Friday March 24 2017
US Initial Jobless Claims Revised Up To 261K
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 15 thousand to 261 thousand in the week ended March 18th 2017, above market expectations of 240 thousand. It is the highest reading in 13 weeks. The 4-week moving average that removes week-to-week volatility increased by 3,500 to 246,500, revised data showed. Claims had been initially reported at 258 thousand for the week ended March 18th 2017. In contrast, continuing claims were revised down to 1,990 thousand from 2,000 thousand.

The previous week's level was revised up by 5,000 to 246,000 and the previous week's average was revised up by 5,750 to 243,000. 

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending March 11, a decrease of 0.1 percentage point from the previous week's unrevised rate. 

Continuing claims fell by 35,000 to 1,990,000 during the week ending March 11. This is the lowest level for insured unemployment since May 27, 2000 when it was 1,987,000. The previous week's level was revised down by 5,000 to 2,025,000. The 4-week moving average was 2,032,750, a decrease of 15,500 and the lowest level for this average since June 24, 2000 when it was 2,028,250. The previous week's average was revised down by 6,000 to 2,048,250. 




Friday March 24 2017
US Manufacturing PMI Down To 5-Month Low: Markit
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The Markit flash US manufacturing PMI fell to 53.4 in March of 2017 from 54.2 in February and well below expectations of 54.8. It is the lowest reading since October of 2016, mainly due to a slowdown in new orders and lower stocks while input cost inflation picked up.

Mirroring the overall trend for business activity, latest data signalled that manufacturing new order volumes expanded at the slowest pace for five months. This contributed to more cautious purchasing activity in March, alongside renewed efforts to streamline inventories. Reflecting this, preproduction stocks were accumulated at the weakest pace since last September, while finished goods inventories dropped for the first time in six months.

Input cost inflation meanwhile picked up in March, which survey respondents attributed to rising commodity prices (particularly metals). The overall rate of input price inflation was the fastest for twoand-a-half years. Efforts to pass on higher costs contributed to an upturn in factory gate price inflation to its strongest since November 2014.




Friday March 24 2017
Canada Inflation Rate Slows To 2% In February
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Consumer prices in Canada increased 2 percent year-on-year in February of 2017, easing from a 2.1 percent rise in the preceding month and below market expectations of 2.1 percent. Telephone services declined and food prices posted the biggest drop since 1971. In contrast, transportation and shelter contributed the most to the rise in the CPI.

Year-on-year, transportation cost rose 6.6 percent after a 6.3 percent increase in January, led by gasoline prices. This acceleration occurred despite a 0.8 percent monthly decline in February. The purchase of passenger vehicles index increased less in February (3.6 percent) than in January (3.8 percent).

Prices of recreation, education and reading advanced 3.3 percent, following a 3.2 percent increase in January. A 6.2 percent rise in the traveller accommodation was partly attributable to major sporting events that took place in February. The travel tours index fell 0.5 percent, after increasing 5.5 percent a month earlier.

The household operations, furnishings and equipment index went up 0.6 percent, after rising 1.2 percent in the previous month. This deceleration was led by the telephone services index, which declined 2.2 percent, following a 1.6 percent increase in January. In contrast, the Internet access services cost rose 0.2 percent, following a 1 percent decline in January.

Consumers paid 2.3 percent less for food compared with a year ago, due to lower prices for fresh vegetables (-14.0 percent) and fresh fruit (-13.3 percent) which reflect a spike in their prices last winter. Also, the prices of dairy products fell 2.5 percent, its largest decrease since March 1994, namely lower cheese prices. Prices for food purchased from restaurants rose 2.3 percent, matching the gain in January.

On a monthly basis, consumer prices went up 0.2 percent after a 0.9 percent rise in January.

Excluding food and energy, consumer prices were up 0.4 percent on the year and excluding gasoline only, prices gained 1.3 percent. 




Friday March 24 2017
US Durable Goods Orders Above Expectations
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

New orders for US manufactured durable goods went up 1.7 percent month-over-month in February of 2017, following an upwardly revised 2.3 percent jump in January and beating market expectations of a 1.2 percent rise. Civilian aircraft orders surged 47.6 percent and were the main driver of the increase. Non-defense capital goods orders excluding aircraft, a closely proxy for business spending plans, fell 0.1 percent after edging up 0.1 percent in the previous month.

Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders increased 2.1 percent. Transportation equipment, also up two consecutive months, led the increase, $3.3 billion or 4.3 percent to $80.4 billion. 

Shipments of manufactured durable goods, up three of the last four months, increased $0.6 billion or 0.3 percent to $239.2 billion. This followed a 0.1 percent January decrease. Machinery, also up three of the last four months, led the increase, $0.3 billion or 0.9 percent to $31.1 billion. 

Unfilled orders for manufactured durable goods in February, down eight of the last nine months, decreased $0.2 billion or virtually unchanged to $1,114.7 billion. This followed a 0.3 percent January decrease. Transportation equipment, also down eight of the last nine months, drove the decrease, $1.1 billion or 0.1 percent to $752.7 billion. 

Inventories of manufactured durable goods in February, up three of the last four months, increased $0.8 billion or 0.2 percent to $385.1 billion. This followed a 0.1 percent January increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $0.2 billion or 0.1 percent to $122.9 billion.

Nondefense new orders for capital goods in February increased $2.9 billion or 4.1 percent to $72.9 billion. Shipments decreased less than $0.1 billion or 0.1 percent to $72.1 billion. Unfilled orders increased $0.8 billion or 0.1 percent to $690.1 billion. Inventories increased $0.4 billion or 0.2 percent to $171.0 billion. Defense new orders for capital goods in February decreased $0.8 billion or 8.3 percent to $9.2 billion. Shipments increased $0.5 billion or 5.1 percent to $11.4 billion. Unfilled orders decreased $2.2 billion or 1.6 percent to $137.8 billion. Inventories increased $0.3 billion or 1.2 percent to $21.5 billion. 




Friday March 24 2017
Russia Cuts Key Rate To 9.75%
Central Bank of the Russian Federation | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The Central Bank of Russia has lowered its benchmark one-week repo rate by 25 bps to 9.75 percent on March 24th, while markets expected no change in rates. Policymakers signaled the possibility of further cuts in the second and third quarter of 2017, as inflation slowdown overshoots the forecast, inflation expectations continue to decline and economic activity recovers.

Information Notice of Bank of Russia:

Inflation declines ahead of the forecast. Over the first twenty days in March, annual consumer price growth dropped to an estimated 4.3%, from 5% in January 2017. February saw a continued slowdown in price growth across all key groups of goods and services, and a reduction in seasonally adjusted monthly inflation. Inflation slowdown was broadly facilitated by the ruble appreciation amid higher than expected oil prices, persistent interest in investment in Russian assets among external investors, and a drop in the sovereign risk premium. Bumper harvests of 2015-2016 resulted in high stocks of agricultural products, leading to a material slowdown in food inflation and falling vegetable and fruit prices.

Disinflationary drag from domestic demand persists. Households broadly tend to demonstrate savings behaviour patterns. There are signs of revival in consumption and wages are growing both in nominal and real terms. Noticeable inflation deceleration will be conducive to a further reduction in inflation expectations among households and businesses. The Bank forecasts that the annual consumer price growth will reduce to 4% by the end of 2017 and will remain within this target range in 2018-2019.

In order to maintain the propensity to save and anchor sustainable inflation slowdown driven by demand-side restrictions, monetary conditions should remain moderately tight.  A gradual decline in nominal interest rates and the easing of non-price bank lending conditions will remain. Given banks’ conservative policy stance, these trends will mostly influence high-quality borrowers. The Finance Ministry’s purchases of foreign currency in the FX market did not have any substantial impact on the ruble exchange rate dynamics as the driving factors of its appreciation remained dominant. Short-term inflation risks related to these operations did not materialise.

The pace of economic recovery is higher than expected. Estimates show that quarterly GDP has been going up since 2016 Q2 and the trend is set to continue. Fixed capital investment is expected to advance in Q1. Unemployment remains persistently low. Polling data reflects an improvement in business and household sentiment, conducive to favourable economic dynamics. According to the estimates, the observed annual rise in real wages fosters gradual growth in consumer activity without posing an additional proinflationary pressure amid increased supply of goods and services.

