Wednesday May 24 2017
Canada Maintains Key Rate At 0.5%
Bank of Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The Bank of Canada held its overnight rate steady at 0.5 percent on May 23rd, 2017, saying inflation is broadly in line with projections and recent economic data have been encouraging. The decision came in line with market expectations. The Bank Rate was also left on hold at 0.75 percent and the deposit rate at 0.25 percent.

Statement by the Bank of Canada:

Inflation is broadly in line with the Bank’s projection in its April Monetary Policy Report (MPR). Food prices continue to decline, mainly because of intense retail competition, pushing inflation temporarily lower. The Bank’s three measures of core inflation remain below two per cent and wage growth is still subdued, consistent with ongoing excess capacity in the economy.

The global economy continues to gain traction and recent developments reinforce the Bank’s view that growth will gradually strengthen and broaden over the projection horizon. As anticipated, growth in the United States during the first quarter was weak, reflecting mostly temporary factors. Recent data point to a rebound in the second quarter.  The uncertainties outlined in the April MPR continue to cloud the global and Canadian outlooks.

The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions. Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets. Meanwhile, export growth remains subdued, as anticipated in the April MPR, in the face of ongoing competitiveness challenges. The Bank’s monitoring of the economic data suggests that very strong growth in the first quarter will be followed by some moderation in the second quarter.

All things considered, Governing Council judges that the current degree of monetary stimulus is appropriate at present, and maintains the target for the overnight rate at 1/2 per cent.




Wednesday May 24 2017
South Africa Inflation Rate Down To 2015 Low Of 5.3%
Statistics South Africa | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in South Africa rose 5.3 percent year-on-year in April of 2017, easing from a 6.1 percent increase in March and below market expectations of 5.6 percent. It is the lowest inflation rate since December of 2015, mainly due to a slowdown in prices of food and transport.

Year-on-year, prices rose at a slower pace for food and non-alcoholic beverages (6.7 percent from 8.7 percent in March), the lowest since December of 2015; miscellaneous goods and services (7.3 percent from 7.5 percent); transport (4.6 percent from 7.7 percent); alcoholic beverages and tobacco (2.9 percent from 3.2 percent); household contents (2.8 percent from 3.2 percent); recreation and culture (3.6 percent from 3.7 percent) and clothing and footwear (4 percent from 4.5 percent). In contrast, inflation was steady for housing and utilities (5.7 percent) and education (7 percent) and increased for restaurants and hotels (6.4 percent from 6.1 percent) and health (6.5 percent from 6.2 percent). 

Annual core inflation which excludes cost of food, non-alcoholic beverages, petrol and energy fell to 4.8 percent from 4.9 percent. It is the lowest rate since January of 2013.

On a monthly basis, consumer prices edged up 0.1 percent, below 0.6 percent in March and lower than expectations of 0.4 percent. The only upward contribution came from prices of miscellaneous goods and services (prices up 0.4 percent). In contrast, cost of food and housing and utilities was flat and transport declined 0.3 percent. 




Wednesday May 24 2017
Thailand Holds Key Interest Rate At 1.5%
Bnak of Thailand | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Thailand held its benchmark interest rate at 1.5 percent on May 24th, as widely expected. Policymakers said that the Thai economy’s growth outlook improved further despite uncertainties on the external front and that demand-pull inflationary pressures were low, while overall financial conditions remained accommodative and conducive to economic expansion.

Statement by the Bank of Thailand:

In deliberating their policy decision, the Committee assessed that the Thai economy’s growth outlook improved further despite facing risks especially on the external front. Headline inflation softened and might fall below the target in some periods mainly due to supply side factors. Nevertheless, it was projected to rise during the latter half of the year. Meanwhile, overall financing conditions remained accommodative and conducive to economic growth. Hence, the Committee decided to keep the policy rate unchanged at this meeting.

Further improvement in the growth outlook was attributed to the continued recovery in merchandise exports as Thailand’s trading partner economies gained momentum. In addition, private consumption picked up somewhat supported by improved farm income and consumer confidence. Tourism continued to recover as expected, and public expenditure remained an important growth driver. Meanwhile, private investment was projected to slowly recover. However, the improved growth outlook was still subjected to risks that warranted close monitoring. These included US economic and foreign trade policies, China’s economic structural reforms, and geopolitical risks.

