Archives of “national accounts” tag

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Japan GDP for Q1, preliminary: GDP -0.9% sa q/q (vs. expected -1.1%)

  
Analysis, Economy
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Japanese economic growth in the January to March quarter of 2020 – this the preliminary release

GDP -0.9% sa q/q
  • expected -1.1%, prior -1.8%

GDP -3.4% annualised sa q/q

  • expected -4.5%, prior -7.1%
GDP -0.8% nominal q/q
  • expected -1.3%, prior -1.5%

GDP deflator (an inflation indication) %

  • expected 0.7%, prior 1.2%

Private consumption -0.7%

  • expected -1.6% q/q, prior -2.8%

Business spending -0.5% (capex)

  • expected -1.5%, prior -4.6%
More:
  • 2 consecutive quarters of contraction for the Japanese economy, the economy moves into recession for the first time since H2 of 2015
  • Q1 exports had their biggest drop q/q since the 2nd quarter of 2011, down 6%
January and February were stable to slowly picking up for Japan but the outbreak in  March hit economic growth. The April to June quarter is likely to be even worse, with a more prolonged impact. Restrictions were imposed by the April 7 national emergency declaration shutting many restaurants, large retail outlets, hotels and more. The restrictions were partially lifted on May 14, but are still in place for Tokyo and Osaka, the two largest cities in Japan.
Yen doing little.

ECB: Euro area GDP could shrink by 5% to 12% this year

  
  Analysis
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ECB notes in a pre-release of its economic bulletin

ECB
  • Euro area real GDP could fall by around 5% (mild scenario), 8% (medium scenario), and 12% (severe scenario) this year
  • Under the severe scenario, Q2 quarterly real GDP growth could be -15%, followed by a protracted and incomplete recovery; +6% in Q3, +3% in Q4
  • Under the severe scenario, real GDP is expected to remain well below the level observed at the end of 2019 until the end of 2022
The headline isn’t so much of a surprise since it is the same as what Lagarde has already highlighted in her press conference yesterday. This just adds more colour to it. In case you missed Lagarde’s remarks, you can check them out here and here (Q&A).

US advanced GDP for 1Q -4.8% versus -4.0% estimate

  
Analysis, Economy
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US GDP for 1Q 2020

The US advanced GDP data for the 1Q came in at +4.8% initially but the headlines were then corrected to read -4.8% vs -4.0% estimate.
  • Personal consumption fell -7.6% vs -3.6% estimate
  • Core PCE rose 1.8% vs 1.7% estimate
  • GDP price index rose 1.3% vs 1.0% estimate
The data signals the start of the recession.  The worst is yet to come as GDP is expected to plunge in the 2Q
US GDP

Japan trade balance for October Y 17.3bn (expected Y 229.3bn)

  
Analysis, Economy
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Japan trade balance for October Y 17.3bn

  • expected Y 229.3bn, prior Y -124.8bn

trade balance adjusted Y -34.7bn

  • expected Y 248.1bn, prior Y -97.2bn

exports -9.2% y/y –  worse than expected and the biggest y/y fall in 3 years.

  • expected -7.5%, prior 5.2%

imports -14.8% y/y – not as bad as expected but not good, ditto on the biggest y/y fall in 3 years.

  • expected -15.2%, prior -1.5%
More on export performance. Exports to:
  • the US down 11.4% y/y
  • to China down 10.3% y/y
  • to the EU down 8.4% y/y
  • to Asia down 11.2% y/y

European mid-morning: Currencies remain little changed but big week lies ahead

  
  Analysis
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Major currencies are <0.1% changed against the dollar so far today

EOD 28-10

The pound is arguably the only active mover as cable rose to a high of 1.2859 earlier in the session before settling back to near flat levels currently around 1.2820-30 levels.
Other major currencies are holding in narrow ranges against the dollar with little conviction to break stride so far today.
The risk mood is a bit mixed overall with European equities looking indecisive but bond yields are marked higher amid the fact that a Brexit extension was granted, with the move higher coming after France moved on their stance from last week.
Despite the slower start to currencies this week, fret not because it is going to be a crucial week ahead and here are some of the highlights to look forward to:
Monday, 28 October (still to come)
– UK parliamentary vote on Johnson’s election motion
Wednesday, 30 October
– Australia Q3 CPI data
– France Q3 preliminary GDP data
– US October ADP employment change
– US Q3 advanced GDP data
– Bank of Canada October monetary policy meeting
– FOMC October monetary policy meeting
Thursday, 31 October
– New Zealand October ANZ business confidence
– China October manufacturing, non-manufacturing PMI
– BOJ October monetary policy meeting
– Eurozone October preliminary CPI data
– Eurozone Q3 preliminary GDP data
– Canada August monthly GDP data
– US September PCE deflator data
Friday, 1 November
– China October Caixin manufacturing PMI
– US October non-farm payrolls, labour market report

China trade balance data for August – surplus comes in below median estimate

  
Analysis, Economy
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Trade balance data out from China Sunday will not be viewed as a positive input for China-related risk markets.

The counter to this is, of course, the expectation of stimulus from China, some of which we have already indeed seen (eg. only on Friday we got news of  the cut to the RRR) and more is forecast.

Yuan terms trade balance data

Surplus for the trade balance of 239.60bn … miss

  • expected CNY 299.3bn, prior was CNY 310.26bn

Exports +2.6% y/y … miss … slowing global growth and US tariffs key points for exports missing

  • expected +6.3%, prior was +10.3%

Imports -2.6% y/y  – falling imports are often associated with domestic economic weakness -this result not as sharp a fall as expected.

  • expected -3.1%, prior was +0.4%

USD terms

China trade balance: $+34.84

  • expected $44.3bn, prior was $44.58bn

(more…)

Japan BoP Current Account Balance for May: ¥ 1594.8B (vs. expected ¥ 1380.9B)

  
Analysis, Economy
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Data release from Japan’s Finance Ministry, preliminary balance of payments statistics for May

BoP Current Account Balance for May, preliminary ¥ 1594.8B for a nice beat
  • expected ¥ 1380.9B, prior ¥ 1707.4B
BoP Current Account Adjusted ¥ 1305.7B
  • expected ¥ 1231.0B, prior ¥ 1600.1B
Trade Balance BoP Basis ¥ -650.9B
  • expected ¥ -758.9B, prior ¥ -98.2B
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The background to this is shrinking exports due to economic growth slowing in China, trade wars impact. Japan has had a current account surplus for 58 straight months.

Why relying on GDP will destroy the world-Video

  
Analysis, Education, Video
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“The longer our obsession with GDP goes on, the longer the issues that really matter to people across the globe will continue to go ignored,” Mr Green said. “It’s not a measure of our well-being and it shouldn’t be a guide to all decision making.”

GDP was introduced as a concept in the 1930s by the economist Simon Kuznets, who warned at the time that “the welfare of a nation can… scarcely be inferred from a measurement of a national income”such as GDP. He later pointed out that there are distinctions between quantity and quality of growth, and between short term and long term goals.

“But we have ignored Kusnets’ warning,” said Mr Green, and we now talk about GDP as if it were “handed down from God on tablets of stone”. But major institutions are now weighing in with alternative measures of growth.

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