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| Please find below commentaries from Markit economists. |
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UK inflation moves back up to 2.7%
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| 18 June 2013 |
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| UK inflation rose more than expected in May, acting as a reminder that the ongoing erosion of spending power from rising prices will continue to act as a brake on economic recovery. |
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UK: Construction output rise adds to signs of economy gaining momentum
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| 14 June 2013 |
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| UK construction industry data for April showed the smallest year-on-year decline since output began falling at the start of last year. Our seasonal adjustment of the data also suggests that output rose compared with March, adding to evidence that the economy picked up further momentum in the spring. |
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Week Ahead Economic Overview [17-21 Jun]: Flash PMIs updated for the US, China and the eurozone
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| 13 June 2013 |
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| We calculate the flash PMI data for June next week, publishing the results on Thursday for China, the eurozone and the US. May data showed China’s manufacturing PMI slipping below the 50.0 no-change level for the first time in seven months, but the eurozone’s downturn showed signs of easing. The region’s recession, nevertheless, looks likely to have dragged on for a seventh successive quarter. In the US, the manufacturing sector has meanwhile seen growth slow sharply compared to the strong growth seen in the first quarter. |
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UK labour market gains add to economic recovery signs
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| 12 June 2013 |
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| More signs of the UK economic recovery gaining traction were provided by a further upturn in the labour market. Unemployment has fallen to its lowest in two years, employment rose to a new high, pay growth has picked up modestly and job vacancies have shown the largest increase since late-2010, hitting the highest since December 2008. |
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Economic Momentum & Equity Returns: Forecasting relative sector performance with PMI sector data
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| 11 June 2013 |
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| PMI data is used by economists to gain insight into underlying condition activity at a quicker timescale than equivalent official data. But could the data also contain valuable information to guide investors in the financial markets? We investigate by using top level figures from new PMI data for the European Union to create a scoring system designed to measure changes in momentum across 16 sectors on a monthly basis. |
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New sector PMI data highlight global growth drivers and laggards
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| 11 June 2013 |
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| Markit’s newly released sector PMI data signalled that finance-related sectors and industrial goods and services drove global economic expansion in May, while producers of basic materials and telecommunication services acted as a drag on the pace of worldwide economic growth. |
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Growth in autos output slows in May
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| 11 June 2013 |
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| New detailed Markit Global Sector PMI data pointed to a slowdown in the rate of expansion of production at automobiles & auto parts manufacturers worldwide in May. After having accelerated to the fastest in more than two years at the start of the second quarter, growth of output at autos firms slowed sharply to only a mild pace. Nevertheless, production levels have now risen for three months in succession, representing a marked improvement on the decline seen over eight of the prior nine months. |
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UK production growth strengthens to highest for almost three years
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| 11 June 2013 |
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| UK industrial production grew at the fastest rate for almost three years in the three months to April, helping to drive an increased rate of economic growth in the UK in the second quarter. Further stimulus from the Bank of England therefore looks increasingly unlikely, with new Governor Mark Carney taking the helm of an economy that is on a rising tide. |
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Global Financials PMI: Financial industry leads global expansion in May
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| 11 June 2013 |
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| Global financial activity increased at the strongest pace for over a year in May, according to newly-launched Markit Global Sector PMI data. The strong rate of expansion, which was the fastest of the eight major industry categories covered by the PMI, was fuelled by companies reporting the largest inflow of new business since February 2012. |
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Global Basic Materials PMI: Output falls in May
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| 11 June 2013 |
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| Markit’s newly released global sector PMI data signalled that output of basic materials declined slightly in May, following a similarly mild contraction in April. Of the eight broad industry groups covered by the PMIs, basic materials was unusual in being the only sector to see a drop in activity with the exception of the smaller telecommunication services industry. |
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EU sector data point to broad-based improvement in output trends
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| 11 June 2013 |
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| Detailed sector PMI data for Europe showed a general improvement in output trends in May. Eight out of the 22 most narrowly defined sectors monitored by PMI data posted growth in output, led by a solid expansion in automobiles & auto parts. The increase in output among autos firms and auto parts suppliers was the first for 14 months, behind which was the sharpest rise in new business intakes in the sector for more than two years. This contrasted with a slowdown in the rate of expansion of autos output globally. |
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UK: Export trend strengthens despite set-back in April
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| 07 June 2013 |
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| UK exports fell in April but the underlying trend is one of modest growth, which should help drive a continuation of the economic recovery into the second quarter. However, the modest rate of expansion remains disappointing and something of a concern, given the extent to which the pound has depreciated against other major currencies. |
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US: Mixed jobs report shows robust job creation doing little to combat high unemployment
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| 07 June 2013 |
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| US non-farm payrolls rose 175,000 in May, higher than expectations of 163,000. Ongoing economic growth is creating jobs at a reasonable rate, with an average of 172,000 over the past 12 months. The downside, of course, is that the better than expected number will stir up increased talk of when the Fed might start to taper its asset purchase programme. |
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Output growth in emerging markets remains sluggish in May
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| 06 June 2013 |
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| The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, was unchanged from April at 51.4 in May. That was the joint-lowest level since September 2011 and indicated a muted rise in global emerging market output. |
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Bank of England holds policy amid signs of strengthening economy
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| 06 June 2013 |
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| The Bank of England's Monetary Policy Committee voted once again to keep policy unchanged at its June meeting, the last presided over by present Bank governor Sir Mervyn King. Interest rates were held at 0.5% and its asset purchase programme maintained at £375bn. |
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Week Ahead Economic Overview [10-14 Jun]: Industrial production updates for four of the world’s largest economies
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| 06 June 2013 |
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| The week sees important releases of official data for the US, China, eurozone and the UK, which will show how four of the world’s largest economies are faring in the second quarter. |
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Eurozone downturn eases to slowest in three months in May
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| 05 June 2013 |
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| The downturn in the eurozone economy eased for the second month running in May. Rates of decline eased for both manufacturing production and service sector business activity, reaching 15- and three-month lows respectively. |
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UK: Growth upturn gathers momentum in second quarter
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| 05 June 2013 |
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| The UK economy has moved up a gear with all cylinders now firing. For the first time in a year, manufacturing, services and construction sectors are all now reporting higher levels of activity. The resulting overall pace of growth in May was the fastest since March of last year, having now accelerated for three successive months. |
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Global economic growth gains momentum in May
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| 05 June 2013 |
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| Growth of global economic output accelerated in May, regaining the momentum lost in the previous month. At 53.1, up from 51.9 in April, the Global All-Industry Output Index
– produced by JPMorgan and Markit in association with ISM and IFPSM – posted above the neutral 50.0 mark for the forty-sixth successive month. |
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PMIs show global economy picking up speed in May, but Q2 still looks weak
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| 05 June 2013 |
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| Having hit a six-month low in April, global economic growth picked up again in May, according to PMI data. The JPMorgan Global PMI, produced by Markit, merely rose from 51.9 to 53.1, however, thereby still signalling only a modest pace of expansion of around 2-2.5% per annum – above that seen late last year but well below per-crisis rates. |
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Japan bucks Asia downturn trend
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| 03 June 2013 |
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| PMI data reveal increasingly divergent trends across manufacturing in Asia during May, with Japan enjoying the strongest growth for almost two years while the rest of the region sees manufacturing conditions deteriorate for the first time since last October. |
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Eurozone manufacturing downturn weakest in 15 months in May
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| 03 June 2013 |
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| The eurozone manufacturing downturn eased for the first time in four months in May. Moreover, all sub-indices from the latest survey improved on the earlier flash estimates except suppliers’ delivery times. |
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Global manufacturing remains stuck near stagnation in May
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| 03 June 2013 |
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| Manufacturing continued to more or less stagnate in May, according to the worldwide PMI surveys. Modest expansions in the US, Japan and the UK offset downturns in China and in particular the euro area, leaving an overall picture of almost no growth. |
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Japanese manufacturing sector retains growth momentum during May
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| 31 May 2013 |
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| The recent strengthening of Japan’s manufacturing sector was sustained in May, with output and orders continuing to rise at solid rates. Solid growth filtered through to the labour market, with manufacturers registering a net rise in staffing levels for the first time since last September. |
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Week Ahead Economic Overview [3-7 Jun]: Worldwide PMI updates
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| 30 May 2013 |
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| A crammed week for economy watchers includes PMI releases, US non-farm payrolls, and policy announcements at the ECB, Bank of England and Reserve Bank of Australia. |
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OECD sees slower global growth outlook
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| 29 May 2013 |
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| A gloomy OECD has trimmed its global growth forecast once again. The organisation now expects the global economy to grow by just 3.1% this year, down from 3.4% in its last twice-yearly forecast and down from 4.2% a year ago. Growth was revised down for the US, UK and China, while the Eurozone is set to experience a deeper than previously thought downturn. Of the world’s major economies, only Japan saw an upgrading to its growth outlook. |
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UK: Consumers hold key to poor growth outlook