Headline inflation turned out softer than expected on account of lower fresh food prices due to this year’s higher agricultural output and last year’s base effects following the drought. Meanwhile, demand-pull inflationary pressure remained low. Nevertheless, headline inflation was expected to gradually rise in the latter half of the year, and the public’s medium-term inflation remained close to the midpoint of the target.

Overall financial conditions remained accommodative and conducive to economic growth with ample liquidity in the financial system and low real interest rates. Meanwhile, business financing through both credit and capital markets continued to expand. With regard to exchange rates, movements in the baht over the recent period were in line with regional currencies.

The Committee viewed that financial stability remained sound with sufficient cushion against economic and financial volatilities on both domestic and external fronts. However, there remained pockets of risks that warranted close monitoring such as the deterioration in debt serviceability of small-and-medium sized enterprises (SMEs) which in part reflected competitiveness issues. Moreover, the search-for-yield behavior in the prolonged low interest rate environment continued to warrant monitoring as it could lead to underpricing of risks.

Looking ahead, the Thai economy’s growth outlook improved further despite uncertainties on the external front. Meanwhile, demand-pull inflationary pressures remained low. Thus, the Committee viewed that monetary policy should remain accommodative, and would stand ready to utilize available policy tools to sustain economic growth while also ensuring financial stability.




Tuesday May 23 2017
New Zealand Trade Surplus Widens In April
Mario | mario@tradingeconomics.com

New Zealand trade surplus widened to NZD 578 million in April of 2017 compared to NZD 350 million in the same month of the previous year and expectations of a NZD 267 million surplus. It was the second straight monthly surplus after 8 consecutive deficits. Exports advanced to NZD 4750 million (or 9.8 percent year-on-year from a downwardly revised 9.6 percent in March), while imports jumped to NZD 4172 million (or 4.9 percent compared to an upwardly revised 7.9 percent). The annual trade deficit for the year ended April 2017 was NZD 3.48 billion, compared with a NZD 3.71 billion gap in the year ended March 2017.

The 9.8 percent year-on-year jump in exports was mainly explained by a 35.4 percent surge in exports of milk powder, butter & cheese (compared to 29.0 percent in the previous month). Logs, wood & wood articles climbed 17.7 percent after advancing 10.1 percent in March. Exports to China increased at a softer pace of 22.5 percent in April after surging 43.5 percent in the previous month. Shipments to Japan also grew at a softer rate, increasing by 12.7 percent (versus 18.8 percent). Contrastingly, exports to Korea advanced at a faster pace of 15.4 percent (compared to 6.2 percent), while shipments fell to the European Union (-7.8 percent), the United States (-5.3 percent), and Australia (-0.6).

Meanwhile, the 4.9 percent year-on-year climb in imports was mainly triggered by a 21.2 percent surge in petroleum & products, following a 6.2 percent contraction in the previous month. Imports of vehicles, parts, and accessories expanded at a softer pace of 8.1 percent (compared to 28.1 percent in March). Imports from Japan rose at a weaker rate of 3.5 percent after surging 28.8 percent in the previous month. Imports from the United States declined 4.5 percent after climbing 11.1 percent in March. 




Tuesday May 23 2017
Nigeria Is Expected To Return To Growth In 2017
Joana Taborda | joana.taborda@tradingeconomics.com

The Nigerian economy contracted in 2016 for the first time in 25 years after militant attacks in the Niger River delta destroyed oil pipelines and slump in oil prices led to a decline in government revenues and a shortage of foreign reserves. The economy is expected to slowly return to growth in 2017, boosted by public investment in roads, rails, ports and the power sector and higher oil production after peace talks between the government and militant groups started this year.

Recent data suggests the Nigerian economy has bottomed out although the GDP shrank 0.52 percent year-on-year in the first three months of 2017. It was the smallest contraction in five quarters as the non-oil sector rose 0.72 percent, rebounding from a 0.33 percent drop in the previous period, boosted by a recovery in transportation, manufacturing and construction. The oil sector continued to decline but at a slower pace (-11.64 percent vs -17.7 percent in Q4) as average crude oil production rose by 0.07 million barrels per day to 1.83 million, first increase in 2 years. Yet, Nigeria's refineries processed 10 million barrels of crude oil in the first quarter, compared to 24 million in full 2016.

