US household income growth looked pretty solid with a 0.6% m/m gain during January, which tends seasonally, to be a weaker month. That lifts the y/y rate back to a shade under 4.0%, although the near-term trend remains one of moderation. On the spending side the increase surprised on the downside at +0.2% m/m and that pulled y/y growth back to 4.5%
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In recent years equity markets have been driven more by central bank largesse than by corporate profit performance. With bond yields close to record lows — in both real and nominal terms — investors have charged into higher-yielding risk assets with gusto. Still it behoves us to keep an eye on the underlying earnings picture.
China looks to have the Coronavirus (COVID-19) under control. The rate of daily infections has been on a clear downward trend since the start of the month, suggesting the initial measures to quarantine areas were largely effective. As knowledge and understanding improves, it seems highly unlikely this is a temporary lull, even if economic disruptions surrounding the outbreak become more prolonged.
The weekend election in Hamburg ran largely to script (see our report Thuringian tremors 7th February 2020). The SPD-Green coalition,…
Chinese January credit data came in quite a bit stronger than expected, amid firm new loan growth and local government spending, which contributed to significantly a higher overall total social financing number (CNY5.7trn vs. the CNY4.3trn consensus). Chinese New Year fell earlier this year, but it’s not clear if that accounts for the strong outcome.
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Well, that didn’t take long. After last week’s debacle in Thuringia (see our report Thuringian tremors 7 February 2020) CDU leader Annegret Kramp-Karrenbauer (AKK) found her authority fatally undermined and announced that she would soon step down to allow a new leader to be elected in the summer. This leader, she said, should also become the party’s chancellor candidate for the next federal election, scheduled for autumn 2021.
CPI recorded a modest rise in January, headline up to 2.5% yoy from 2.3%, a shade above mkt estimates. Core flat at 2.3% yoy which was a touch above consensus too, but really not much more than rounding. Overall the inflation picture still looks fairly settled.
The Irish political paradigm is shattered. Deservedly so. The two political parties whose only difference is what side they fought…
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Tracking the strong ADP release on Wednesday, the January non-farm payrolls report also comfortably beat expectations. Weather has helped a bit last couple of months, with seasonal disruptions lower than normal, but that doesn’t detract from the underlying strength of the labour market.
The expected bounce in German factory orders remains elusive with a further sharp (-2.1% m/m) decline recorded in December. That leaves the y/y rate at a scary -8.6%, a new low and overall orders now 12.6% from their peak using the seasonally adjusted volume numbers.
Chart pack and analysis attached.
