Group Economics
Daily Insight
Macro & Financial Markets Research Aline Schuiling & Hans van Cleef
German consumer in spending mood
+ 31 20 343 5606
28 May 2015
Germany’s consumer climate reaches highest level in almost fourteen years Press reports suggest that Greece and its creditors might reach a deal soon, but hurdles remain Oil prices under renewed downward pressure
Consumer climate in Germany beats expectations Germany’s GfK consumer climate increased from 10.1 in May
Germany: consumer sentiment and unemployment
to 10.2 in June, whereas a small decline had been expected.
Level
The rise in June put the indicator at its highest level since October 2001 and well above its historical average value of 5. The details of the report show that consumers’ propensity to buy increased sharply, jumping by more than 4 points, to 62.6. Moreover, the expectations about the economy improved markedly. The only part of sentiment that deteriorated was the income expectations, which fell slightly but remained close to historical highs. The rise in confidence supports our view that
%
12
8.5
10
8
8
7.5
6 7
4
6.5
2 0
6 09
11
13
15
consumption will continue to grow robustly in the coming quarters. Press reports suggest a deal for Greece is in final stages
Consument sentiment (lhs)
Unemployment (rhs)
Source: Thomson Reuters Datastream
According to leaks to the press by Greek officials, Greece and its creditors have apparently entered the final stages of
Oil prices under downward pressure again
reaching a deal. But at the same time, a Greek government
Oil prices have declined in the past few days. The renewed
official mentioned that disagreements between the IMF and
downward pressure on prices can be explained by several
Europe were ‘a problem’, while a European official denied that
factors. To begin with, from a fundamental perspective, not
a deal was close. Still, Greek officials have mentioned that an
much has changed since oil prices traded at their January
agreement would probably contain a medium-term agreement
lows. There was, and still is, an oversupply of oil in the market.
on debt relief, a lower target for the primary budget surplus, no
Secondly, the recent recovery of the dollar – based on Fed
extra austerity measures, a sales tax overhaul, some changes
rate expectations and worries surrounding Greece – proved
to the pension system and a package of measures to stimulate
negative for commodities. Third, Hedge Funds cut a significant
growth. This certainly sounds like an attractive deal for Greece,
part of their existing oil long positions, and some even went
but we have to wait and see how much of this will turn out to
short, based on profit taking and the awareness that
be too good to be true.
oversupply still dominates the oil market. The fourth, and final, argument has to do with US crude production. The
No extra ELA support for Greek banks needed
combination of increased efficiency in (US) oil production and
The ECB did not raise Emergency Lending Assistance (ELA)
the rise in prices since the January lows, have triggered US
for Greek banks yesterday. It was the first time since February
crude producers to either continue or restart production. The
that the available amount was left unchanged. However,
drop in US rig count seems to have stabilized, and US
according to bank officials no request for extra support was
production is still around record levels. Therefore, the market
made by the Greek banks this week because they still had an
has started to realize that oversupply is here to stay for some
unused liquidity buffer. In earlier statements to the press
time. With the OPEC meeting coming up next Friday (market
officials close to the matter have said that under the current
expectations are for no change in OPEC policy), hopes that
collateral rules another EUR 20bn ELA would be available for
the global oil markets would find a new balance have started to
Greek banks, implying that they have enough liquidity to get
fade. Therefore, some more pressure on oil prices could be
them through the next couple of months, unless there is a
seen in the coming weeks.
sudden increase in deposit outflows.
