CANADA DATA: Q2 Factory Sales -4.8% QOQ, Biggest Quarterly Fall in Five Years
Aug-15 12:58
- Manufacturing sales in June +0.3% MOM, close to advance estimate of +0.4% and driven by petroleum and coal. The increase in June follows four straight months of decline. Volumes were unchanged in June.
- Capacity utilization rose to 79.1% in June from 78.6% in May led by gains in petroleum and coal and food.
- For the second quarter, factory sales -4.8% QOQ, largest quarterly drop since Q2 2020.
- Wholesales ex-petroleum and grains +0.7% matching the flash estimate and led by food, beverage and tobacco.
- Volumes +0.6%. Wholesales +3.2% YOY. Inventories +0.9% to CAD131.7B in June.
- For Q2, wholesales ex-petroleum and grains -1.7% QOQ led by machinery and equipment.
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US DATA: PPI Portfolio Services Lift With More Likely To Come
Jul-16 12:56
Adding to the above on what looks like roughly a neutral contribution to core PCE from PPI details at first glance.
- Portfolio-related costs look somewhat in the ballpark of limited expectations we'd seen.
- Portfolio management & investment advice: 1.9% M/M in June after an unrevised -0.8% M/M in May.
Within that, portfolio management increased 2.2% after -0.9%. - Citi had eyed 2.5% for portfolio mgmt whilst Nomura had looked for 4.3% for the broader portfolio & invt advice.
STIR: Modest Dovish Move In Fed Pricing On PPI, Hawkish CPI Move Briefly Unwound
Jul-16 12:54
Fed pricing little changed to a touch more dovish in the wake of the softer-than-expected PPI data, which comes on the heels of yesterday’s CPI reading.
- Our macro team notes that the PPI reading screens neutral to a little dovish for PCE.
- A reminder that the CPI data pointed to tariff pressures across several core goods categories.
- FOMC-dated OIS shows 0.5bp of easing for this month, 14.5bp through September, 28bp through October and 45bp through year-end. Levels little changed to 1.5bp more dovish vs. pre-data levels.
- The hawkish repricing that followed yesterday’s CPI was retraced at one stage, before the initial post-PPI dovish move faded a little.
- SOFR-implied terminal rate pricing moves to ~3.25% vs. 3.28% pre-data.
US DATA: Core PCE Estimates Could Be Trimmed Following Neutral PPI Readthrough
Jul-16 12:47
- Our crude proxy for key PPI contributions to core PCE sees another broadly neutral month in June, implying a boost of 0.02pp after a slightly upward revised 0.01pp in May (initially -0.01pp).
- For comparison, it follows -0.07pp in Apr, 0.07pp in Mar and 0.19pp in Feb.
- As such, it could leave core PCE estimates drift back a little closer to yesterday’s core CPI of 0.23% M/M vs pre-PPI core PCE estimates averaging 0.31% M/M. Of course that does also depend on what analysts expectations for particular line items.
- Reiterating how it’s not an exact science: whilst this rough proxy implies little boost from PPI details in May, there was still a slight gap between the 0.18% M/M currently seen for core PCE and 0.13% for core CPI.