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| 29 May 2013 |
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| A disappointing CBI surveys paints a picture of falling retail sales in May, but the outlook is one of modest sales growth in coming months. Sales growth should pick up again in June, in line with retailers’ expectations, though any strong resurgence in consumer spending is clearly very unlikely to take place any time soon. Until real wages start rising, downbeat consumers will keep a lid on the UK’s recovery prospects. |
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Diverging trends in China and Japan
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| 28 May 2013 |
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| PMI data reveal strongly divergent trends within manufacturing in Asia. While China’s goods-producers suffer from falling export demand, Japan’s manufacturing sector is enjoying the strongest growth of exports for three years. Resulting changes in inventory levels suggest China’s manufacturers are likely cut production in coming months while Japan is set to continue to see strong output growth. |
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Week Ahead Economic Overview [27-31 May]: US GDP, consumer confidence and housing market updates to give guidance on Fed policy
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| 24 May 2013 |
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| More guidance on the health of the global economy in the first quarter will be provided by the publication of gross domestic product data for India, Brazil and Canada, while the US will also publish a second estimate of GDP in the first three months of the year. |
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IFO survey points to second quarter German growth upturn
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| 24 May 2013 |
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| Survey data from IFO pointed to reasonable growth of the German economy in the second quarter, but recent falls in stock markets may dent business confidence and pose downside risks to the outlook if sustained. |
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France: INSEE survey adds to sense of gloom in second quarter
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| 24 May 2013 |
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| Business confidence remained firmly in the doldrums in May, according to INSEE. The survey data correspond with the flash PMI from Markit, which showed an ongoing marked deterioration in business conditions during the month. |
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China flash PMI signals renewed downturn in manufacturing economy
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| 23 May 2013 |
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| The HSBC China Manufacturing PMI fell to 49.6 in May from 50.4 in April, according to the flash estimate produced by Markit. The sub-50 reading means manufacturing business conditions deteriorated for the first time in seven months. |
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Eurozone PMI signals ongoing recession in second quarter, though downturn eases in May
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| 23 May 2013 |
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| The Markit Eurozone PMI Composite Output Index rose to a three-month high in May, but remained deep in contraction territory. According to the flash estimate, based on approximately 85% of total replies, the Eurozone PMI rose from 46.9 in April to 47.7 in May, signalling an easing in the rate of contraction for the second consecutive month. |
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US manufacturing slowdown continues, as output growth eases to seven-month low
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| 23 May 2013 |
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| The Markit Flash U.S. Manufacturing PMI fell for the second month running in May, falling to its lowest reading since last October. At 51.9, down marginally from April’s 52.1, the flash PMI index, which is based on around 85% of usual monthly replies, was consistent with a moderate improvement in overall manufacturing business conditions. |
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Bad weather blamed as UK retail sales fall for second month running
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| 22 May 2013 |
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| A weather-related drop in retail sales in April brings a reminder that the economy remains in a fragile state. It is likely that spending will revive again in coming months, helping keep the country out of another downturn, though the recovery will be only gradual as incomes continue to be squeezed. |
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Output growth at global steel-users eases to five-month low
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| 17 May 2013 |
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| Worldwide steel-using firms reported a weaker expansion of output during April. The latest data from Markit showed that production at intensive users of steel rose at the slowest pace in five months, with growth moderating from the two-year high registered in March. |
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Japan surges out of recession
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| 16 May 2013 |
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| Official data confirmed the upbeat message from recent PMI surveys, indicating that Japan has surged out of recession. Gross domestic product grew 0.9% in the first quarter, its fastest pace of expansion for a year. The economy also grew 0.3% in the final quarter of last year, revised up from a flat picture. |
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Week Ahead Economic Overview [20-24 May]: Flash US, China and eurozone PMIs
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| 16 May 2013 |
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| The flash PMIs from Markit will provide guidance on the health of the world’s three largest economies in May. Recent PMI data have indicated that global manufacturing has moved down a gear, almost stagnating in April. A weakening of global trade will affect all major nations, meaning trends in China, the US and the eurozone will have widespread implications for policymakers around the world. |
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France returns to recession and Germany’s growth disappoints
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| 15 May 2013 |
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| The eurozone's two largest economies fared worse than expected at the start of the year, piling further pressure on the ECB to act soon to do more to reinvigorate growth. |
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UK labour market shows signs of stalling amid mixed official data
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| 15 May 2013 |
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| A tangled web of official data once again sent mixed messages about the health of the UK economy. However, most of the disappointments came from the more backward-looking data, while the more forward-looking and up-to-date statistics add to growing signs that the UK economy is enjoying a modest growth upturn after the downturn seen late last year. |
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Eurozone stuck in recession at start of 2013
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| 15 May 2013 |
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| The eurozone economy contracted for the sixth successive quarter at the start of 2013, with gross domestic product declining 0.2% in the three months to March. The economy has now shrunk 1.5% since peaking in the third quarter of 2011 in a double-dip recession that leaves the economy still 3.4% lower than its pre-crisis peak. |
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Canadian manufacturing shipments fall, but PMI suggests brighter picture for April
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| 15 May 2013 |
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| Canadian manufacturing shipments fell 0.3% in March, down to $49.5bn. Although the contraction was only marginal, it was a marked contrast to the revised 2.8% growth in February, the strongest for over one-and-a-half years. |
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Eurozone industrial production jumps 1.0% in March
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| 14 May 2013 |
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| Eurozone industrial production rose surprisingly strongly in March, but divergent trends within the region and recent weak business surveys suggests there is scant evidence to suggest that the region is staging any sort of sustained industrial-led recovery. |
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Two decades of manufacturing compared
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| 14 May 2013 |
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| Comparisons of developed world manufacturing economies, which includes data up to March 2013 for the US, UK, Japan, the eurozone and the individual big-four euro countries, show hugely divergent fortunes over the past 20 years. |
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US retail sales rise in April, but upturn fails to revive weak underlying trend
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| 13 May 2013 |
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| The US Fed will be reassured by better than expected sales growth in April, but will be cautious about reading too much into one month's data. Instead, an ongoing weakening in the trend rate of sales growth will most likely encourage policymakers to refrain from easing back on policy stimulus any time soon and await more data. The sales upturn will nonetheless ensure talk of scaling back the stimulus remains firmly on the table. |
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UK exports surge on weaker sterling
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| 10 May 2013 |
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| UK trade data add to signs that the manufacturing sector is finding its feet again, buoyed by a rise in exports of goods, which jumped almost 5% in March. |
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UK industrial sector shows reassuring growth in March
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| 09 May 2013 |
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| UK factories stepped up a gear in March, boosting production for a second successive month. With surveys indicating that growth gained further momentum at the start of the second quarter, the encouraging data reduce the likelihood of policymakers seeing any immediate need to add more stimulus to the economy. |
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Bank of England sees no need for further stimulus
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| 09 May 2013 |
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| The Bank of England's Monetary Policy Committee voted to keep policy unchanged at its May meeting, with interest rates held at 0.5% and its asset purchase programme steady at £375bn. With the economic data flow improving in recent weeks, no change is likely at its June meeting either, but new initiatives may follow the appointment of Mark Carney as new Bank governor in July. |
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Week Ahead Economic Overview [13-17 May]: Japanese and eurozone GDP data
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| 09 May 2013 |
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| The week sees a vast amount of data released, including euro area and Japanese GDP, updates on retail and industrial growth in China, inflation for the US, plus the latest UK labour market statistics and the Bank of England’s Inflation Report. |
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Emerging market growth slows in April
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| 08 May 2013 |
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| The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, fell to 51.3 in April, from March’s 52.5. That signalled a slowdown in economic growth in global emerging markets, to the weakest for over a year-and-a-half. |
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Chinese trade data show softening trend despite uplift in April
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| 08 May 2013 |
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| China’s official data showed an upturn in growth of both imports and exports in April, but the volatile data disguise a trend of slowing growth which corresponds with the message from business surveys. |
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German industry enjoys strong growth in March, but upturn may prove short-lived
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| 08 May 2013 |
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| Government data showed an improved performance of the German industrial sector in March, led by a strong upturn in manufacturing. However, the official data look set to weaken again, just as the survey data have also fallen back after showing promising signs of growth earlier in the year. |
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Subdued start to Q2 for UK consumer spending
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| 07 May 2013 |
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| Consumer spending fell in April, contrasting with marked growth seen in each of the previous three months. The Visa Europe: UK Expenditure Index, which is derived from card spending data, adjusted for factors such as changes in card usage and inflation, signaled a 2.5% drop in spending compared to March, the largest monthly decline since last October. |
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PMIs signal global economic slowdown at start of second quarter
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| 07 May 2013 |
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| The JPMorgan Global PMI, compiled by Markit, fell from 53.0 in March to 51.9 in April, indicating the weakest pace of worldwide economic growth for six months. Rates of expansion deteriorated in both the manufacturing and service sectors, hitting four- and ten-month lows respectively. |
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Japan: Policy rewarded as PMIs signal ongoing robust growth and rising price pressures
