Overnight News Recap: Slew of European Figures Ahead of ECB & BOE Rate Decisions

News Recap | Written by CEP News | Aug 07 08 10:33 GMT |
(CEP News) - A slew of economic news and macroeconomic data hit the European markets on Thursday, including German industrial production, German and French trade balance, Irish and Dutch CPI, and the Halifax Bank of Scotland's house price index for the UK to name a few. This comes just ahead of the Bank of England and European Central Bank rate decision later this morning.

Meanwhile, Asia-Pacific received a stronger-than-expected employment report from Australia and a negative outlook on the Japanese economy from officials.

On Thursday, the German Economic Ministry reported that German industrial production rose 1.7% in June on an annualized basis, up from both the 1.5% gain expected and the 0.8% increase seen in May. In seasonally adjusted terms, industrial output rose 0.2% in June month-over-month after falling 2.4% in May. However, economists had been more optimistic and were expecting a 0.8% gain in output.

Destatis reported that Germany's external trade surplus rose to €19.7 billion in June from the previous month's €14.3 billion. Economists had expected a less pronounced rise to €15.5 billion while May's figure was revised down from €14.4 billion. The German current account surplus also saw an increase in the month, rising to €18.5 billion, according to the Bundesbank. June's current account surplus more than doubled the previous month's €7.7 billion figure, which was revised up from €7.5 billion. Economists had expected a surplus of €12.0 billion.

On Thursday, the French Finance Ministry reported that the trade deficit increased to €5.6 billion in June. Economists had expected the figure to fall to a deficit level of €4.6 billion after seeing a deficit of €4.7 billion in May.

The Dutch consumer price index grew 3.2% in July on an annualized basis, up from both the 3.1% growth rate expected and the 2.6% rise seen in May, according to data released by Statistics Netherlands. On a monthly basis, Dutch prices rose 0.1% as expected after contracting 0.2% in the previous period.

According to the Central Statistics Office (CSO), Irish inflation slowed to 4.4% year-over-year in July from June's 5.0% rate. Economists had expected a more modest deceleration to 4.8% for the month. On a monthly basis, the Irish consumer price index fell 0.3% despite forecasts calling for no change in the index level. May had recorded a 0.5% increase in Irish CPI.

In EU harmonized terms, inflation in Ireland fell to 3.6% on an annualized basis from June's 3.9% print. Expectations had been for an acceleration in the inflation rate to 4.1%. In monthly terms, Irish HICP decreased 0.5%, down from the 0.1% decline expected after rising 0.5% in the previous period.

The National Institute of Statistics (ISTAT) reported that Italian industrial production fell 1.8% year-over-year in weighted daily average terms in June. However, this came in higher than the consensus forecast for a more pronounced fall of 2.0%.

According to the Halifax Bank of Scotland (HBOS), house prices in the UK fell 8.8% in July year-over-year to an average price of £177,351. Economists had expected a decline of 8.6% following the 6.1% decline seen in June. In monthly terms, house prices slipped 1.7%, adding to the 1.9% decline seen in the previous month. Economist had called for a 1.5% fall while June's reading was revised up slightly from -2.0%.

According to Statistics Sweden, price growth in the Scandinavian country reached 4.4% year-over-year in July, in line with expectations and up from June's 4.3% growth rate. In monthly terms, the Swedish consumer price index fell 0.1% as expected following May's 0.5% gain. The underlying inflation rate in Sweden remained unchanged at 3.2% year-over-year in June, down from the 3.3% print expected. Meanwhile, underlying prices fell 0.3% on a monthly basis following May's 0.4% increase. Economists had expected a 0.2% loss in prices.

The Swedish National Debt Office reported that the government's budget surplus rose to SEK 51.5 billion in July 2008, up from both the SEK 13.8 billion recorded in June and the SEK 12.4 billion seen in July 2007. The Debt Office also reported that interest payments in loans fell to SEK 1.1 billion from SEK 1.5 billion in June.

According to Statistics Norway, Norwegian industrial production rose 5.9% on an annualized basis in June, overshadowing the 2.8% gain registered in May. In monthly terms, industrial output declined 0.7% after rising 1.6% in the previous period. Meanwhile, manufacturing production fell 1.2%, deepening the 0.7% decline seen in May. However, economists had predicted an even stronger drop of 1.3% for the month.