In addition, non-oil sector is recovering. After reaching record low of 41.9 in June of 2016, the manufacturing PMI rose to 51.1 in April of 2017 showing first expansion in factory activity so far this year. Also, the non-manufacturing PMI came in at 49.5 in April, pointing to the smallest contraction in services in sixteen straight months, as business activity and new orders rebounded and employment fell less.

Also, the inflation slowed to 17.24 percent in April, the lowest in nine months. The inflation rate spiked to double digits in 2016 after the naira slumped to record lows against the USD on lower oil prices and as the foreign exchange reserves dropped to 10-year low as the central bank tried to protect the currency. As a result, the central bank hiked the key rate two times by a total of 300bps to 14 percent. However, following the recovery in oil prices, foreign exchange reserves rose to USD 30.80 billion in April, the highest level since September of 2015. Thanks to higher oil revenues, the central bank has been able to boost foreign exchange supply in the economy and created a multiple exchange rate system, aiming to improve dollar supply and trading it at a more market-determined rate. As a result, the naira stabilized and the spread between the official rate and unofficial one has been narrowing. 




Tuesday May 23 2017
Nigeria Holds Key Rate At 14%
Central Bank of Nigeria | Joana Taborda | joana.taborda@tradingeconomics.com

The Central Bank of Nigeria held its benchmark interest rate unchanged at 14 percent at its May 2017 meeting as inflationary pressures start to ease while the economy remained in recession for the fifth quarter in the first three months of 2017. The decision came in line with market expectations.

Excerpts from the Statement by the Central Bank of Nigeria:

Available data and forecasts of key economic variables as well as the newly released Federal Government?s Economic Recovery and Growth Plan (ERGP), indicate prospects of output recovery in 2017. The Committee expects that the implementation of this plan, the new foreign exchange policy as well as the current effort by the Federal Government to restore peace in the Niger Delta region would help revive economic growth and stabilize prices. The Committee identified the downside risks to this outlook to include the possibility of a slower-than-expected rate of global economic activity, tight monetary policy stance by the U.S. Fed, resulting in strengthening U.S dollar, and low oil prices.

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. 

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 May 23 2017
US New Home Sales Down To 4-Month Low
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses in the United States slumped 11.4 percent to a seasonally adjusted annual rate of 569 thousand in April of 2017 from an upwardly revised near 9-1/2-year high of 642 thousand in March. The figure came below market expectations of 610 thousand, as sales fell in all four main regions.

Sales declined the most in the West (-26.3 percent to 126 thousand), followed by the Midwest (-13.1 percent to 73 thousand), the Northeast (-7.5 percent to 37 thousand) and the South (-4 percent to 333 thousand).

The median sales price of new houses sold was $309,200 lower than $318,700 in the previous month. The average sales price was $368,300 below $385,400 in March.

The stock of new houses for sale went up to 268 thousand from 264 thousand in March. This represents a supply of 5.7 months at the current sales rate.

Year-on-year, new home sales rose 0.5 percent.




Tuesday May 23 2017
US Factory Activity Growth At 8-Month Low: Markit
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The IHS Markit US Manufacturing PMI fell to 52.5 in May of 2017 from 52.8 in April, below market expectations of 53, flash figures showed. It is the lowest reading since September of 2016, driven by softer growth of output, new orders and employment.

Production volumes have increased in each month since June 2016, but the rate of expansion eased further from the peak seen at the start of 2017. Some manufacturers suggested that domestic clients had adopted a wait-and-see approach to investment spending. Meanwhile, new export sales increased only marginally in May, which pointed to a sustained drag from subdued external demand.

More cautious inventory policies were recorded across the manufacturing sector, with stocks of purchases falling at the most marked pace since September 2016. This was achieved through a further slowdown in growth of input buying in May. Meanwhile, job creation eased since April and remained only modest.