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| 07 May 2013 |
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| The Markit/JMMA Japan PMI surveys point to an ongoing growth spurt in the Japanese economy in April, albeit with growth tapering off slightly compared with March’s survey peak, and accompanied by signs of rising price pressures. |
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UK PMIs signal growth upturn at start of second quarter
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| 03 May 2013 |
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| The three UK PMI surveys collectively signaled the fastest rate of economic growth for eight months in April. The improvement reflected a strengthening upturn in service sector business activity, a return to marginal growth in the manufacturing sector and a near-stabilisation of construction. |
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Week Ahead Economic Overview [06-10 May]: Services PMI data followed by official trade and industry figures
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| 03 May 2013 |
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| Services PMI data from Markit for the Eurozone and major emerging markets are released at the start of the week, followed by official industrial output and trade data for major European economies and China. |
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Faster than expected hiring drives US unemployment to lowest since 2008
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| 03 May 2013 |
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| Official data show far stronger than previously thought job creation in the US, reducing the need for additional stimulus from the Fed. However, future discussion among policymakers is likely to be lively. Some will inevitably see the need to consider when policy could be scaled back due to the job market gains, while others will worry that the recent weakening of other economic indicators could mean employment growth starts to slow again in coming months. |
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Marginal improvement in Chinese manufacturing operating conditions during April
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| 02 May 2013 |
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| April data from HSBC signalled only a slight improvement of operating conditions in the Chinese manufacturing sector, as output and new orders both expanded at weaker rates. New export orders contracted for the first time in 2013 so far. |
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Eurozone manufacturing downturn deepens at start of second quarter
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| 02 May 2013 |
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| Eurozone manufacturing started the second quarter of 2013 on a weak footing, with conditions in the sector deteriorating at the sharpest pace in the year-to-date. |
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ECB cuts rate to all-time low as recession deepens
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| 02 May 2013 |
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| At last, the fastest contracting region in the world no longer has the highest central bank policy rate of all major developed economies. A combination of ongoing steep economic decline and falling inflation has prompted in the European Central Bank into renewed action to stimulate growth in the euro currency area. |
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Global manufacturing sector sees near-stalling of growth in April
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| 02 May 2013 |
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| The JPMorgan Global Manufacturing PMI – compiled by Markit – came in at 50.5 in April, down to a four-month low from 51.1 in March to signal a near-stagnation of business activity in the world’s factories. |
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UK manufacturing sector stabilises in April
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| 01 May 2013 |
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| The UK manufacturing sector showed signs of stabilising at the start of the second quarter of
2013, as levels of production and new orders rose slightly after contracting in the prior two months. At 49.8 in April, up further from February’s four-month low, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index (PMI) signalled little change in overall operating conditions in the sector, following contractions in the prior two months. |
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Sterling hits three-month high as UK manufacturing PMI beats expectations
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| 01 May 2013 |
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| Sterling jumped 0.3% after April’s Markit/CIPS Manufacturing PMI came in above expectations. The near-stabilisation of the manufacturing economy signalled by the survey significantly reduces the likelihood of the Bank of England voting for further QE at its May meeting next week. |
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Solid rises in output and new orders support continued expansion of Japanese manufacturing economy
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| 30 April 2013 |
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| A modest improvement of Japanese manufacturing operating conditions was signalled during April. Led by a strong performance from investment goods producers, solid net rises in output and new orders were recorded. Yen depreciation also supported a gain in new export sales, but also raised the cost of imported goods which in part led to the sharpest rise of input costs for 19 months. |
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Week Ahead Economic Overview [29 Apr - 3 May]: Manufacturing and services PMIs
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| 26 April 2013 |
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| Monetary policy meetings at the Fed and ECB are scheduled for a busy week which also features Markit’s worldwide manufacturing and service sector PMIs, the ISM surveys and culminates with US non-farm payrolls. |
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No end to Fed stimulus in sight as US economic growth fails to impress in Q1
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| 26 April 2013 |
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| The US economy expanded at a slower-than-expected rate in the first quarter. Gross domestic product rose at an annualised rate of 2.5%, up sharply from the end of last year, but economists were hoping to see growth of at least 3.0%. Moreover, even this weaker-than-hoped growth rate exaggerates the true underlying momentum in the economy, as growth of final demand slowed compared with Q4 2012. |
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Spanish unemployment breaks 6 million mark
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| 25 April 2013 |
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| A further illustration of the crisis engulfing the Spanish economy was provided today by the latest quarterly labour market statistics release. Unemployment broke through the 6 million barrier, just over a year after breaching the 5 million mark. More than one-third of these have been unemployed for two years or more, making it ever more difficult for them to get back into work. |
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UK economy avoids triple-dip recession with faster than expected expansion
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| 25 April 2013 |
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| The UK avoided sliding into its third recession in five years by growing more than expected in the first quarter. The likelihood of policy action by the Bank of England has fallen significantly with this better than expected outcome, but there remains pressure on the government and the Bank of England to find ways to ensure the latest upturn turns into a sustainable and robust recovery, and that the economy does not falter once again. |
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Germany: IFO survey adds emphasis to PMI’s signal of renewed downturn risk
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| 24 April 2013 |
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| A second successive monthly drop in the IFO survey adds to the PMI’s message that the German economy could see a weakening of growth or even a renewed downturn in the second quarter. |
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UK retailers gloomiest for 15 months in April
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| 24 April 2013 |
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| UK retailers reported a drop in sales on average for the first time in eight months in April, and the outlook for sales in the coming month darkened to the gloomiest for 15 months, according to the CBI. |
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Fall in China flash PMI signals near stagnation of manufacturing economy
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| 23 April 2013 |
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| The HSBC Manufacturing PMI fell from 51.6 in March to 50.5 in April, according to the flash estimate produced by Markit, only a shade higher than February’s four-month low of 50.4. The above-50 reading means manufacturing conditions have now improved for six successive months but that the rate of expansion at the start of the second quarter slowed to near-stagnation. |
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Eurozone suffers ongoing downturn in April as Germany sees renewed contraction
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| 23 April 2013 |
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| The Markit Eurozone PMI Composite Output Index was unchanged on March’s reading of 46.5 in April, according to the flash estimate. The sub-50 reading indicated a drop in activity for the nineteenth time in the past 20 months, the exception being a marginal increase in January 2012. |
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US PMI points to weakest manufacturing expansion since last October
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| 23 April 2013 |
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| The Markit Flash US Manufacturing Purchasing Managers’ Index (PMI) fell to its lowest reading in six months during April. At 52.0, the flash PMI index, which is based on around 85% of usual monthly replies, was down from 54.6 in March and indicated a moderate improvement in overall manufacturing business conditions. |
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Weaker PMI data hit markets on global growth worries
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| 23 April 2013 |
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| Weaker than expected flash PMI surveys from Markit for China, the US and the euro area have led to increased worries about the global economy. |
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Global metal-users report further solid output growth in March, but indicators of commodity demand yet to see similar improvement
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| 22 April 2013 |
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| Output growth at global metal-using firms was sustained at a solid pace in March, according to the latest Metals PMI data from Markit. This rounded off a positive first quarter, echoing a more general improvement in global manufacturing sector conditions at the start of 2013. |
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Week Ahead Economic Overview [22-26 Apr]: UK first quarter GDP to reveal triple-dip fate
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| 19 April 2013 |
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| The preliminary estimate of first quarter gross domestic product (GDP) on Thursday will reveal whether the UK has slipped into a triple-dip recession. We estimate that the currently available data point to a modest 0.1% expansion at best, after GDP fell 0.3% in the fourth quarter of last year, although a further decline would not be a surprise. |
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UK retail sales rise in first quarter despite weather-related fall in March
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| 18 April 2013 |
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| Despite falling in March, which was in part attributable to bad weather, UK retail sales returned to growth in the fourth quarter, adding to signs that the economy is staging a steady recovery. However, this upturn could lose its legs in coming months as incomes are increasingly squeezed by weak pay growth and rising inflation. |
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UK pay growth drops to record low as employers withdraw from job market
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| 17 April 2013 |
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| Bleak looking labour market data raise the prospect of the Bank of England stepping up its asset buying programme in May. Employment fell, unemployment rose and pay growth slipped to a record low. |
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Fall in Eurozone inflation opens door for ECB action
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| 16 April 2013 |
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| Inflation has eased in the Eurozone to its lowest since August 2010, giving the ECB more leeway to cut interest rates and revive a region that is falling deeper into recession. |
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UK: Persistent high inflation curbs room for manoeuvre at Bank of England
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| 16 April 2013 |
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| UK inflation remained well above its 2.0% target in March and looks set to increase further in coming months. Although recent falls in commodity prices may help limit the extent of the rise, stubbornly high inflation will limit the Bank of England’s scope to provide aggressive stimulus to the economy. |
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Oil price fall linked to loss of global economic growth momentum
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| 16 April 2013 |
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| Oil prices have fallen sharply, with Brent crude dropping below $100 per barrel for the first time since last July and West Texas Intermediate down to $88.3 per barrel. Both have fallen 9% so far in April. |