2
German consumer in spending mood – 27 May 2015
Financial markets Currency markets
Close
Change 1 day
Change 5 days
Change YTD
EUR/USD USD/JPY
1.0894
-0.0917
-1.9618
123.75
0.0728
2.2389
-9.9521 3.3144
AUD/USD
0.7734
0.0647
-2.0517
-5.3945
USD/CHF
0.9499
0.0527
1.3984
-4.4655
NZD/USD
0.7242
-0.3303
-1.4560
-7.1181
GBP/USD
1.5346
-0.0521
-2.0176
-1.4830
USD/SGD
1.3509
0.0000
1.0623
1.9163
USD/CAD
1.2458
0.0482
2.1231
7.2025
Bond markets
Close
Change 1 day
Change 5 days
Change YTD
2-year German Govt Bond yield
-0.2290
-0.0030
-0.0170
10-year German Govt Bond yield
0.5540
0.0070
-0.0780
-0.1310 0.0130
Yield curve Germany
0.7830
0.0100
-0.0610
0.1440
2-year US Treasury Bond yield
0.6466
-0.0019
0.0736
-0.0179
10-year US Treasury Bond yield
2.1320
0.0035
-0.0578
-0.0392
Yield curve US
1.4854
0.0054
-0.1314
-0.0213
US 2-year sw ap rates
0.8903
-0.0057
0.0473
-0.0040
US 10-year sw ap rates
2.2125
-0.0295
-0.0538
-0.0736
US sw ap curve
1.3222
-0.0238
-0.1011
-0.0696
EU 2-year sw ap rates
0.0970
0.0010
-0.0080
-0.0780
EU 10-year sw ap rates
0.9002
-0.0018
-0.0608
0.0882
EU sw ap curve
0.8032
-0.0028
-0.0528
0.1662
-0.0130
0.0000
-0.0010
-0.0910
0.2859
0.0014
0.0049
0.0303
JPMorgan EMBI Plus Sovereign S
377.2200
3.6200
11.1300
-10.2200
Equity markets
Close
Euribor 3 Month ACT/360 ICE LIBOR USD 3 Month
Change 1 day % Change 5 days %Change YTD%
Nikkei 225
20,473
0.17
1.34
17.32
Hang Seng Index
28,081
-0.60
1.40
18.96
Hang Seng China Enterprises Index
14,702
-0.68
3.60
22.67
Australian Stock Exchange S&P/ASX 200 Index
5,740
0.25
1.37
6.07
Singapore Straits Times Index
3,425
-1.01
-0.43
1.78
Euro Stoxx 50 Index
3,683
1.76
-0.02
17.05
S&P 500 Index
2,123
0.92
-0.20
3.14
MSCI World Daily Total Return Gross USD
816
0.56
-0.64
6.30
AEX Index
504
1.44
0.32
18.62
13
-5.62
3.27
-30.89
Chicago Board Options Exchange Volatility Index
Commodity markets Reuters/Jefferies CRB Total Return
Close
Change 1 day % Change 5 days %Change YTD%
221
-0.69
-2.67
-4.24
1,188
-0.02
-1.54
0.25
Generic first NYMEX Crude Light future
58
0.33
-2.17
8.32
Generic first Brent Crude Oil future
62
0.44
-6.33
8.72
6,081
-0.43
-2.24
-3.48
488
0.00
-4.92
-17.30
Gold spot USD/Oz
LME Copper 3 Months Rolling Forw ard Generic first Wheat future Chicago Board of Trade Source: Bloomberg
3
German consumer in spending mood – 27 May 2015
Day
Date
Time
Country
Key Economic Indicators and Events
Period
Latest outcome
Monday
25/05/2015
01:50:00
JP
Merchandise trade exports - % yoy
Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday
26/05/2015 26/05/2015 26/05/2015 26/05/2015 26/05/2015 26/05/2015 26/05/2015
09:30:00 14:00:00 14:30:00 15:00:00 15:00:00 16:00:00 16:00:00
NL HU US US US US US
Wednesday
27/05/2015
16:00:00
Thursday Thursday
28/05/2015 28/05/2015
Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday
29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015 29/05/2015
Consensus
Apr
8.0
Producer confidence manufacturing - index Base rate -% New durable goods orders - % mom S&P/Case Shiller house price index FHFA house price index - % mom Conference Board cons. confidence - index New homes sold - % mom
May May 26 Apr Mar Mar May Apr
3.3 1.80 -1 1.0 0.3 95.4 7
1.65 -0.1 1.1 0.7 95.0 4.5
CA
Policy rate - %
May 27
0.8
0.8
11:00:00 16:00:00
EC US
Economic sentiment monitor - index Pending home sales - % mom
May Apr
103.7 1.1
103.6 1.1
01:30:00 01:30:00 01:50:00 08:45:00 10:00:00 10:30:00 14:00:00 14:00:00 14:30:00 15:45:00 16:00:00
JP JP JP FR EC GB BR IN US US US
CPI - % yoy Unemployment - % Industrial production - % mom Consumer spending - % mom M3 growth - % yoy GDP - % qoq GDP - % yoy GDP - % yoy GDP - % qoq annualised Chicago Fed - business confidence - index Univ. of Michigan cons. confidence - index
Apr Apr Apr P Apr Apr 1Q P 1Q 1Q 1Q S May May F
2.3 3.4 -0.8 -0.6 4.6 0.3 -0.3 7.5 0.2 52.3 88.6
4.8 0.4 -1.6 7.3 -0.9 53.4 91.2
ABN AMRO
3.0 1.65
0.8 94.0 5.0
103.5 1.5
-0.6 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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