The Bank takes into consideration the oil market uncertainty and keeps pursuing a conservative approach to the forecast, which assumes an oil price reduction to $40 per barrel by the end of 2017 and its further staying near this level. GDP is expected to grow by 1-1.5% in 2017 and by 1-2% in 2018-2019 considering the current dynamics of recovery processes and higher economy resilience to fluctuations in external economic environment. It takes structural changes and time for positive trends to evolve and take root.

The risks that inflation will miss the 4% target by the end of 2017 have slightly abated. Nevertheless, there are still risks that inflation may fail to anchor at the target level in the medium run. These risks are implied by the inertia of inflation expectations, as well as a possible rapid decline in households’ propensity to save. Volatility in the global commodity and financial markets may weigh negatively on expectations with regard to exchange rate and inflation. The said risks may also materialise over the mid-term horizon. Moderately tight monetary policy will allow to limit their effects and maintain consumer price growth rates close to 4%.




Friday March 24 2017
France GDP Growth Matches Estimates In Q4
Insee | Rida Husna | rida@tradingeconomics.com

France GDP advanced 0.4 percent quarter-on-quarter in the December quarter of 2016, compared to a 0.2 percent growth in the three months to September and in line with second estimates, final figures showed. It was the second straight quarter of growth and the strongest since the March quarter, driven by faster rises in household consumption and investment while net external demand contributed slightly to the GDP.

In the three months to December 2016, household consumption rose 0.6 percent, following a 0.1 percent rise in the previous two quarters. Government expenditure went up 0.3 percent, the same as in the preceding quarter. Total gross fixed capital formation grew by 0.5 percent, compared to a 0.2 percent growth in the third quarter. Final domestic demand (excluding changes in inventories) contributed 0.5 points to GDP growth, up significantly from 0.2 points in the prior quarter.

Exports rose 1.3 percent, faster than a 0.8 percent rise in the September quarter. Imports went up 0.9 percent, slowing sharply from a 2.7 percent increase in the preceding quarter. The foreign trade balance contributed positively to the economy (0.1 points after -0.6 points in the third quarter). In contrast, changes in inventories contributed negatively: -0.2 points after +0.7 points in the September quarter.

Year-on-year, the GDP grew 1.1 percent, compared to a 0.9 percent expansion in the third quarter and matching preliminary estimates.




Friday March 24 2017
Dutch GDP Growth Revised Up Slightly To 0.6% In Q4
Rida | rida@tradingeconomics.com

The Dutch economy expanded 0.6 percent on quarter in the December quarter of 2016, faster than preliminary estimates of a 0.5 percent growth but slower than a 0.8 percent expansion in the third quarter, final figures showed. It was the 11th straight quarter of growth, as a rebound in government spending and positive contribution from net trade offset a slowdown in private consumption and a decline in investment.

In the fourth quarter, private consumption increased by 0.7 percent, slowing from a 1.0 percent rise in the prior quarter. Government spending rebounded 0.6 percent, after declining 0.1 percent in the September quarter. Net trade contributed positively to the GDP growth. Exports grew by 0.9 percent (from 1.0 percent) and imports went up 0.4 percent (from 0.9 percent). In contrast, gross fixed capital formation contracted by 2.5 percent (after remaining unchanged in Q3). Changes in inventories added  0.2 percentage points to the GDP growth. 

Year-on-year, gross domestic product advanced 2.5 percent, faster than preliminary estimates of  2.3 percent growth but the same pace as an upwardly revised figure in the prior quarter. Private consumption rose 2.6 percent (from 1.9 percent in Q3). Government spending also increased by 1.5 percent (from 0.7 percent). Exports of good and services went up 2.5 percent (from 2.8 percent). Imports rose 1.3 percent, slowing from a 3.1 percent rise in Q3. In contrast, gross fixed capital formation contracted by 1.0 percent (after a 7.2 percent rise in the preceding quarter). 

Considering full 2016, the economy grew by 2.2 percent, faster than a 2.0 percent expansion in 2015, mainly driven by private consumption and fixed investment.




Friday March 24 2017
Malaysia Inflation Rate At Over 8-Year High Of 4.5% In February
Statistics Malaysia l Rida Husna | rida@tradingeconomics.com

Consumer prices in Malaysia rose 4.5 percent year-on-year in February of 2017, compared to a 3.2 percent increase in January and above markets expectations of a 4.1 percent rise. It was the highest inflation rate since November 2008, driven by faster rises in prices of food and non alcoholic beverages and housing and utilities while cost of transport surged.