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United States: Robust rise in industry and house building marks positive end to Q1
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| 16 April 2013 |
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| Strong industrial production and housing data suggest that the US economy saw a robust end to the first quarter, but nagging doubts persist about the sustainability of such impressive growth in the spring. |
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IMF sees slower pace of global expansion
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| 16 April 2013 |
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| The International Monetary Fund cut its global growth forecast for this year from 3.5% to 3.3%, barely any stronger than the 3.2% expansion of 2012. Slower growth is expected in the US, China and the UK than had been anticipated last winter, and the eurozone is set to see a steeper downturn, but the outlook has improved for Japan. Growth is expected to pick up to 4.0% in 2014, similar to the expansion seen in 2011. |
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China: Economic growth slowdown contrasts with upbeat signals from business
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| 15 April 2013 |
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| Official data brought disappointing news on the performance of the world’s second largest economy at the start of 2013, with economic growth slowing rather than accelerating in China in the first quarter, as analysts had been anticipating. However, several factors suggest that the slowdown could merely be temporary. |
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Italy suffers longest recession on record
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| 15 2013 |
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| Italy recorded its seventh straight quarterly decrease in gross domestic product over the three months to March, which is now the longest period of continuous contraction since records began. ISTAT’s preliminary estimate of GDP showed a 0.5% reduction in output compared with the final quarter of 2012, indicating that the downturn was also deeper than the 0.3% decline expected in a Reuters survey of analysts. |
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Eurozone industrial downturn shows signs of easing in first quarter
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| 12 April 2013 |
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| Eurozone industry picked up in February, but the underlying trend in the official data is still one of a sector in decline and in line with the PMI, which suggests the industrial downturn has eased compared to late last year but gathered momentum again in March. Any further downturn in the Eurozone PMI in the second quarter could be the trigger for policy action from the ECB, which stands ready to act – possibly with a cut in interest rates - if business conditions deteriorate further. |
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Construction set to act as drag on UK economy in first quarter
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| 12 April 2013 |
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| A downturn in the construction sector has added to the risk of having slid back into recession in the first quarter. UK construction industry output fell 7.0% on a year ago in February, worse than the 5.5% decline seen in January, according the latest data form the Office for National Statistics. For the first two months of the year, output is down 6.3% on last year. |
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Week Ahead Economic Overview [15-19 Apr]: China releases Q1 GDP
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| 12 April 2013 |
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| A busy week for economy watchers starts with first quarter GDP data for China, which are likely to confirm earlier signals from the PMI surveys of faster economic growth. Industrial production and retail sales are also expected to have shown upward trends in March. |
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U.S. retail sales slide adds to fears of slowing economy
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| 12 April 2013 |
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| Lower consumer confidence looks to have resulted in a drop in US retail sales in March, raising the prospect that the economy is slowing as spring advances. |
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UK: Mixed signals as industrial production rebounds in February, but exports fall
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| 09 April 2013 |
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| Industrial production rebounded in February after having suffered a shock fall in January, greatly reducing the likelihood of the UK sliding back into its third recession since the financial crisis struck. However, any upturn in the first quarter is still likely to have been modest at best. The trade deficit was larger than expected, and survey data suggest the trend could weaken again in March. |
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Production rise adds to signs of industrial downturn easing in Germany
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| 09 April 2013 |
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| Downward trends in manufacturing output, industrial production and exports have eased in recent months, adding to signs that the German economy is set to see a weaker downturn in the first quarter compared to the steep 0.6% decline seen in the fourth quarter of last year. However, the official data need to improve further in March to catch up with the more positive-looking PMI surveys. |
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Week Ahead Economic Overview [08-12 Apr]: European industrial data likely to be weak
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| 05 April 2013 |
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| The week sees important indications of industrial performance in the UK and eurozone, which are likely to show weak trends, as well as retail sales for the US, which will reveal the extent to which consumption is holding up in the face of fiscal policy. Trade data for the UK, Germany, France and China will meanwhile provide an insight into the strength of global demand. |
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US unemployment rate falls to lowest since 2008, but job creation disappoints
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| 05 April 2013 |
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| The rate of unemployment in the US fell to 7.6% in March, dropping for the second successive month to its lowest since December 2008. Non-farm payroll numbers were a massive disappointment, however, rising by just 88,000 against analysts’ expectations of a 200,000 rise according to Reuters’ polls. |
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Emerging market growth remains subdued in March despite Chinese pick-up
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| 04 April 2013 |
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| The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, was little-changed from February’s 52.4 in March, posting 52.6. That indicated a subdued rate of economic growth in global emerging markets. However, the average EMI reading for the first three months of 2013 (52.9) exceeded those in both the third and fourth quarters of 2012. |
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Services upturn means PMIs point to marginal first quarter economic growth
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| 04 April 2013 |
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| A gathering upturn in the service sector in March looks to have helped the UK avoid a triple-dip recession by the narrowest of margins. |
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Eurozone downturn intensifies as German economy shows near-stagnation
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| 04 April 2013 |
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| At 46.5 in March, the final Markit Eurozone PMI® Composite Output Index was unchanged on the flash reading, confirming that the rate of decline in activity accelerated for the second month in a row to reach the fastest since last November. |
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Bank of England holds policy amid signs of economy gaining momentum
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| 04 April 2013 |
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| The Bank of England's Monetary Policy Committee voted to keep policy unchanged at its April meeting. The decision is likely to have been a close call, and there is much uncertainty about whether further stimulus will be sanctioned in future meetings. |
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Japanese service sector registers record rise in activity during March
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| 03 April 2013 |
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| The Japanese service sector expanded in March at the quickest rate in over five years of data collection, as confidence improved and market demand strengthened. With companies experiencing an increase in backlogs for the first time in a year, employment was also raised at a firmer pace. |
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Solid rise in business activity across combined Chinese manufacturing and service sector in March
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| 03 April 2013 |
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| HSBC China Composite PMI data (which covers both manufacturing and services) signalled a further expansion of output during March. Activity has now risen at the composite level for seven successive months. Furthermore, the rate of expansion accelerated from February to a solid pace. The HSBC China Composite Output Index posted 53.5 in March, up from February’s four-month low of 51.4. |
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Global manufacturing PMI edges higher in March
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| 02 April 2013 |
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| At 51.2 in March, up slightly from 50.9 in February, the JPMorgan Global Manufacturing PMI – a composite index produced by JPMorgan and Markit in association with ISM and IFPSM – signalled expansion for the third straight month. |
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Strong growth of U.S. manufacturing output, supporting faster rise in employment
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| 01 April 2013 |
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| The final Markit U.S. Manufacturing Purchasing Managers’ Index posted 54.6 in March, signalling a further improvement in overall U.S. manufacturing business conditions. The PMI was up from February’s 54.3 but down from the earlier flash estimate of 54.9, and consistent with a solid rate of expansion. |
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UK: Service sector growth stifles triple-dip fears
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| 28 March 2013 |
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| Growth in service sector activity at the start of the year has greatly reduced the risk of the UK falling back into a triple-dip recession. The country is not out of the woods yet, with much depending on how the economy has coped with adverse weather conditions in recent months, and the indications are that any growth is still disappointingly weak. |
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Week Ahead Economic Overview [1-5 Apr]: Manufacturing and services PMIs
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| 28 March 2013 |
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| A public holiday in Europe on Monday means a staggered release of the March PMIs over the week. The publication of US and emerging market manufacturing surveys on Monday and services PMIs on Wednesday are therefore followed by UK and eurozone numbers a day later. |
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US economic growth stronger than previously thought, but still meagre
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| 28 March 2013 |
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| The US economy grew more than first thought in the final quarter of last year, though slightly less than economists had been hoping. The annualised rate of gross domestic product was revised up from +0.1% to +0.4%. The Reuters’ consensus was for a 0.5% rise. That still means the economy only expanded by a meagre 0.1% compared to the third quarter, but a better indication of the health of the economy late last year is provided by the growth rate for final sales, which excludes inventories, the annualised rate of which picked up from a previously-estimated 1.7% to 1.9%. The quarter also saw the largest drop in government defence spending since the 1970s, down 22%. |
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UK economy hit by falling investment, weak trade and cautious consumers
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| 27 March 2013 |
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| Final data for the fourth quarter of last year show an economy suffering from the headwinds of falling exports, declining business investment and cautious consumers. |
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US Flash PMI signals faster manufacturing expansion in March
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| 22 March 2013 |
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| The expansion of the U.S. manufacturing sector strengthened to the second-fastest pace in almost a year during March. This was signalled by the Markit Flash U.S. Manufacturing Purchasing Managers’ Index , which is based on around 85% of usual monthly replies, rising to 54.9 from 54.3 in February, consistent with a solid rate of growth overall. |
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IFO survey adds to PMI message of renewed German economic slowdown
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| 22 March 2013 |
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| It was only a small decline, but the first drop in the IFO survey’s business expectations index adds to signs that the German economy is slowing again. |