The latest survey highlighted a sharp slowdown in input price inflation from the 31-month peak seen during April. Moreover, the latest rise in input costs was the least marked since November 2016. Softer cost pressures resulted in the weakest increase in factory gate prices for three months in May.




Tuesday May 23 2017
Nigerian Economy Contracts The Least In 1 Year
National Bureau of Statistics | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The GDP in Nigeria shrank 0.5 percent year-on-year in the first quarter of 2017, following an upwardly revised 1.7 percent decrease in the previous period. It is the smallest fall in five quarters of contraction, as oil sector continued to decline although at a slower pace.

The oil sector went down 11.64 percent year-on-year, following an upwardly revised 17.7 percent drop in the previous period and marking the fifth consecutive quarter of falls. The country produced 1.8 million barrels of crude oil per day, down from 2.1 mbpd a year earlier. As a result, oil sector accounted for 8.90 percent of the GDP compared to 10.02 percent a year earlier.

The non-oil sector advanced 0.72 percent, following a 0.33 percent contraction in the previous period. Ouput rebounded significantly for transport (10.55 percent vs -5.32 percent in Q4), manufacturing (1.36 percent vs -2.54 percent in Q4) and construction (0.15 percent vs -6.03 percent in Q4). In addition, production grew faster for information and communication (2.73 percent vs 1.38 percent in Q4), water supply, sewerage, waste management and remediation (12.63 percent vs 10.76 percent in Q4) and fell less for real estate activities (-3.10 percent vs -9.27 percent in Q4), electricity, gas, steam and air conditioning (-5.04 percent vs -5.16 percent in Q4) and mining (-11.46 percent vs -17.26 percent in Q4). Meanwhile, financial and insurance (0.67 percent vs 2.68 percent in Q4) and agriculture (3.39 percent vs 4.03 percent in Q4) rose less and trade continued to shrank (-3.08 percent vs -1.44 percent in Q4). The non-oil sector accounted for 91.10 percent of the GDP, up from 89.98 percent in the first quarter of 2016.

On a quarterly basis, the economy slipped 12.9 percent compared to a downwardly revised 3.75 percent expansion in the previous quarter.




Tuesday May 23 2017
Hong Kong Inflation Rate At 7-Month High Of 2% In April
Yekaterina | yekaterina@tradingeconomics.com

Consumer prices in Hong Kong increased 2 percent year-on-year in April of 2017, compared to a 0.5 percent rise in the prior month. It was the highest inflation rate since September last year, mainly driven by prices of housing, transport, miscellaneous goods and services and food, excluding meals bought away from home.

Year-on-year, prices recovered rose faster for housing (2.7 percent vs 0.1 percent in March), miscellaneous goods and services (2.7 percent vs 1.1 percent), alcoholic drinks and tobacco (3.4 percent vs 2.5 percent), food (excluding meals bought away from home) (0.3 percent vs -1.6 percent), transport (3.4 percent vs 3.2 percent). Meanwhile, prices fell for (-3 percent vs -3.1 percent) and electricity, gas and water (-1.2 percent, the same pace as in March) and clothing and footwear (-1.7 percent vs 0.4 percent).

Underlying consumer prices, which exclude the effects of one-off government relief measures went up 2 percent compared to 1.3 percent rise in March.




Tuesday May 23 2017
Spain Trade Gap Widens In March
Mineco | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The trade gap in Spain increased to EUR 1.5 billion in March of 2017 from a EUR 0.8 billion deficit a year earlier. Exports jumped 16.9 percent to a record high of EUR 26.2 billion and imports rose at a faster 19.1 percent to all-time high of EUR 27.7 billion.

Exports went up 16.9 percent to a record high of EUR 26.2 billion, driven by sales of energy (52.6 percent); equipment (15.4 percent), food, beverages and tobacco (15.6 percent), autos (9.9 percent) and chemicals (15.3 percent). Exports increased to the European Union (14.5 percent), namely Italy (23.4 percent), France (11.6 percent) and Germany (14.2 percent). Outside the EU, shipments rose the most to the US (39.8 percent), China (35.5 percent), Japan (11.6 percent), Brazil (22.4 percent), Mexico (15.2 percent), Saudi Arabia (13.4 percent) and Australia (18.6 percent).