Year-on-year, upward prices pressure came from: food & non-alcoholic beverages (4.3 percent from 4.0 percent in January); alcoholic beverages & tobacco (0.2 percent from 0.2 percent); housing, water, electricity, gas & other fuels (2.2 percent from 1.9 percent); furnishing, household equipment and routine maintenance (1.5 percent from 1.5 percent), health (2.4 percent from 2.5 percent), transport (17.9 percent from 8.3 percent), recreation services & culture (3.1 percent from 3.3 percent), education (1.7 percent from 2.0 percent), restaurants & hotels (2.3 percent from 2.1 percent) and miscellaneous goods & services (1.4 percent from 1.4 percent). In contrast, downward prices pressure came from: clothing and footwear (-0.2 percent from -0.7 percent) and communication (-0.3 percent from -0.2 percent).

Among food & non-alcoholic beverages, customers had to pay more for all categories: food (4.5 percent from 4.1 percent); food at home (4.8 percent from 4.4 percent); rice, bread & other cereals (0.8 percent from 0.8 percent); meat (4.6 percent from 2.0 percent); fish & seafood (4.5 percent from 6.1 percent); milk & eggs (0.2 percent from 0.5 percent), oils & fats (38.3 percent from 37.9 percent), fruits (3.4 percent from 2.1 percent); vegetables (9.5 percent from 7.8 percent); sugar, jam, honey, chocolate & confectionary (0.4 percent from 0.4 percent); food products (5.3 percent from 5.4 percent), food away from home (4.1 percent from 3.6 percent). Meanwhile, prices of coffee, tea, cocoa & non-alcoholic beverages fell 0.2 percent (compared to a flat reading in January 2017). 

Core consumer prices went up 2.5 percent year-on-year, following a 2.3 percent gain in the prior month and marking the highest figure in eleven months.

On a monthly basis, consumer prices went up by 1.3 percent in February, faster than a 1.1 percent rise in a month earlier. Prices rose for: food & non-alcoholic beverages & tobacco ( 1.2 percent); clothing and footwear (0.2 percent); housing, water, electricity, gas & other fuels (0.4 percent); furnishings, household equipment and routine maintenance ( 0.4 percent), health (0.3 percent), transport (5.5 percent), recreation services & culture (0.4 percent), restaurants & hotels ( 0.6 percent) and  miscellaneous goods and services (1.4 percent). In contrast, cost fell forcommunication (-0.1 percent) and education (-0.2 percent). Cost was flat for alcoholic beverages & tobacco.




Thursday March 23 2017
New Zealand February Trade Deficit Largest Since 2007
Mario | mario@tradingeconomics.com

New Zealand posted a trade deficit of NZD 18 million in February of 2017 compared to a NZD 366.9 million surplus in the same month of the previous year. It was the biggest trade deficit for any February since 2007 and was well below expectations of a NZD 160 million surplus. The annual trade deficit for the year ended February 2017 was $3.8 billion, the largest since April 2009.

Exports fell 5.5 percent year-on-year to NZD 4.00 billion in February, mainly affected by a 98.8 percent fall in ships, boats & floating structures. The largest component, meat & edible offal rose by 4.4 percent (from +2.7 percent in January). The second largest component, logs, wood & wood articles fell 1.7 percent (from -4.0 percent). Shipments increased to China (6.3 percent from +12.3 percent in January) and Australia (2.1 percent from +12.8 percent in January), but declined to the EU (9.6 percent from -25.9 percent), South Korea (9.0 percent from -34.8 percent), Japan (5.7 percent from -10.6 percent), and the United States (3.0 percent from -6.1 percent).

Meanwhile, imports increased by 4.0 percent to NZD 4.02 billion, led mainly by a 20.3 percent increase in vehicles, parts & accessories (from +28.3 percent in January), and a 32.0 rise in petroleum & products (from +52.6 percent). Imports increased from Japan (6.3 percent from +39.7 percent in January) and the EU (2.9 percent from +0.6 percent). Shipments declined from China (10.2 percent), Australia (9.2 percent), and the United States (2.5 percent). 