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Week Ahead Economic Overview [25-29 Mar]: Eurozone consumer and business sentiment under the spotlight as Cypriot crisis plays out
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| 22 March 2013 |
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| With Cyprus adding to uncertainty caused by the Italian elections, analysts will be watching the European Commission consumer and business sentiment indicators for the main eurozone countries to see how confidence has been holding up in March. Markit’s Flash Eurozone PMI has already signalled an increased rate of decline of business activity in March, suggesting the economy was already turning down before the Cypriot crisis took hold. |
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HSBC Flash China Manufacturing PMI rebounds to signal strengthening upturn
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| 21 March 2013 |
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| The HSBC Manufacturing PMI rose to 51.7 in March, according to the flash estimate produced by Markit, rebounding from February’s four-month low of 50.4. The upturn signalled the strongest pace of expansion for 23 months with the exception of January’s two-year high. The above-50 reading means manufacturing conditions having now improved for five successive months following a 12-month period of decline. |
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Eurozone downturn intensifies for second month running in March
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| 21 March 2013 |
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| The Markit Eurozone PMI Composite Output Index fell from 47.9 in February to 46.5 in March, according to the flash estimate. The decline signalled an acceleration in the rate of contraction of business activity for the second consecutive month to the steepest experienced for four months. |
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UK 'triple-dip' fears ease on retail sales, tax and manufacturing data
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| 21 March 2013 |
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| The risk of the UK sliding into a triple-dip recession have fallen sharply following news of a rebound in retail sales, rising tax revenues and an improved outlook in manufacturing. |
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UK wage growth hits lowest since 2009 despite further upturn in employment
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| 20 March 2013 |
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| Official data once again provided a mixed picture of the health of the labour market data . Some reason to cheer came from a further rise in private sector employment, but the concern is that the jobs being created are low-paid positions which – combined with widespread job insecurity – means that average wage growth is worryingly weak. |
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UK inflation rises to nine-month high and supply chain price pressures build
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| 19 March 2013 |
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| Inflationary pressures picked up in February, not just at the retail level but also in the supply chain. Alongside some signs of underlying improvement in the economy and concerns about the weakness of the pound, the upturn in price pressures is likely to cause the Bank of England to hold back on voting for further stimulus at its next meeting. |
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Rising business confidence points to global economic upturn in 2013
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| 18 March 2013 |
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| Worldwide business confidence has revived from the post-crisis low seen late last year, with expectations of business activity, revenues and inflows of new business all rising to their highest since the start of last year. |
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Rising private sector pay helps ease pressures on household finances
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| 18 March 2013 |
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| This release contains the March findings from the Markit Household Finance Index, which is intended to anticipate changing consumer behaviour accurately. The HFI is compiled each month by Markit, a leading global financial information services company, using data collected by Ipsos MORI. |
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Improved business optimism points to strengthening economic upturn in 2013
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| 18 March 2013 |
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| The latest Markit Business Outlook survey signals an improvement in prospects among US manufacturers and services companies in early 2013 compared to late last year. |
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China drives upturn in emerging market business optimism
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| 18 March 2013 |
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| An upturn in business optimism in China to its highest for two years and sustained positive sentiment in Brazil, India and Russia adds to evidence that the emerging markets will help drive increased momentum of the global economic recovery in 2013. |
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Eurozone business confidence rises to one-year high
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| 18 March 2013 |
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| Expectations regarding business activity over the next 12 months have strengthened across the Eurozone compared with the previous survey conducted in October 2012. Increased activity is forecast by +24 percent of companies on balance, up from just +8 percent last autumn and the highest reading for a year. |
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UK business mood brightest since early 2012, led by manufacturing
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| 18 March 2013 |
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| UK business confidence has picked up compared to late last year, according to the latest Markit Business Outlook Survey. Growth in export markets and improving economic conditions at home are cited as key factors driving improved optimism about the outlook, encouraging increasing numbers of firms to launch new products and boost investment. |
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Japanese business confidence surges to post-crisis high
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| 18 March 2013 |
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| Business confidence in Japan has risen to its highest seen since the recovery began from the global financial crisis in 2008-09. |
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Week Ahead Economic Overview [18-22 Mar]: UK Budget accompanied by government borrowing, inflation and unemployment data
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| 15 March 2013 |
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| In what may be a turbulent week for sterling, the UK Chancellor sets out his fiscal policies in his Budget on Wednesday, which should also include a review of the Bank of England’s monetary policy remit. The week also sees the release of government borrowing, retail sales, inflation and labour market statistics, plus the minutes from the March Bank of England Monetary Policy Committee meeting. |
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Largest monthly rise in US consumer prices since June 2009
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| 15 March 2013 |
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| A jump in gasoline prices meant US consumer prices rose more-than-expected in February, showing the largest monthly increase since June 2009. Core prices also rose. The increase will jangle some nerves at the Fed, but policymakers will remain focused on ensuring the economic upturn looks sustainable and robust before worrying too much about inflation. |
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US industrial production upturn confirms PMI signal of stronger Q1 growth
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| 15 March 2013 |
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| US industrial production rose 0.7% in February, led by a 0.8% increase in manufacturing output. Analysts had been expecting increases of just 0.4% for both measures. |
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Eurozone industrial production falls more than expected in January
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| 13 March 2013 |
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| Eurozone industry fared worse than expected in January, but the underlying trend in the sector is one of a moderating, albeit still severe, downturn. |
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US retail sales growth hits five-month high in February
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| 13 March 2013 |
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| Total retail sales in the US were expected to have increased by 0.5%, with core sales (which exclude autos, gas stations and building materials) up a more modest 0.2%. Instead, sales jumped 1.1% compared with January, the strongest rise since last September. Part of the increase could be explained by higher gasoline prices, but core sales were also up twice as much as anticipated, rising 0.4%. |
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UK: Industrial production slide adds to ‘triple-dip’ recession worries
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| 12 March 2013 |
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| Industrial production suffered a shock fall in January, led down by a steep drop in oil and gas extraction and a slump in manufacturing output. At the same time, goods exports fell sharply. |
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Consumers under pressure as inflation worries intensify
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| 08 March 2013 |
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| Data from the Bank of England showed inflation expectations rising in February. Inflation in 12 months' time is expected to be running at 3.6%, up from 3.5% in January and the highest seen since last May. In five years' time, inflation is anticipated at 3.6%, unchanged on the January survey and the highest seen since the survey, conducted by NOP, commenced in 2009. |
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Week Ahead Economic Overview [11-15 Mar]: US retail sales data to add to signs of GDP upturn in Q1
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| 08 March 2013 |
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| In the US, February retail sales and the University of Michigan’s preliminary estimate of consumer confidence in March are likely to show that the consumer sector remains on track to help boost a revival in GDP in the first quarter after the economy stagnated in the final quarter of last year (mustering a mere 0.1% annualised rate of expansion). Inflation data will also be released, though market reaction is likely to be minimal due to the Fed’s current policy focus on the labour market. |
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Surge in U.S. job creation adds to signs of improving economic health
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| 08 March 2013 |
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| U.S. non-farm payrolls rose by 236,000 in February, smashing through market expectations of a rise of 160,000. Even though January's total was revised down, the recent upturn in hiring has had a marked impact on unemployment, the rate of which fell to a four-year low of 7.7% from 7.9% in January. |
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German regional PMI data signal solid rise in Bavarian business activity
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| 08 March 2013 |
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| After a downbeat end to 2012, regional PMI data produced by Markit indicated a brighter start for 2013 in Bavaria’s business sector. The Free State of Bavaria – home to some 12.6 million people and accounting for 17% of German GDP – recorded an increase in business activity for the second successive month in February. The solid rate of growth was only fractionally slower than the 11-month high seen in January, and was marginally faster than seen in Germany as a whole. |
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ECB holds rates but discusses looser policy
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| 07 March 2013 |
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| The European Central Bank left interest rates unchanged at its March policy meeting, disappointing the minority of analysts that had been expected a cut in its current policy rate of 0.75% to a new all-time low of 0.5%. No other measures were announced. |
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Bank of England keeps monetary policy unchanged
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| 07 March 2013 |
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| The Bank of England's Monetary Policy Committee voted to keep policy unchanged at its March meeting. Signs of better growth in the service sector alongside above-target inflation is likely to have convinced some members that further stimulus was not appropriate at the moment. However, the concern is that monetary policy alone is proving ineffective in stimulating a meaningful recovery and, given the absence of government initiatives to remove the obstacles still impeding the economic recovery, the outlook is one of further stagnation or modest growth at best. |
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Broad-based slowdown in emerging markets growth in February
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| 06 March 2013 |
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| The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, fell from 53.8 in January to 52.3 in February. That was the lowest figure since August 2012 and indicated a moderation in economic growth in global emerging markets. |
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Irish exporters outperform domestically-focussed firms
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| 05 March 2013 |
