for a near-term weakening of demand.

“Of note, a key theme of the latest survey is one of firms taking a cautious approach to costs and spending, notably in respect to investment and hiring, amid continued worries about the strength of future demand and uncertainty over the course of the pandemic. Producers of investment goods such as plant and machinery reported the weakest order book growth, and job losses remained amongst the most prevalent since the global financial crisis.

“Whilst the drop in payroll numbers was led by Germany, France, Spain and Austria reported a reacceleration of job losses and a return to job cutting was seen in Ireland, sending worrying signals that many firms have become more concerned about the near-term outlook.

“In short, manufacturing is currently being buoyed by a wave of pent up demand, but capacity is being scaled back. The next few months’ data will be allimportant in assessing the sustainability of the upturn.”

China – Caixin/Markit Manufacturing PMI for August: 53.1 (expected 52.5)

  
Analysis, Economy

Caixin/Markit Manufacturing PMI for August comes in stronger than expected and up from July at 53.1, 4th consecutive month in expansion

  • expected 52.5, prior 52.8
Highest since January of 2011
  • New export orders a notable improvement, first growth for this year
  • Sharpest increases in output and new orders since the start of 2011
  • Employment moves closer to stabilisation
Dr. Wang Zhe, Senior Economist at Caixin Insight Group (this in summary):
  • overseas demand started to pick up
  • new export orders entered expansionary territory for the first time this year, due mainly to the slowing spread of the pandemic overseas
  • Companies were willing to replenish their stocks as demand continued to expand
  • Employment remained subdued … employment subindex stayed in negative territory for the eighth consecutive month, but it was the closest to positive territory this year
  • backlogs of work expanded at a faster pace than the previous month, which could be seen as a positive signal that a turning point is approaching for employment.  Input costs and output prices both rose, albeit at a slower pace
“Overall, the post-epidemic economic recovery in the manufacturing sector continued. Supply and demand expanded with the pickup in overseas demand. Backlogs of work continued to increase. Both quantity of purchases and stocks of purchased items also grew. Companies’ future output expectations remained strong, reflecting a positive outlook for the manufacturing sector for the year ahead. Employment remained an important focus. An expansion of employment relies on long-term improvement in the economy. Macroeconomic policy supports are essential, especially when there are still many uncertainties in domestic and overseas economies. Relevant policies should not be significantly tightened.”
Go to top