Thursday March 23 2017
US New Home Sales At 7-Month High
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses in the United States jumped 6.1 percent to a seasonally adjusted annual rate of 592,000 in February of 2017. It follows an upwardly revised 558,000 in the previous month, and well above market expectations of 565,000 as unusual warm weather boosted sales in the Midwest, West and the South. Meanwhile, sales of previously owned houses dropped 3.7 percent to 5480 thousand, down from a ten-year high of 5690 thousand in January.

Sales rose in the Midwest (30.9 percent to 89 thousand), the West (7.5 percent to 157 thousand) and the South (3.6 percent to 313 thousand) but slumped 21.4 percent to 33 thousand in the Northeast. 

The median sales price of new houses sold was $296,200, lower than $308,200 in the previous month. The average sales price was $390,400, above $355,300 in January.

The stock of new houses for sale went up to 261 thousand from 260 thousand in January. This represents a supply of 5.4 months at the current sales rate.

Year-on-year, new home sales rose 12.8 percent.




Thursday March 23 2017
US Initial Jobless Claims Rise To 7-Week High
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 15 thousand to 258 thousand in the week ended March 18th 2017, above market expectations of 240 thousand. It is the highest reading in seven weeks. The 4-week moving average that removes week-to-week volatility increased by 1,000 to 240,000.

The previous week's level was revised up by 2,000 to 243,000. The 4-week moving average was revised up by 1,750 to 239,000.

The seasonally adjusted insured unemployment rate was 1.4 percent for the week ending March 11, a decrease of 0.1 percentage point from the previous week's unrevised rate. 

Continuing jobless claims fell by 39,000 to 2,000,000 during the week ending March 11. The previous week's level was revised up 9,000 to 2,039,000. The 4-week moving average was 2,026,750, a decrease of 32,000 from the previous week's revised (up by 4,500 to 2,058,750).


Thursday March 23 2017
Philippines Leaves Monetary Policy Unchanged
Bangko Sentral NG Pilipinas | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Philippines left its benchmark overnight borrowing rate steady at 3 percent on March 23rd, 2017 as widely expected, saying inflation is expected to remain within the target of 3.0 percent ± 1 percentage point in 2017-2018. However, policymakers slightly lowered inflation forecasts for this year to 3.4 percent from 3.5 percent. In February, consumer prices went up 3.3 percent year-on-year, the highest since November of 2014.

Statement by the Bangko Sentral NG Pilipinas:

The corresponding interest rates on the overnight lending and deposit facilities were also kept steady. The reserve requirement ratios were likewise left unchanged.

The Monetary Board’s decision is based on its assessment that the outlook for inflation remains manageable, consistent with favorable growth prospects. While the average headline inflation for the first two months of 2017 has risen due to the recent increases in food and oil prices as well as base effects, latest baseline forecasts are slightly lower than previous forecasts and within the target range of 3.0 percent ± 1 percentage point for 2017-2018. Inflation expectations also remain anchored to the inflation target over the policy horizon.

The Monetary Board also observed that the balance of risks surrounding the inflation outlook remains tilted toward the upside, given the transitory impact of the proposed tax reform program as well as possible adjustments in transportation fares and electricity rates. Meanwhile, lingering uncertainty over the prospects of the global economy, due in part to possible shifts in macroeconomic policies in advanced economies, continues to pose a key downside risk to the inflation outlook. The Monetary Board also noted the beneficial effects on inflation of the removal of quantitative restrictions on rice importation. The Board emphasized that domestic economic activity is projected to stay firm, supported by buoyant household consumption and private investment, increased government spending, and ample credit and liquidity.

With these considerations, the Monetary Board believes that prevailing monetary policy settings remain appropriate. Looking ahead, the BSP will continue to monitor evolving economic conditions to ensure price and financial stability conducive to sustainable economic growth.




Thursday March 23 2017
Singapore Inflation Rate at 30-Month High of 0.7%
Statistics Singapore l Rida Husna | rida@tradingeconomics.com

Consumer prices in Singapore rose 0.7 percent year-on-year in February of 2017, compared to a 0.6 percent increase in January and in line with markets expectations. It was the highest inflation rate since August 2014, driven by a faster increase in cost of transport while prices of food rose further and cost of housing & utilities fell slightly less than in the prior month.