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| A new analysis of PMI data indicates that Irish exporters have consistently outperformed their non-exporting counterparts since the financial crisis, and continue to record strong growth in output, new orders and employment at the start of 2013. |
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Japanese PMIs point to “Abenomics”-fuelled growth upturn
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| 05 March 2013 |
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| Business confidence in Japan has surged to a five-and-a-half year high, fuelled by expectations of economic recovery following the government’s pledge to defeat deflation. PMI data suggest that the country could pull out of its recession in the first quarter, but the rate of expansion is likely to be only modest and the government faces huge challenges to sustain the recent improvement in business sentiment. |
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UK Services PMI upturn puts economy on course for marginal growth in first quarter
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| 05 March 2013 |
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| Worries about a triple-dip recession in the UK have been softened as service sector companies reported the strongest upturn in business activity for five months in February. The faster growth of the dominant services sector offset downturns in the far smaller manufacturing and construction sectors during February, meaning the economy is likely to have grown for a second successive month after the downturn late last year. |
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Eurozone downturn accelerates despite German growth
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| 05 March 2013 |
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| At 47.9 in February, the Markit Eurozone PMI Composite Output Index came in above the earlier flash estimate of 47.3 but remained down on January’s reading of 48.6. |
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Strength of first quarter growth under scrutiny as Global PMI hits four-month low
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| 05 March 2013 |
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| Global economic growth slowed to a four-month low in February, according to the JPMorgan Global PMI, a survey-based leading indicator of worldwide business activity produced by Markit. The index remains elevated compared to the lows seen late last year, suggesting that global GDP growth is still likely to have picked up in the first quarter (the annual rate of growth of worldwide GDP slowed to an estimated three-year low of 1.3% in the final quarter of 2012), but the drop in the PMI from 53.2 in January to 53.0 in February raises question marks over growth momentum and the sustainability of the improvement moving into the second quarter. |
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Sterling rebounds as UK PMI data allay fear of ‘triple-dip’ recession
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| 05 March 2013 |
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| Having fallen below $1.50 for the first time in just over two years on Friday due to much weaker-than-expected manufacturing PMI data, sterling rebounded sharply on Tuesday on the back of consensus-beating service sector PMI data. |
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Euro area reliance on exports for growth highlighted by PMI divergences
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| 01 March 2013 |
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| Data derived from the Markit Eurozone Manufacturing PMI survey shows a clear divergence between the performance of exporting companies and those firms that are reliant solely on domestic markets. This highlights the weakness of domestic demand within the Eurozone, notably in the southern member states, where the divergence has shown signs of widening again at the start of 2013. |
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Eurozone manufacturing downturn continues despite German stabilisation
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| 01 March 2013 |
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| At 47.9 in February, up slightly from a flash reading of 47.8, the seasonally adjusted Markit Final Eurozone Manufacturing PMI was unchanged from January’s 11-month high. The headline PMI signalled a deterioration in business conditions for the nineteenth successive month, but the rate of contraction remained one of the weakest seen during the past year. |
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Return to contraction of UK manufacturing sector in February
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| 01 March 2013 |
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| The UK manufacturing sector lost considerable momentum during February, with output, new orders and employment all posting net reductions since January. Purchasing activity was also cut markedly, as manufacturers continued to signal a preference for lower stock holdings. |
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Week Ahead Economic Overview [4-8 Mar]: Service sector PMIs to give guidance ahead of monetary policy meetings at the Bank of England and ECB
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| 01 March 2013 |
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| A crowded week for economy watchers includes the worldwide service sector PMIs, US non-farm payrolls, a wealth of indicators for China, fourth quarter GDP updates for the Eurozone, Japan and Australia (first estimate), not to mention policy decision meetings at the ECB, Bank of England and Bank of Japan. |
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Global manufacturing growth maintained, albeit at weaker pace
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| 01 March 2013 |
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| Growth of the global manufacturing sector was maintained in February, although the rate of improvement eased from the start of the year and was only modest. |
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US fourth quarter GDP contraction revised away to show marginal growth
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| 28 February 2013 |
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| The US economy is estimated to have grown at an annualised rate of 0.1% in the final quarter of last year rather than having contracted 0.1% as previously estimated. The underlying trend is likely to have been firmer than this headline number suggests, and faster growth is on the cards for the first quarter of this year. |
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UK economic downturn due to cautious consumers, falling business investment and export losses
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| 27 February 2013 |
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| The UK economy contracted 0.3% in the final quarter of last year, but is now estimated to have grown in 2012 as a whole rather than stagnated as previously thought. A return to growth is likely in the first quarter. However, with the root causes of the weakness of the economy unresolved, very modest growth at best can be expected over the course of 2013. |
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China Flash Manufacturing PMI signals weakest growth for four months
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| 25 February 2013 |
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| The HSBC Manufacturing PMI fell from a two-year high of 52.3 in January to 50.4 in February, according to the flash estimate produced by Markit. The latest reading indicated that manufacturing conditions improved for the fourth successive month, but that the rate of improvement was the weakest seen over this period. |
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UK bank lending disappoints in January as mortgage approvals drop and businesses continue to repay debt
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| 25 February 2013 |
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| There was little evidence of the government's Funding for Lending Scheme driving more bank lending in January, according to statistics from the British Banker's Association. |
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Week Ahead Economic Overview [25 Feb - 1 Mar]: Manufacturing PMIs to give update on health of global economy in February
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| 22 February 2013 |
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| The week starts with the release of the flash manufacturing PMI for China on Monday and ends with worldwide final PMI releases on Friday. However, the week also sees the results of the Italian general election, which also has the potential to alter market sentiment if opinion polls of a centre-left coalition victory involving Mario Monti prove wrong. |
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European Commission sees eurozone contraction in 2013
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| 22 February 2013 |
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| A downward revision to the European Commission's economic growth forecasts for the eurozone suggest that governments will be given more time to reduce budget deficits without implementing harsher austerity measures, while at the same time putting more pressure on the European Central Bank to provide a further boost of stimulus, perhaps via a cut in its main policy rate. |
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Eurozone PMI signals steepening downturn in February
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| 21 February 2013 |
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| The Markit Eurozone PMI® Composite Output Index fell to 47.3 in February from 48.6 in January, according to the flash estimate. The decline signals a steepening of the economic downturn, contrasting with the easing trend seen in the previous three months. Business activity has now declined throughout the past year-and-a-half, with the exception of a marginal increase in January last year. |
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UK Government borrowing still set to rise despite healthy January surplus
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| 21 February 2013 |
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| Government borrowing figures were much better than expected in January but, with just two months of the tax year remaining, borrowing is still up 1.6% on last year and the government's target for the year looks likely to be missed by perhaps £5-10bn. The Chancellor will need to reassure the markets and credit rating agencies in the Budget that policies can be put in place to revive the stagnant UK economy and break the cycle of weak growth, low tax revenues and rising government borrowing. |
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Sharpest rise in U.S. manufacturing output in almost two years
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| 21 February 2013 |
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| The Markit Flash U.S. Manufacturing PMI signalled further expansion of the manufacturing sector in February, although the rate of growth slowed slightly on January’s nine-month peak. At 55.2, down from 55.8, the ‘flash’ PMI reading, which is based on around 85% of usual monthly replies, continued to suggest a strong improvement in overall manufacturing business conditions. |
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UK employment reaches all-time high
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| 20 February 2013 |
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| The head scratching intensifies as data show employment rising to a new all-time high at the same time as the economy contracted at the end of last year. While GDP data showed the output of the country falling 0.3% in the final three months of last year, unemployment fell by 13,000 to 2.501 million and employment rose by 154,000 to a new record of 29.73 million, its highest since records began in 1971. |
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Using PMI data to analyse auto industry metal demand
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| 19 February 2013 |
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| PMI data from Markit can be used to gain an insight into the auto sector’s demand for raw materials such as metals and its relative performance to other metal-intensive manufacturers. For example, January data signalled a welcome easing in the pace of decline of new orders received by the Automobiles & Parts sector in Europe to the slowest for almost a year. Nevertheless, the fall was steeper than that registered by steel-users generally across the region, continuing a trend that has been evident over the past 16 months. This ongoing, steeper-than-average, decline suggests the European car industry’s demand for steel is likely to remain subdued for some time to come. |
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UK retail sales suffer steepest downward trend for almost three years
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| 15 February 2013 |
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| Widespread heavy snowfall deterred high street shoppers in January, causing retail sales to drop 0.6% during the month, also down 0.6% on a year ago. However, while the underlying trend in sales has been increasingly negative in recent months, reaching the worst since early-2010, there are signs that the household sector is slowly beginning to revive. |
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Week Ahead Economic Overview [18-22 Feb]: Flash PMIs released for US and eurozone
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| 15 February 2013 |
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| The health of the global economy in February will come into focus with the publication of the flash PMIs on Thursday. The Markit-produced business surveys have picked up in recent months, showing accelerating growth of the US and German manufacturing economies in January. |
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US industrial production growth trend hits 11-month high despite January dip
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| 15 February 2013 |
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| Industrial production fell 0.1% in January, confounding analysts' expectations of a 0.2% increase. The downturn was led by a 0.4% drop in manufacturing output. However, December’s industrial production numbers were revised up, from 0.3% to 0.4%, and November had seen a 1.4% increase. The January data therefore need to be looked at in part as an adjustment of production levels from the strong upturn seen late last year. |