Seasonally adjusted labour force figures released by the Australian Bureau of Statistics (ABS) indicate that employment in Australia increased by 10,900 to 10,721,500 in July 2008. Full-time employment increased by 53,700 to 7,718,400, with part-time employment rising by 42,800 to 3,003,100.

The unemployment rate for the nation remained steady at 4.3%. The male unemployment rate decreased by 0.1 percentage point to 3.9%, with the female unemployment rate increasing by 0.2 percentage points to 4.8%.

AiG's performance of Australian construction index increased to a reading of 41.6 in July from 40.3 in May; however, the index remains in sub-fifty territory, suggesting a contraction.

Following the release of its monthly economic assessment report, the Japanese government stressed that the economy was "weakening" for the first time since May 2001, the last time the country was in a recession. In its report, the Japanese government revised down its employment, export and production assessments. These revisions come one day after acknowledging that the strongest postwar economic expansion was over. "Exports are in a weak tone," the government said. "Industrial production is decreasing moderately."

Japanese machine orders declined 2.6% month-over-month in June despite forecasts for a 9.9% contraction and the previous month's 10.4% gain, while annual order rose 9.7% compared to forecasts for a 2.6% increase and the previous month's 5.1% rise.

Official reserve assets in Japan rose to $1.0047 trillion in July compared to June's $1.0015 trillion level.

The foreign purchase of Japanese stocks fell ¥382.7 billion in the week ending Aug. 1 after selling off ¥32.0 billion in the previous week. Buying of bonds rose ¥207.4 billion following the previous week's ¥72.8 billion sell-off. Meanwhile, the Japanese bought ¥135.2 billion in foreign stocks following the ¥3.5 billion sold in the prior week. The Japanese also purchased ¥176.0 billion in foreign bonds following the previous week's ¥343.2 billion buy-up.

AU AiG Performance of Construction Index July +41.6 vs. Prior: +40.3

JP Machine Orders (M/M) June -2.6% vs. Exp: -9.9% Prior: +10.4%

JP Machine Orders (Y/Y) June +9.7% vs. Exp: +2.6% Prior: +5.1%

JP Official Reserve Assets July $1004.7B vs. Prior: $1001.5B

JP Foreign Buying Japan Bonds 1-August +¥207.4B vs. Revised: -¥32.0B Prior: -¥39.7B

JP Foreign Buying Japan Stocks 1-August -¥382.7B vs. Prior: -¥72.8B

JP Japan Buying Foreign Stocks 1-August +¥135.2B vs. Prior: -¥3.5B

JP Japan Buying Foreign Bonds 1-August -¥176.0B vs. Revised: +¥343.2B Prior: +¥347.9B

AU Employment Change July +10.9K vs. Exp: +5.0K Revised: +22.2K Prior: +29.8K

AU Unemployment Rate July 4.3% vs. Exp: 4.3% Revised: 4.3% Prior: 4.2%

AU Participation Rate July 65.3% vs. Exp: 65.3% Prior: 65.3%

DE Trade Balance June +€19.7B vs. Exp: +€15.5B Revised: +€14.3B Prior: +€14.4B

DE Current Account June +€18.5B vs. Exp: +€12.0B Revised: +€7.7B Prior: +€7.5B

DE Imports SA (M/M) June -0.1% vs. Exp: +1.8% Revised: +0.5% Prior: +0.7%

DE Exports SA (M/M) June +4.2% vs. Exp: +1.8% Revised: -3.4% Prior: -3.2%

FR Trade Balance June -€5.6B vs. Exp:-€4.6B Prior:-€4.7B

IT Industrial Production (M/M) (SA) June +0.1% vs. Exp: +0.3% Prior: -1.4%

IT Industrial Production (Y/Y) (WDA) June -1.8% vs. Exp: -2.0% Revised: -4.0% Prior: -4.1%

IT Industrial Production (Y/Y) (NSA) June -4.4% vs. Exp: -4.5% Revised: -6.5% Prior: -6.6%

GB HBOS House Price 3Mths/Year July -8.8% vs. Exp: -8.6% Prior: -6.1%

GB HBOS Plc house prices (M/M) (SA) July -1.7% vs. Exp: -1.5% Revised: -1.9% Prior: -2.0%

DE Industrial Production (Y/Y) (NSA WDA) June +1.7% vs. Exp: +1.5% Revised: +1.1% Prior: +0.8%

DE Industrial Production (M/M) (SA) June +0.2% vs. Exp: +0.8% Revised: -1.8% vs. Prior: -2.4%

By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it with contributions from Tim Stackpool, tstackpool@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it

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