Year-on-year, upward prices pressure came from: household durables & services (1.5 percent from 2.1 percent in the prior month, largely due to a  2.9 percent increase in household services & supplies), health care (2.6 percent from 2.5 percent, mainly driven by a 3.5 percent rise in medical & dental treatment), transport (4.2 percent from 2.8 percent, mainly due to a 7.1 percent rise in private road transport), communication (0.7 percent from 0.4 percent) and recreation & culture (0.5 percent from 0.5 percent, largely due to a 6.1 percent increase in newspapers, book & stationery and a 0.3 percent growth in holiday expenses) and education (3.6 percent from 3.5 percent, due to a 3.7 percent rise in tuition & other fees and a 0.1 percent increase in school textbooks & related study guides). In contrast, cost declined for: clothing & footwear (-0.2 percent from-1.5 percent), housing & utilities (-3.1 percent from -3.2 percent, largely due to a 4.0 percent drop in accommodation) and miscellaneous goods & services (compared to a flat reading in a month earlier, due to a 2.0 percent drop in personal care).

Prices of food rose 1.3 percent in February, following a 1.9 percent gain in January. Among food, cost of food excluding food servicing services increased by 1.0 percent, compared to a 2.0 percent rise in a month earlier while food servicing services rose 1.5 percent, following a 1.8 percent gain in a month earlier. Among food excluding food servicing services, cost increased for bread & cereals (1.2 percent), meat (0.2 percent); fish & seafood (0.4 percent); milk, cheese & eggs (0.9 percent), fruits (2.6 percent), vegetables (2.7 percent); sugar, preserves & confectionery (1.7 percent) and other food (0.2 percent). In contrast, prices fell for oils & fats (-2.8 percent) and non-alcoholic beverages (-0.4 percent). Among food servicing services, prices increased for all categories: restaurant foods (0.9 percent), fast food (2.1 percent), hawker food including food courts (1.8 percent) and catered food (2.5 percent).

Core inflation, which excludes costs of accommodation and private road transport, went up 1.2 percent year-on-year, following a 1.5 percent gain in the prior month.

On a month-on-month basis, consumer prices remained unchanged, after gaining 0.2 percent in a month earlier.




Wednesday March 22 2017
New Zealand Holds Interest Rate At 1.75%
Mario | mario@tradingeconomics.com

The Reserve Bank of New Zealand kept its official cash rate unchanged at record low of 1.75 percent on March 22nd, 2017, as widely expected. The central bank left the monetary rate unchanged for the fourth straight meeting. Policymakers underscored that headline inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation; that quarterly GDP was weaker than expected in the December quarter; and that global inflation has increased. They also reiterated that monetary policy will remain accommodative for a considerable period, as numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.

Statement by Reserve Bank Governor Graeme Wheeler:

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent.

Macroeconomic indicators in advanced economies have been positive over the past two months.  However, major challenges remain with on-going surplus capacity in the global economy and extensive geo-political uncertainty.

Global headline inflation has increased, partly due to a rise in commodity prices, although oil prices have fallen more recently. Core inflation has been low and stable. Monetary policy is expected to remain stimulatory, but less so going forward, particularly in the US.

The trade-weighted exchange rate has fallen 4 percent since February, partly in response to weaker dairy prices and reduced interest rate differentials. This is an encouraging move, but further depreciation is needed to achieve more balanced growth.

Quarterly GDP was weaker than expected in the December quarter, but some of this is considered to be due to temporary factors. The growth outlook remains positive, supported by on-going accommodative monetary policy, strong population growth, and high levels of household spending and construction activity. Dairy prices have been volatile in recent auctions and uncertainty remains around future outcomes.

House price inflation has moderated, and in part reflects loan-to-value ratio restrictions and tighter lending conditions. It is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand.

Headline inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation. Headline CPI will be variable over the next 12 months due to one-off effects from recent food and import price movements, but is expected to return to the midpoint of the target band over the medium term. Longer-term inflation expectations remain well-anchored at around 2 percent.

Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.




Wednesday March 22 2017
South Africa Inflation Rate Slows To 6.3% in February
Statistic of South Africa | Deborah Neves | deborah.neves@tradingeconomics.com

Consumer prices in South Africa rose 6.3 percent year-on-year in February of 2017, following a 6.6 percent gain in January, matching market expectations. It was the lowest inflation rate since September of 2016, as prices rose less for food and non-alcoholic beverages and household contents and services.