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Official data confirm surveys, as Eurozone GDP shows largest fall since early-2009
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| 14 February 2013 |
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| Eurozone GDP contracted 0.6% in the final quarter of 2012, a steep contraction that was identified by PMIs well in advance of official data. The surveys have since shown that the downturn eased at the start of 2013. |
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Gloomier Bank of England sees monetary policy alone as insufficient to generate robust growth
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| 13 February 2013 |
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| The Bank of England revised down its growth forecasts in its latest quarterly Inflation Report and hiked its expectations for inflation. However, it is clear that the Bank's decisions on monetary policy will not be determined by the rate of inflation for the foreseeable future, and instead be guided by the pace of economic recovery and expectations of inflation, which remain fairly well-anchored. |
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Eurozone industrial production suffers steepest quarterly fall since early-2009
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| 13 February 2013 |
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| Industrial production rose across the euro area in December, but the increase follows steep falls in each of the previous three months and care should therefore be taken in interpreting this single data point as the start of a recovery. The data nevertheless add to survey evidence which suggest that the region's economy is showing signs of being on the mend. |
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UK inflation stuck at 2.7% despite weak demand
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| 12 February 2013 |
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| UK inflation remained stuck at 2.7% for the fourth month running in January, according to the Office for National Statistics. Retail price inflation rose from 3.1% to 3.3%, its highest since last April. |
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French industrial sector sees steepest quarterly downturn for almost four years
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| 11 February 2013 |
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| The French industrial sector suffered the steepest decline in output since the height of the financial crisis, official data for the end of last year indicated. The data confirm the message from gloomy business surveys which also suggest that the sector’s downturn persisted, and possibly steepened, at the start of 2013. |
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Chinese export growth surges in January, inflation cools
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| 08 February 2013 |
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| Strong growth of China’s exports in January add to evidence that the world’s second largest economy is seeing a further acceleration in the pace of economic growth at the start of 2013. In signalling a revival of worldwide trade flows,. the data also bode will for the global economy. |
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Week Ahead Economic Overview [11-15 Feb]: Eurozone GDP to show deepening recession
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| 08 February 2013 |
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| The first estimate of eurozone GDP in the final three months of 2012 is expected to show the region contracting for the third successive quarter. A decline of at least 0.3% is likely, pointing to a deepening downturn after the 0.1% contraction in the third quarter. |
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Further signs of US upturn as exports jump 2.1% in December
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| 08 February 2013 |
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| Trade data for December paint a reassuring and encouraging picture of the US economy at the end of last year, suggesting the economy did not fare as badly as the initial GDP estimate suggested in the fourth quarter. The data also add to an increasingly bright picture of the global economy at the turn of the year. |
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European auto sector stabilises in January
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| 07 February 2013 |
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| Having undergone the steepest downturn since the height of the financial crisis last year, January PMI data for the European automobiles industry raised the likelihood of a recovery in business conditions within the sector in early-2013. Although new orders continued to fall, the rate of decline was the weakest since last February and output was broadly stable. |
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Signs of UK upturn as production and exports rise in December
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| 07 February 2013 |
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| Manufacturing and trade showed signs of renewed life in December, adding to indications that the UK economy gathered momentum at the end of last year. The improving trends in output and exports mean there is a reduced risk that the country slid into a triple-dip recession, but this of course depends on the momentum being sustained during the first quarter, which is by no means assured. |
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German industrial sector shrinks at fastest pace since 2009
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| 07 February 2013 |
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| Manufacturing output in Germany is falling at the fastest quarterly rate since early 2009, according to official data which are now confirming the downbeat messages from gloomy business surveys. However, those same surveys are now indicating a revival of the sector as we move into 2013. |
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HSBC EMI: Emerging markets growth gains momentum in January
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| 06 February 2013 |
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| The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, rose from 53.0 in December to 53.9 in January. That was the highest figure since February 2012, and only slightly lower than the seven-year long-run average of 54.2. |
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UK PMI surveys highlight the risks of nominal GDP targeting
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| 06 February 2013 |
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| The PMI surveys signalled a return to growth of the UK private sector economy in January, and have also moved back to a level consistent with policymakers keeping monetary policy on hold. This contrasts with the latest available GDP numbers, which signal a deteriorating economy and would support the case for further policy stimulus. |
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UK PMIs signal economy’s return to growth in January
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| 05 February 2013 |
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| Business activity in the UK picked up at the start of the year, according to the PMI surveys, pointing to a return to growth of the UK economy and greatly reducing the likelihood of the country falling back into a “triple-dip” recession. |
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Eurozone downturn eases but national divergence hits record high
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| 05 February 2013 |
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| At 48.6 in January, from 47.2 in December, the Markit Eurozone PMI Composite Output Index rose to a ten-month high and came in above its earlier flash estimate of 48.2. Although signalling a further deterioration in output of the Eurozone private sector economy, the rate of decline has now eased for three straight months. |
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Slower US expansion acts as drag on wider global economic upturn
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| 05 February 2013 |
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| Global economic growth slowed slightly in January compared to December’s nine-month high, according to purchasing managers’ surveys, but remained well above the lows seen last summer. The lower pace of expansion was also limited to the US, with the UK and Japan returning to growth, upturns seen in almost all major emerging markets and the eurozone ownturn easing again. |
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Week Ahead Economic Overview [4-8 Feb]: Service sector PMIs and ISM non-manufacturing
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| 01 February 2013 |
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| The week sees the publication of worldwide service sector PMI numbers for January, as well as monetary policy meetings at the ECB and Bank of England. |
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Growth of UK manufacturing production at 16-month high in January
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| 01 February 2013 |
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| UK manufacturing production continued to expand at the start of 2013, following a further increase in new orders and ongoing efforts to clear backlogs of work. The labour market also continued to stabilise following the job losses seen through much of the middle of last year. |
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Eurozone manufacturing recession eases at start of 2013
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| 01 February 2013 |
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| The downturn in the Eurozone manufacturing sector eased at the start of 2013, as rates of decline in production and new orders both slowed. |
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US: Solid growth of payrolls fails to prevent rise in jobless rate
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| 01 February 2013 |
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| A solid gain in US employment provides welcome reassurance that the US economy is healthier than the surprise fall in fourth quarter GDP and is not at risk of a renewed recession. However, policymakers will no doubt remain unimpressed at the pace of the job market recovery, suggesting there is no end in sight for Fed stimulus. |
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Global manufacturing growth hits ten-month high in January
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| 01 February 2013 |
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| The global economy showed further signs of pulling out of the soft patch seen last year, with worldwide manufacturers reporting the first significant improvement in business conditions since last April. |
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Eurozone business sentiment rises for third month running
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| 30 January 2013 |
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| An increase in business sentiment for the third month running in January provides further evidence that the Eurozone’s recession is showing signs of moderating as we move into 2013. |
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Surprise fourth quarter economic contraction in the US
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| 30 January 2013 |
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| The US suffered a surprise economic contraction in the final quarter of last year, but this is not likely to be the start of a double-dip recession. While vindicating the Fed's aggressive policy stance, the economic weakness late last year should not be a cause of renewed concern for policymakers. |
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UK official data confirm fourth quarter economic contraction
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| 25 January 2013 |
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| The UK economy contracted more than expected in the final three months of last year according to official data, confirming earlier signs of weakness from the business surveys. The disappointing numbers bang another nail in the coffin of the UK's AAA credit rating as the country faces the growing risk of a triple-dip recession. |
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Germany: Business cycle upswing signalled as IFO survey rises in line with PMI
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| 25 January 2013 |
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| The IFO survey of German business conditions rose sharply in January, matching a similar rise in the flash PMI, published on Thursday. The positive survey data indicate that the economy is reviving as it enters 2013, recovering from a disappointing end to 2012. |
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Week Ahead Economic Overview [28 Jan-1 Feb]: US GDP growth expected to have slowed in Q4
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| 25 January 2013 |
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| The most important economic releases will come out of the US. The first estimate of US GDP in the final quarter of last year is expected to show the annualised rate of growth slowing from 3.1% in the third quarter to just 1.3%, according to a Reuters poll. However, such a weak number would provide a misleading guide to the underlying health of the US economy, with much of the deterioration due to weakness in the inventories and government spending components. Private sector growth, on the other hand, looks to have possibly accelerated, according to the business surveys, painting a promising picture of a return to faster growth in the first quarter. |
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Chinese Manufacturing PMI starts 2013 on two-year high
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| 24 January 2013 |
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| China’s manufacturing economy grew at the fastest rate for 24 months in January. The flash manufacturing PMI for China, produced by Markit on behalf of HSBC, rose for a fifth successive month, up from 51.5 in December to 51.9, its highest since January 2011. |