Imports advanced 19.1 percent to all-time high of EUR 27.7 billion, mainly led by purchases of energy (52.1 percent), equipment goods (17.4 percent), chemicals (18.9 percent),  non-chemical semi-manufactures (26.8 percent), autos (13.9  percent) and raw materials (44.4 percent). Imports increased to the European Union (14.4 percent), namely Italy (27.9 percent), France (9.7 percent), Germany (15.8 percent). Outside the EU, shipments rose the most to the US (30 percent), Turkey (27.4 percent), Japan (17.2 percent), Brazil (28.4 percent), Mexico (61.4 percent).

Spain recorded a EUR 1.9 billion trade surplus with the EU, higher than a EUR 1.6 billion surplus a year earlier. With non-EU countries, the trade deficit rose 37.8 percent year-on-year to EUR 3.3 billion.




Tuesday May 23 2017
Switzerland Trade Surplus Narrows To Near 2-1/2 Year Low
Swiss Customs Administration l Chusnul Ch Manan| chusnul@tradingeconomics.com

Switzerland trade surplus decreased to CHF 1.97 billion in April of 2017 from CHF 2.42 billion a year earlier as exports fell more than imports. Year-on-year, sales went down by 10.4 percent to CHF 16.15 billion while purchases fell 9.1 percent to CHF 14.18 billion.

Year-on-year, sales went down by 10.4 percent to CHF 16.15 billion, due to a decrease in sales of metals (-4.9 percent), pharmaceuticals (-11.5 percent), machinery and electronics (-12.6 percent), watches (-5.7 percent), precision instruments (-13.1 percent), jewelry and bijouterie (-6.6 percent), food, beverages and tobacco (-5.9 percent), plastics (-17.1 percent), and vehicles (-20.6 percent). In contrast, exports increased for: textiles, clothing and footwear (6 percent) and paper and graphic products (4.0 percent). 

Among major trade partners, sales decreased to: the EU countries (-11.5 percent), Japan (-9.1 percent), Hong Kong (-11.60 percent), the US (-11.0 percent), South Africa (-35.5 percent), Singapore (-2.8 percent), South Korea (-7.7 percent), India (-7.7 percent),  Australia (-0.1 percent), the Middle east (-25.7 percent), Indonesia (-21.9 percent), Brazil (-12.0 percent), Nigeria (-24.3 percent), and Egypt (-36.3 percent).

In contrast, sales went up to China (9.0 percent) and Canada 12.8 percent).

Purchases fell 9.1 percent to CHF 14.18 billion, due to a decrease in purchases of plastics (-9.5 percent), machinery and electronic (-9 percent), metals (-5.4 percent), watches (-25.4 percent), food, beverages and tobacco (-4.6 percent), chemicals and pharmaceuticals (-15.7 percent), paper and graphic products (-11.5 percent), jewelry and bijouterie (-14.5 percent), and vehicles (-2.3 percent).

In contrast, import rose for: energy products (15.2 percent) and textiles, clothing and footwear (2.6 percent).

In March 2017, trade surplus was registered CHF 3.10 billion.
 




Tuesday May 23 2017
German GDP Growth Confirmed At 1-Year High In Q1
Destatis l Rida Husna | rida@tradingeconomics.com

The German economy expanded a seasonally-adjusted 0.6 percent in the first quarter of 2017, following a 0.4 percent growth in the previous period and matching the preliminary estimate. It was the strongest rate of expansion since the first quarter of 2016, supported by both domestic and foreign demand.

From the expenditure side, the positive contribution to GDP came from net exports (0.4 percentage points), fixed investment (0.3 percentage points), household consumption (0.2 percentage points) and government spending (0.1 percentage point). In contrast, changes in inventories subtracted 0.4 percentage points from growth.

Quarter-on-quarter, exports rose 1.3 percent (1.7 percent in Q4 2016) while imports also went up at a much slower 0.4 percent (2.5 percent in Q4).