Year-on-year, cost increased less for: food and non-alcoholic beverages (9.9 percent from 11.4 percent in January), household contents and services (3.4 percent from 4.2 percent), alcoholic beverages and tobacco (2.8 percent from 3.5 percent), clothing and footwear (4.8 percent from 5.1 percent) and miscellaneous goods and services (7.4 percent from percent 7.7 percent).

Additional upward pressure came from: transport (7.2 percent from 6.7 percent), housing and utilities (5.6 percent, the same pace as in January), recreation and culture (3.7 percent, at the same pace as in January) and restaurants and hotels (6.4 percent from 6.2 percent).

On a monthly basis, consumer prices went up 1.1 percent after a 0.6 percent gain in a month earlier. Cost rose faster for miscellaneous goods and services (5 percent from 0.8 percent in January), health (3.8 percent after being flat in the previous month) and continued to rise for food and non-alcoholic beverages (0.7 percent from 1.6 percent) and transport (0.9 percent from 1.5 percent).

The core inflation which excludes prices of food, non-alcoholic beverages, petrol and energy fell to 5.2 percent from 5. percent in the previous month. It was the lowest core inflation since December of 2015.




Wednesday March 22 2017
Japan Trade Surplus Jumps 245% YoY In February
Ministry of Finance l Joana Taborda | joana.taborda@tradingeconomics.com

Japan recorded a JPY 813.4 billion trade surplus in February of 2017, higher than a JPY 235.5 billion surplus a year earlier and slightly below market expectations of JPY 822 billion. Exports jumped 11.3 percent year-on-year, better than expectations of a 10.6 percent rise and the biggest gain since January of 2015, boosted by sales to China. Imports increased 1.2 percent, also higher than forecasts of a 0.6 percent gain, mainly due to oil.

Exports reached JPY 6346.5 billion, boosted by sales of machinery (16.6 percent), electrical machinery (13.5 percent), chemicals (16.4 percent), parts of motor vehicles (21.8 percent), manufactured goods (6.7 percent) and scientific and optical instruments (23.4 percent). Shipments increased to the US (0.4 percent) and China (28.2 percent).
 
Imports came in at JPY 5533.1 billion, mainly due to mineral fuels (38.1 percent), namely petroleum (69.9 percent). Purchases from main partners decreased: China (-17.7 percent), Western Europe (-7.7 percent), the US (-0.7 percent) and ASEAN countries (-1.5 percent) but rose from the Middle East (46.4 percent).




Tuesday March 21 2017
Nigeria Leaves Monetary Policy Unchanged
Central Bank of Nigeria | Deborah Neves | deborah.neves@tradingeconomics.com

The Central Bank of Nigeria held its benchmark interest rate unchanged at 14 percent at its March 2017 meeting, as expected. The inflation rate eased slightly for the first time in fifteen months to 17.78 percent in February, but remained well above the central bank target of 10 percent by 2020. Also, the economy shrank 1.5 percent in 2016, the first annual contraction in 25 years.

Excerpts from the Statement by the Central Bank of Nigeria:

The Committee re-evaluated the implications for Nigeria of the continuing global uncertainties as reflected in the unfolding protectionist posture of the United States and some European countries; sustenance of the OPEC-Russian agreement to cut oil production beyond July 2017; sluggish global recovery and the strengthening U.S. dollar.

The Committee also evaluated other challenges confronting the domestic economy and the opportunities for achieving price stability, conducive to growth in 2017. In particular, the Committee noted the persisting inflationary pressures; continuing output contraction; high unemployment rate; elevated demand pressure in the foreign exchange market; low credit to the real sector and weakening financial system indicators, amongst others.

Nonetheless, members welcomed the improved implementation of the foreign exchange policy that resulted in naira’s recent appreciation. Similarly, the Committee expressed satisfaction on the release of the Economic Recovery and Growth Plan, and urged its speedy implementation with clear timelines and deliverables. On the strength of these developments, the Committee felt inclined to maintain a hold on all policy parameters.

Besides, the Committee noted the need to create binding restrictions on growth in narrow money and structural liquidity and the imperative of macroeconomic stability to achieving price stability conducive to growth.

The Committee noted the consecutive positive contribution of agriculture to GDP in Q4 2016, a development partly traceable to the Bank’s interventions in the sector. The Committee remains optimistic that, if properly implemented, the newly released Economic Recovery and Growth Plan (ERGP) coupled with innovative, growth-stimulating sectoral policies would help fast track economic recovery.