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Eurozone downturn eases as PMI hits ten-month high
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| 24 January 2013 |
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| The Markit Eurozone PMI Composite Output Index rose for the third consecutive month in January according to the flash estimate, up to a ten-month high of 48.2 from 47.2 in December, and up sharply from October’s post-crisis low of 45.7. |
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Worldwide manufacturing upturn gains further momentum in January
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| 24 January 2013 |
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| Purchasing manager surveys indicate that the global economy has picked up further momentum at the start of 2013. Markit’s flash manufacturing PMIs, which cover the world’s three largest goods-producing economies, showed growth rising to 24- and 22-month highs in China and the US respectively, while the euro area saw the smallest fall in activity for ten months. |
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UK labour market shows resilience as employment climbs to record high
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| 23 January 2013 |
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| The UK labour market continued to show surprising resilience in the face of signs of renewed economic weakness in the fourth quarter, with employment rising to a new all-time high and unemployment dropping to the lowest since the spring of 2011. |
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UK government borrowing higher than expected as weak economic growth hits tax revenues
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| 22 January 2013 |
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| Government borrowing appears on course to be higher than planned for the current year, as austerity measures have failed to reduce government spending and weak economic growth has resulted in disappointing tax revenues. The danger is that the data add to the risk of the UK losing its AAA credit rating, a risk that will intensify significantly if Friday's GDP report shows the UK entering a new downturn. |
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Steel-user PMI data as a leading indicator of steel production
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| 22 January 2013 |
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| An insight into future steel production can be gleaned from surveys of how busy steel-using companies are, looking at their production, order book and warehouse inventory trends. In this respect, PMI data from Markit’s worldwide surveys of steel-intensive manufacturers act as a useful leading indicator of steel production, available up to six months before comparable data from other sources for the US, Europe and Asia. |
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Week Ahead Economic Overview [21-25 Jan]: UK, South Korean GDP and worldwide Flash PMIs
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| 18 January 2013 |
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| Flash PMIs for China, the Eurozone and the US are published by Markit on Thursday, as is South Korean Q4 GDP. The UK publishes the first estimate of Q4 GDP on Friday. |
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UK industrial production suffers steepest downward trend since April 2009
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| 11 January 2013 |
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| Industrial production data for November add to the likelihood of the UK economy having contracted in the final quarter of last year. There are signs that the situation in manufacturing improved in December, but a deteriorating trend in the far larger service sector and forecasts of heavy snow for January have raised the possibility that the economy could contract in the first quarter. |
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Week Ahead Economic Overview [14-18 Jan]: China GDP growth to have gained pace in Q4
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| 11 January 2013 |
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| An overview of the week's economic releases. |
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Emerging market growth accelerates slightly in Q4 as manufacturing sector expands
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| 10 January 2013 |
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| The final EMI report for 2012 indicated a slight acceleration in economic growth across emerging markets worldwide. That said, total activity rose at a pace that remained weaker than the average shown over the four years since the 2008 financial crisis. |
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China's trade surplus grows in December as exports revive
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| 10 January 2013 |
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| A revival of export growth helped drive China’s trade surplus sharply higher in December. The trade data signal an encouragingly strong end to 2012, boding well for the Chinese economy as well as indicating that global economic growth has also turned up, corresponding with recent business survey evidence. |
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Global Manufacturing PMI as a leading indicator of commodity prices
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| 10 January 2013 |
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| Historical analysis of the JP Morgan Global Manufacturing PMI, compiled by Markit, illustrates the predictive power of the index for tracking movements in commodity prices. |
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UK trade deficit narrows as rising goods exports add to signs of manufacturing revival
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| 09 January 2013 |
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| An upturn in goods exports in November adds to signs that the manufacturing economy showed signs of improving in the final quarter of last year. However, the trade deficit looks likely to have risen compared to the third quarter, and remains very high by historical standards, thereby acting as a drag on economic growth and adding to the possibility that the UK contracted at the end of last year. |
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Steep fall in German industrial production raises spectre of fourth quarter GDP slide
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| 09 January 2013 |
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| Official industrial production data have moved closer into line with survey data which have indicated that the German economy contracted in the fourth quarter of 2012, with the possibility of a far steeper than previously expected decline. |
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Slumping exports add to fourth quarter downturn worries in Germany
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| 08 January 2013 |
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| A steep fall in exports adds to evidence that the German economy slid into contraction in the final quarter of 2012. The business surveys suggest that the rate of decline eased in December, and the economy may return to growth in the first quarter of 2013, but weak eurozone demand is likely to impede the pace of recovery. |
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France: Slumping exports add to fourth quarter downturn worries
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| 08 January 2013 |
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| French exports fell sharply in November, according to official data, matched by a similar steep fall in imports. Survey data suggest that a further decline in exports is on the cards for December, raising the prospect of a renewed economic downturn in the final quarter of 2012. |
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Global economy ends 2012 on nine-month high
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| 08 January 2013 |
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| Global economic growth edged up to a nine-month high in December, according to the global PMI surveys, rounding off the best quarter since the first three months of the year. Ongoing robust growth in the US was accompanied by faster growth in most key emerging markets, as well as an easing in the rate of contraction in the Eurozone. |
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Output trends improve across most European sectors in December, with banks in particular returning to growth
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| 08 January 2013 |
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| Although 14 of the 22 sectors covered by detailed sector PMI data for Europe posted a reduced level of output in December, the rates of contraction slowed in half. Declines eased particularly in healthcare equipment & services and travel & leisure, although moderate reductions were still recorded in both cases. |
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Activity at Hotels & Restaurants in Spain falls sharply after VAT rise
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| 04 January 2013 |
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| In September 2012, Spain raised both its headline rate of VAT and the reduced rate eligible on certain items to help cut the budget deficit. Importantly, reclassifications also took place meaning that some goods and services were moved from the reduced rate to the general rate. A number of the areas reclassified were part of the Hotels & Restaurants sector, and the early signs are that the rise has had a strong negative impact on already weak demand in this part of the economy. |
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Slowest decline in Madrid economic output for a year-and-a-half
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| 04 January 2013 |
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| PMI survey data indicate that the economic downturn has moderated sharply in the Madrid region, providing a ray of hope while the country as a whole remains mired in a steep downturn. |
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Ireland bucks Eurozone downturn as growth accelerates in the fourth quarter
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| 04 January 2013 |
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| The Irish economy continues to recover modestly, in contrast to the picture seen across much of the rest of the Eurozone. The latest official data showed gross domestic product rising in the third quarter of 2012, and the more timely PMI data meanwhile suggest that further growth was recorded by the economy in the final three months of the year. By comparison, the Eurozone as a whole remains in a downturn. |
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UK: Renewed weakness in December PMI surveys rounds off worst quarter for three-and-a-half years
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| 04 January 2013 |
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| The UK saw a renewed bout of economic weakness at the end of 2012. The all-sector Output Index from the three PMI surveys fell below the 50.0 no change level for the second time in three months in December, dropping from 50.1 in November to 49.9. Over the fourth quarter as a whole, the PMI surveys have signalled the worst performance since the second quarter of 2009. |
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Week Ahead Economic Overview [7-11 Jan]: No change in policy expected at the BoE and ECB
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| 04 January 2013 |
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| An overview of the week's economic releases. |
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Eurozone downturn eases at the end of 2012. Germany returns to growth, but recessions continue in France, Italy and Spain
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| 04 January 2013 |
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| The Eurozone downturn eased further at the end of 2012, as rates of contraction in economic output and new business slowed. At a nine-month high of 47.2 in December, the Markit Eurozone PMI Composite Output Index was nonetheless weaker than the earlier flash estimate and below the 50.0 no-change mark for the eleventh successive month. |
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Global economic growth at nine-month high in December
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| 04 January 2013 |
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| Global private sector output expanded at the fastest pace for nine months in December, rounding off the strongest quarter since Q1 2012. Trends in new orders and employment also
improved, but there were further signs of companies supporting output levels by working through backlogs of work. |
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Eurozone manufacturing ends 2012 mired in recession, as demand from domestic and export markets remains weak
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| 02 January 2013 |
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| The Eurozone manufacturing sector ended the year on a weak footing, with levels of production and new orders both contracting further in December. Rates of decline accelerated slightly over the month and were stronger than the earlier flash estimates. |
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UK manufacturing production and new orders expand in December
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| 02 January 2013 |
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| The UK manufacturing sector ended 2012 on a positive note, with levels of production and new orders rising at faster rates in December. The labour market also showed signs of stabilising, with employment broadly unchanged over the month. |
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Global manufacturing holds steady at end of 2012
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| 02 January 2013 |
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| The global manufacturing sector continued to stabilise in December. At 50.2, from 49.6 in November, the JPMorgan Global Manufacturing PMI – a composite index produced by JPMorgan and Markit in association with ISM and IFPSM – lifted back above the no-change mark of 50.0 for the first time since May 2012. |
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