Gross fixed capital formation went up 1.7 percent (0.4 percent in Q4), as construction investment increased by 2.3 percent (0.8 percent in Q4), due to mild weather. Also, investment in machinery and equipment grew by 1.2 percent, rebounding from a 0.1 percent fall in the prior quarter, and investment in other products expanded by 0.8 percent, stronger than a 0.3 percent rise in the preceding three months.

Private consumption rose 0.3 percent (0.2 percent in Q4), and government spending advanced 0.4 percent (0.3 percent in Q4). 

Year-on-year, the GDP advanced 1.7 percent, following a 1.8 percent growth in the previous three months. On a non-seasonally adjusted basis the economy grew 2.9 percent year-on-year (1.3 percent in Q4) mainly boosted by a jump in gross fixed capital formation (3.4 percent from -0.4 percent in Q4), as investment rose for construction (4.7 percent from 0.4 percent in Q4), machinery and equipment (2 percent from -2.6 percent in Q4) and other products (2.5 percent, the same as in Q4). Household spending expanded 1.6 percent (the same as in Q4) and government spending rose 1.5 percent (from 2.7 percent in Q4). Also, net external demand contributed positively, as exports went up 6.6 percent while imports advanced at a slower 5.6 percent.





Tuesday May 23 2017
Singapore Inflation Rate At 4-Month Low of 0.4%
Statistics of Singapore l Chusnul Ch Manan| chusnul@tradingeconomics.com

Consumer prices in Singapore rose 0.4 percent year-on-year in April of 2017, compared to a 0.7 percent rise in March and below market expectations of 0.7 percent gain. It was the lowest inflation rate since December 2016, mainly driven by lower cost of housing. In contrast, prices accelerated for food and transport. On a month-on-month basis, consumer prices fell 0.3 percent, compared to a flat reading in March.

Year-on-year, prices rose for:  clothing & footwear (0.5 percent from -0.2 percent in the prior month), household durables & services (0.8 percent from 1.6 percent, largely due to a  1.9 percent increase in household services & supplies); health care (3.0 percent from 2.8 percent, mainly driven by a 3.6 percent rise in medical & dental treatment and a 0.8 percent gain in medical products, appliances & equipment); transport (4.7 percent from 4.5 percent, mainly due to a 7.0 percent rise in private road transport and a 1.4 percent rise in other travel & transport); recreation & culture (0.3 percent from 0.3 percent, largely due to a 0.2 percent increase in newspapers, book & stationery and a 1.0 percent growth in holiday expenses); education (3.2 percent from 3.6 percent, due to a 3.2 percent rise in tuition & other fees and a 0.1 percent increase in school textbooks & related study guides) and miscellaneous goods & services (0.1 percent from 0.2 percent. In contrast, cost of housing & utilities  fell 4.6 percent, faster than a -3.2 percent drop in March, largely due to a 6.7 percent drop in accommodation).
 
Prices of food rose 1.3 percent in April, the same as in the previous two months. Among food excluding food servicing services, cost increased for bread & cereals (0.3 percent); fish & seafood (3.5 percent); milk, cheese & eggs (1.1 percent); fruits (2.1 percent); sugar, preserves & confectionery (0.9 percent); other food (1.7 percent), and meat (0.5 percent ).
 
In contrast, prices fell for oils & fats (-1.9 percent), vegetables (-0.1 percent), and non-alcoholic beverages (-0.6 percent). Among food servicing services, prices increased for all categories: restaurant foods (1.2 percent), fast food (0.9 percent), hawker food including food courts (1.7 percent) and catered food (1.7 percent).
 
Core consumer prices, which exclude costs of accommodation and private road transport, went up 1.7 percent year-on-year, compared to a 1.2 percent rise in the prior month and above market expectations of 1.3 percent rise. It was the highest figure since October 2014. 
 
On a month-on-month basis, consumer prices decreased 0.3 percent, compared to a flat reading in March.




Monday May 22 2017
Russia Jobless Rate Unexpectedly Falls To 5.3% In April
Federal State Statistics Service | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The unemployment rate in Russia declined to 5.3 percent in April of 2017 from 5.9 percent in the same month a year ago and well below market expectations of 5.5 percent. It was the lowest jobless rate since December last year. The number of unemployed people decreased by 470 thousand to 4.050 million while the number of economically active people fell by 400 thousand to 75.9 million, representing 52 percent of total population.

