Daily Insight
Group Economics Macro & Financial Markets Research Aline Schuiling & Martiza Cabezas
Euro domestic demand revives
+31 20 343 5606
stronger • • •
10 June 2015
Eurozone domestic demand accelerates … … while GDP growth becomes more evenly spread amongst countries US job market gets boost from small businesses stepping up hiring, while job openings at record high
Domestic demand in the eurozone accelerates
Eurozone GDP growth and main contributions
The second estimate for GDP growth in the eurozone came in
% qoq
at 0.4% qoq, the same as the first estimate. Growth in 2014Q4 was revised higher to 0.4% from 0.3%. The details of Q1 GDP were published for the first time. They showed that domestic demand accelerated. Private consumption grew by 0.5% qoq, up from 0.4% in Q4, while fixed investment growth picked up to 0.8% from 0.4%. In contrast, export growth slowed down (to 0.6% from 0.8%), which was probably due to the temporary weakness in the US economy and the economic slowdown in
0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 12Q1
12Q3
13Q1
13Q3
14Q1
14Q3
15Q1
China and Russia. Due to the strength of domestic demand, import growth accelerated to 1.2% from 0.8%, implying that total foreign trade shaved 0.2 percentage points off qoq growth
Consumption and investment
Foreign trade
GDP
Source: Thomson Reuters Datastream, ABN AMRO Group Economics
in Q1 (in Q4 it added 0.1 ppt). US small businesses step up hiring… Growth to strengthen in the coming quarters
The NFIB small business confidence survey confirms that the
We expect the eurozone economy to gather some momentum
US economy is improving. The May survey increased to 98.3
in the coming quarters. Export growth should benefit from the
from 96.9 the previous month. The components suggest that
weak euro. We think the effective euro exchange rate will
plans to hire have edged up, while at the same time owners of
depreciate further in the second half of this year, largely due to
small businesses are increasingly having difficulty to fill
differences in monetary policy in the US and the eurozone.
positions. These are strong signals that the labour market
Moreover, domestic demand will continue to be supported by
continues on a tightening mode. As for wages, owners of small
the historically low interest rates, improved access to bank
businesses indicate that they have increased labour
loans for companies (SMEs in particular) and a gradual labour
compensation a bit. These gains in compensation are still in a
market recovery. Finally, fiscal policy will, on balance, not
range of an economy with reasonable growth. This is another
weigh on economic growth in the eurozone as a whole this
sign that, after a weak first quarter, economic growth is on a
year, following years of austerity.
path to recovery.
Gap between periphery and the rest disappears
…while US job openings are at record high
GDP growth within the eurozone has converged significantly in
Job openings increased in April to 5.4 million from 5.1 million
recent years. During the crisis years 2011-2012 the gap
the previous month. This was the highest level of job openings
between yoy growth in the periphery (Italy, Spain, Portugal and
since the series began in December 2000. Although this report
Greece) and the rest of the eurozone widened to more than
lags the labour market report released some days ago, both
3ppts. Since then, it narrowed rapidly and in Q1 2015 the gap
reports confirm that the US labour market is recovering. Details
closed. Looking at all the individual member states, we can
by industry showed that labour demand was led by service
also see a marked convergence in growth. The average
sector industries, mainly transportation and utilities, as well as
difference between growth in each individual country and the
health care. As expected, manufacturing was down 6K, while
eurozone has fallen to levels below that of the first ten years of
openings in construction fell 15K. This is broadly consistent
the single currency area.
with the May nonfarm payrolls report released on Friday. We expect labour market slack to continue diminishing.
