Equities, not to be left out, had an intraday move of -8% in Taiwanese stocks on a new virus surge. A hacking incident over the previous weekend shut gas supplies to the USA’s eastern seaboard. This initial news flow was backed up by COVID nervousness around the more contagious so-called Indian variant. These forces combined with ongoing rotation from growth to value, resulting in the current batch of tech darlings continuing to get hurt.
The PBOC reiterated its comfort in current CPI and TSF outlooks, with total social financing (TSF) moving a little lower. CPI was constrained by decreases in pork prices, however PPI exceeded expectations at +6.8% YoY (6.5% exp., 4.4% prev.) driven by real estate and infrastructure spending. Chinese census data showed that the sensitive milestone of a decreasing population had not yet come to pass.
Apr headline CPI at +0.8% MoM (0.2% exp., 0.6% prev.) and a stunning +4.2% YoY (3.6% exp., 2.6% prev.). Core CPI, as usual, was more muted at +0.9% MoM (0.3% exp., 0.3% prev.) +3.0% YoY (2.3% exp., 1.6% prev.). Core retail sales -0.8% MoM (0.3% exp., 8.2% prev.) emphasised the volatility of data surrounding an economic opening. With the U. of Mich. survey showing weakening in the measures of sentiment, current conditions & expectations. Additionally, inflation moved higher with 1 Yr at +4.6% (3.5% exp., 3.4% prev.) and 5-10 Yr at +3.1% (2.7% prev.). In times past the market would have been a concerned by this, this week however, it was largely ignored.
Industrial production disappointed at +0.1% (0.8% exp., -1.0% prev.) and +10.9% YoY (11.8% exp., -1.6% prev.). German economic survey expectations moved higher with the current situation largely the same. Italian industrial production was weaker -0.1% MoM (0.4% exp., 0.2% prev.) and +37.7% YoY (37.1% exp., -0.6% prev.)
Swedish core CPIF met expectations at +0.4% MoM (0.4% exp., 0.3% prev.) bringing the YoY measure towards the Riksbank’s target +1.7% YoY (1.6% exp., 1.4% prev.). Norwegian core CPI +0.4% MoM (0.3% prev.) and 2.0% YoY (2.1% exp., 2.7% prev.) with GDP weaker at -0.5% MoM (-0.4% exp., -0.5% prev.) and -1.0% QoQ (-0.7% exp., 1.9% prev.)
Household spending ticked up, but economic surveys were weaker.
Monthly numbers reflected the move out of lockdown as industrial, manufacturing and construction production all moved higher. With services, less effected by the ebb and flow of lockdown, largely moving sideways. House price measures showed considerable strength. 1Q GDP was slightly better than expected at -1.5% QoQ (-1.6% exp., 1.3% prev.) and -6.1% YoY (-6.1% exp., -7.3% prev.).
Measures of consumer confidence ticked higher in card spending and house sales with manufacturing PMI lower, but still strong at 58.4 (63.6 prev.)