The number of unemployed people decreased by 470 thousand to 4.050 million. Compared to March, the number decreased by 59 thousand.    

The number of economically active people decreased by 400 thousand to 75.9 million, representing 52 percent of total population. Compared to March, the figure remained unchanged.

Real wages increased 2.5 percent year-on-year, following an upwardly revised 3.5 percent rise in March and above market expectations of 1.7 percent. Nominal wages went up 6.7 percent to RUB 37,311 (7.6 percent in March) while real disposable income fell 7.6 percent (-2.3 percent in March).




Monday May 22 2017
Mexico GDP Growth At 1-1/2-Year High In Q1
Joana Taborda | joana.taborda@tradingeconomics.com

The Mexican economy expanded a non-seasonally adjusted 2.8 percent year-on-year in the first quarter of 2017, higher than 2.7 percent in the preliminary reading and above a downwardly revised 2.3 percent increase in the previous period. It is the biggest growth rate in six quarters as services grew further and industrial output rebounded, final figures showed.

The services sector advanced 3.7 percent, faster than 3.4 percent in the fourth quarter and in line with preliminary figures. Industrial production went up 0.5 percent, above 0.2 percent earlier estimated and following a 0.1 percent drop in the previous period. Agriculture jumped 6.6 percent, above 5.3 percent in the fourth quarter but lower than 6.9 percent in the preliminary reading.

On a quarterly basis, the economy grew a seasonally adjusted 0.7 percent, the same as in Q4 and better than initial estimates of 0.6 percent. 




Monday May 22 2017
Mexico GDP Growth Revised Up to 0.7% In Q1
Joana Taborda | joana.taborda@tradingeconomics.com

The Mexican economy expanded 0.7 percent on quarter in the first three months of 2017, higher than 0.6 percent in the preliminary estimate and the same as in the previous period. Agriculture and industry expanded more than expected, final figures showed. Yet, the Mexican economy’s fundamentals look stronger than anticipated after an initial shock triggered by the US presidential election sent investment and consumer sentiment to record-low levels in January, worsening the growth outlook. However, investment has been hurt by uncertainty surrounding US and Mexico relations and industrial output remains subdued.

Services rose 1 percent, higher than 0.9 percent in the previous period and in line with earlier estimates. The agricultural sector expanded 1.1 percent, above 0.6 percent in the last three months of 2016 and better than preliminary figures of 0.7. Industrial output edged up a meager 0.1 percent for the third quarter, although better than a flat reading initially estimated. 

As President Trump’s rhetoric on NAFTA and proteccionism moderates, the Mexican peso recovered to pre-US election levels and exports, car production and private spending continue to support growth. However, private and public investment remain subdued amid uncertainty over bilateral relationship between Mexico and the United States. Yet, industrial production remains weak, with the manufacturing PMI falling to 50.7 from 51.5 in April. Political risk between US and Mexico is far from gone as President Trump already informed the US Congress he wants to start renegotiating the NAFTA deal as soon as in August. The United States are Mexico's main export partner, accounting for more than 80 percent of total exports and around half of cars exported. 

On a yearly basis, the GDP advanced 2.8 percent, above 2.7 percent in the preliminary reading. 




Monday May 22 2017
Japan Trade Surplus Narrows 40.6% YoY In April
Ministry of Finance l Rida Husna | rida@tradingeconomics.com

Japan's trade surplus narrowed 40.6 percent to JPY 481.7 billion in April 2017 from JPY 811.2 billion a year earlier and below market consensus of a JPY 520.7 billion surplus. It was the smallest trade surplus since January, as exports rose less than imports.

In April, sales increased by 7.5 percent from a year earlier to JPY 6,329.2 billion, compared to a 12.0 percent gain in a month earlier while market expected a 7.8 percent rise. It was the fifth straight month of increase, as sales of machinery grew 11.3 percent, boosted by power generating machine (16.4 percent) and semicon machinery (29.9 percent). Also, exports of chemicals rose 10.8 percent; and those of manufactured goods went up 7.1 percent, led by iron and steel products (18.1 percent). Exports of electrical machinery advanced 6.7 percent, due to higher sales of semiconductors (11.1 percent) and electrical apparatus (14 percent). In addition, exports of transport equipment went up 1.3 percent, as sales of motor vehicles rose 1.8 percent.