2
Euro domestic demand revives stronger – 9 June 2015
Financial markets Currency markets
Close
Change 1 day
Change 5 days
Change YTD
EUR/USD USD/JPY
1.1279
0.0799
0.2132
-6.7851
124.37
0.0644
-0.0080
3.7800
AUD/USD
0.7680
0.0912
-1.3487
-5.9400
USD/CHF
0.9312
0.0107
-0.3638
-6.3085
NZD/USD
0.7134
0.0140
-0.0700
-8.4798
GBP/USD
1.5376
0.0390
0.3066
-1.3157
USD/SGD
1.3517
-0.0074
0.6628
2.0459
USD/CAD
1.2344
0.1135
-0.8753
6.2764
Bond markets
Close
Change 1 day
Change 5 days
Change YTD
2-year German Govt Bond yield
-0.1590
0.0090
0.0350
-0.0610
10-year German Govt Bond yield
0.9500
0.0710
0.2360
0.4090
Yield curve Germany
1.1090
0.0620
0.2010
0.4700
2-year US Treasury Bond yield
0.7089
0.0281
0.0562
0.0444
10-year US Treasury Bond yield
2.4185
0.0361
0.1561
0.2473
Yield curve US
1.7096
0.0080
0.0999
0.2029
US 2-year sw ap rate
0.9630
-0.0026
0.0471
0.0687
US 10-year sw ap rate
2.4980
-0.0010
0.0355
0.2119
US sw ap curve
1.5350
0.0016
-0.0116
0.1432
EU 2-year sw ap rate
0.1520
0.0000
0.0250
-0.0230
EU 10-year sw ap rate
1.2640
-0.0030
0.0887
0.4520
EU sw ap curve
1.1120
-0.0030
0.0637
0.4750
-0.0130
0.0000
0.0000
-0.0910
0.2822
0.0010
-0.0003
0.0266
10.1100
8.1300
1.2600
Euribor 3 Month ACT/360 ICE LIBOR USD 3 Month JPMorgan EMBI Plus Sovereign S
388.7000
Equity markets
Close
Change 1 day % Change 5 days %Change YTD%
Nikkei 225
20,096
-1.76
-2.18
15.16
Hang Seng Index
26,990
-1.20
-1.74
14.34
Hang Seng China Enterprises Index
13,862
-1.79
-2.39
15.66
Australian Stock Exchange S&P/ASX 200 Index
5,471
-0.49
-4.60
1.11
Singapore Straits Times Index
3,295
-0.76
-1.37
-2.08
Euro Stoxx 50 Index
3,457
-0.33
-2.95
9.86
S&P 500 Index
2,082
0.13
-1.31
1.12
MSCI World Daily Total Return Gross USD
796
-0.46
-1.53
3.73
AEX Index
475
-0.09
-2.43
11.83
15
-3.20
3.93
-22.92
Chicago Board Options Exchange Volatility Index
Commodity markets Reuters/Jefferies CRB Total Return
Close
Change 1 day % Change 5 days %Change YTD%
224
0.23
-1.23
-3.00
1,178
0.30
-1.29
-0.61
Generic first NYMEX Crude Light future
60
3.11
-2.14
12.54
Generic first Brent Crude Oil future
65
3.29
-1.13
12.94
5,965
0.29
-1.24
-5.32
532
0.80
3.85
-9.75
Gold spot USD/Oz
LME Copper 3 Months Rolling Forw ard Generic first Wheat future Chicago Board of Trade Source Bloomberg
3
Euro domestic demand revives stronger – 9 June 2015
Day
Date
Time
Country
Key Economic Indicators and Events
Period
Latest outcome
Consensus
Monday Monday Monday Monday
08/06/2015 08/06/2015 08/06/2015 08/06/2015
01:50:00 08:00:00
JP DE CN CN
GDP - % qoq Industrial production - % mom Exports Imports
1Q F Apr May May
0.6 -0.5 -6.4 -16.2
0.7 0.6 -4.0 -10.0
Tuesday Tuesday Tuesday Tuesday Tuesday
09/06/2015 09/06/2015 09/06/2015 09/06/2015 09/06/2015
03:30:00 10:30:00 11:00:00 15:00:00 16:00:00
CN GB EC US US
CPI - % yoy Trade balance - GDP mln GDP - % qoq NFIB small business optimisme - index US Job Openings by Industry
May Apr 1Q final May Apr
1.5 -2817 0.4 96.9 4994
1.3 -2533 0.4
Wednesday Wednesday Wednesday
10/06/2015 10/06/2015 10/06/2015
01:50:00 23:00:00
JP NZ CN
Machinery orders private sector - % mom Policy rate - % M2 money growth - % yoy
Apr Jun 11 May
2.9 3.50 10.1
-2.4 3.39 10.5
Thursday Thursday Thursday Thursday Thursday
11/06/2015 11/06/2015 11/06/2015 11/06/2015 11/06/2015
07:30:00 07:30:00 07:30:00 14:30:00 16:00:00
CN CN CN US US
Fixed investments - % yoy Retail sales Industrial production Retail sales - % mom Business inventories - % mom
May May May May Apr
12.0 10.1 5.9 0.00 0.1
11.9 10.0 6.0 0.90 0.1
Friday Friday Friday Friday Friday
12/06/2015 12/06/2015 12/06/2015 12/06/2015 12/06/2015
06:30:00 11:00:00 14:30:00 14:30:00 16:00:00
JP EC US US US
Industrial production - % mom Industrial production - % mom Prod. prices index - % mom Prod. prices index excl food and energy - % mom Univ. of Michigan cons. confidence - index
Apr F Apr May May Jun P
1.0 -0.3 -0.40 -0.20 90.7
0.3 0.40 0.10 91.2
ABN AMRO
0.8
3.50
1.0
0.5
92.0
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
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