In summary, the MPC decided to:

(i)  Retain the MPR at 14 per cent;
(ii) Retain the CRR at 22.5 per cent;
(iii) Retain the Liquidity Ratio at 30.00 per cent;
(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.




Tuesday March 21 2017
Russia Jobless Rate Steady At 5.6% In February
Federal State Statistics Service | Yekaterina Gcuhshina | yekaterina@tradingeconomics.com

The unemployment rate in Russia remained unchanged at 5.6 percent in February of 2017 from the previous month and in line with market expectations. The jobless rate stayed at the highest since May 2016.

The number of unemployed people decreased by 62 thousand to 4.226 million. Compared to February of 2016, the number decreased by 3 thousand.    

The number of economically active people increased by 200 thousand to 76.1 million, representing 52 percent of total population. Compared to February of 2016, the figure remained unchanged. 

Real wages increased 1.3 percent year-on-year, following 3.1 percent rise in January and below market expectations of 2.8 percent. It was the lowest increase since October 2016. Nominal wages went up 6 percent to RUB 35,900 (8.3 percent in January) and real disposable income fell 4.1 percent, following a 8.1 percent jump in January.




Tuesday March 21 2017
Hong Kong Consumer Prices Fall For 1st Time In 7-1/2 Years
Census and Statistics Department | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Hong Kong fell by 0.1 percent year-on-year in February 2017, compared to a 1.3 percent rise in the previous month. It is the first decrease since August of 2009 due to several factors: difference in the timing of the Lunar New Year, which fell in late January this year but in early February last year; high base of comparison a year earlier when prices of basic foodstuffs surged because of bad weather conditions and downward adjustment in electricity charges. Taking the first two months of 2017 together to neutralise the effect of the Lunar New Year, consumer prices rose by 0.6 percent over a year earlier.

Year-on-year, decreases in prices were recorded for electricity, gas and water (-7.5 percent vs -7.6 percent in January); food (excluding meals bought away from home) (-3.7 percent vs 2.3 percent); durable goods (-3.7 percent vs -3.9 percent); clothing and footwear (-3.3 percent vs -2.9 percent) and miscellaneous services (-1.1 percent vs 3.6 percent). In contrast, increases were seen for transport (3.1 percent vs 2.4 percent), meals bought away from home (2.8 percent vs 3.1 percent), alcoholic drinks and tobacco (2.7 percent vs 1.6 percent) and miscellaneous goods (2.5 percent vs 2.4 percent).

Underlying consumer prices, which exclude the effects of one-off government relief measures went up 0.7 percent compared to 2.1 percent in January as the difference in the timing of the Lunar New Year resulted in lower charges for package tours. Another downward pressure came from falling prices of fresh vegetables.




Tuesday March 21 2017
UK Inflation Rate At 3-1/2-Year High Of 2.3%
ONS | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in the United Kingdom increased 2.3 percent year-on-year in February of 2017, above 1.8 percent in January and beating expectations of 2.1 percent. It is the highest inflation rate since September of 2013, boosted by rising fuel prices while food cost increased for the first time in 34 months.

Year-on-year, main upward pressure came from prices of transport (6.9 percent compared to 5.7 percent in January); housing and utilities (0.7 percent compared to 0.6 percent); recreation and culture (1.6 percent compared to 0.9 percent); restaurants and hotels (3.2 percent compared to 3 percent); food and non-alcoholic beverages (0.2 percent compared to -0.5 percent) and miscellaneous goods and services (1.1 percent compared to 0.8 percent). In contrast, cost of clothing and footwear edged down 0.1 percent (after being flat in January). 

On a monthly basis, consumer prices jumped 0.7 percent, following a 0.5 percent drop in January and above market expectations of 0.5 percent. The largest upward effect came from transport (1.2 percent compared to -0.6 percent in January), namely motor fuels, second-hand cars, sea and coach fares; recreation and culture (0.5 percent compared to -0.7 percent), namely personal computers including laptops and tablets; food (0.8 percent compared to 0.2 percent). 

The core index which excludes prices of energy, food, alcohol and tobacco increased 2 percent on the year, higher than 1.6 percent in the previous two months and above expectations of 1.8 percent.