Among major trading partners, exports rose to China (14.8 percent), the US (2.6 percent), the EU (2.2 percent), South Korea (22.3 percent), Taiwan (14.7 percent), Hong Kong (3.2 percent) and Thailand (8.4 percent).

Imports jumped 15.1 percent to JPY 5,847.4 billion, following a 15.8 percent rise in the prior month and faster than estimates of a 14.8 percent growth. Purchases rose for all categories: Mineral fuels (58.7 percent); foodstuff (6.6 percent); raw materials (13.2 percent); chemicals (3.7 percent); manufactured goods (8.0 percent); machinery (5.3 percent), electrical machinery (16.0 percent), transport equipment (1.6 percent) and others (1.7 percent).

Among major trading partners, imports rose from China (7.5 percent), the US (9.8 percent), the EU (5.4 percent), South Korea (16.8 percent) and Taiwan (4.4 percent).




Friday May 19 2017
Week Ahead
Joana Taborda | joana.taborda@tradingeconomics.com

Next week, the most important event is the release of FOMC minutes. Investors will be looking for further clues on the timing of Fed's next rate hike. Markets are also anticipating a small upward revision to 0.9% from 0.7% in the second estimate of US GDP growth for Q1.

Other important releases for the US include the activity indexes for Chicago and the 5th district; new home sales; existing home sales; house price index, durable goods, the final figure for the Michigan consumer sentiment and the flash Markit PMIs. Flash PMI figures will also be released for France, Germany, Euro Area and Japan. In Japan, important releases include trade figures with markets expecting a slowdown in both exports and imports while inflation is seen edging up. In Europe, Germany will release final GDP growth estimates for Q1 and business and consumer confidence. The UK will also publish the second GDP growth figure and first readings for business investment. Other releases include monetary policy decisions for Canada and South Africa with markets anticipating no changes in current policy stance. Next week will also provide a deeper update on the Mexican economy with the releases for GDP growth in Q1 (final figures), retail sales, external trade and unemployment.





Friday May 19 2017
Canada Inflation Rate Steady At 1.6% In April
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 1.6 percent year-on-year in April of 2017, the same as in the previous month and below expectations of 1.7 percent. Prices of energy, transportation and shelter showed the highest upward pressure while food cost continued to decline although at a slower pace.

Year-on-year, transportation cost rose 4.2 percent, after increasing 4.6 percent in March. This deceleration was led by the purchase of passenger vehicles index. Gasoline prices posted a 15.9 percent  increase, slightly larger than the 15.2 percent rise registered in March. 

Shelter costs went up 2.2 percent, matching the increases in February and March. The homeowners' replacement cost index (+3.9 percent) was the main upward contributor, despite slowing growth since November 2016. Prices for natural gas (+15.2 percent,) rose for the fourth consecutive month. Conversely, electricity prices posted their fourth consecutive decline, down 1.3 percent.

The recreation, education and reading index grew 3.3 percent, following a 3.6 percent, increase in March. The travel tours index added 9.4 percent,, contributing the most to the rise. Traveller accommodation costs were up 5.7 percent after rising 1.4 percent. At the same time, the video equipment index fell 8.8 percent. Prices for video and audio subscription services rose less in the year to April than in the 12-months to March.

The household operations, furnishings and equipment index rose 0.5 percent following no change in March. This acceleration was mainly attributable to a 3.8 percent, month-over-month rise in the prices of telephone services, as new product introductions affected the price of service plans.

The food index declined 1.1 percent, following a 1.9 percent drop in March and marking the seventh month of falling food cost.

On a monthly basis, consumer prices went up 0.4 percent, above 0.2 percent in March. Gasoline prices jumped 9.5 percent, partly due to supply disruptions at oil refineries, as they changed over to summer fuel blends.

The core index rose was unchanged on the month and rose 1.1 percent on the year, below 1.3 percent in March. It is the lowest annual core inflation since November of 2013.