Week 9 | February 27 – March 3, 2023
Mr. Van Loven A. Abbu, LPT
SUMMARY
United States (USD) Highlights:
ISM Manufacturing PMI Rises to 47.7, Showing Signs of Improvement:
The ISM Manufacturing PMI increased to 47.7 in February 2023, up from 47.4 in January, which was the lowest since May 2020, but fell short of the 48 expected. The number indicated a fourth consecutive month of declining manufacturing activity, with firms continuing to decrease outputs in order to better meet demand in the first half of 2023 and plan for growth in the second half of the year. Customers’ inventories index remained at ‘too low’ levels (46.9 vs 47.4), a positive for future production. New orders (47 vs 42.5) and order backlogs (45.1 vs 43.4) decreased at a slower rate, and new orders (47 vs 42.5) contracted at a slower pace. Production, on the other hand, declined more sharply (47.3 vs 48), while employment fell (49.1 vs 50.6), despite the fact that enterprises continue to suggest that they would not significantly reduce head counts since attitude is favorable for the second half of the year. Meanwhile, price pressures grew (51.3 vs 44.5), strengthening buyers’ and sellers’ agreement to place orders in the near future.
Source: Institute for Supply Management
Euro Zone (EUR) Highlights:
Eurozone Consumer Confidence at One-Year High in February 2023:
The Eurozone consumer confidence barometer was verified at -19 in February 2023, the highest since February 2022, on hopes that inflation would fall as energy issues eased due to mild weather and the area would escape a recession this year. Consumer confidence in the European Union also improved (+1.5 points to -20.6) for the sixth month in a row. Consumers were more optimistic about both their household’s past and future financial status. The latter resulted in increased plans to make large purchases. Consumers’ perceptions of their country’s overall economic status improved significantly.
Source: European Commission
Eurozone Unemployment Rate Near Record Low Despite Modest Increase in January:
The seasonally adjusted unemployment rate in the Eurozone was 6.7% in January 2023, unchanged from December and somewhat higher than market expectations of 6.6%. Yet, the unemployment rate remains extremely close to the record low of 6.6% set in October. It was higher a year ago, at 6.9%. The number of jobless rose by 43 thousand from the previous month to 11.169 million. Nevertheless, the youth unemployment rate, which measures job searchers under the age of 25, rose to 14.4% in January from a seven-month low of 14.3% the previous month. Among the main Eurozone economies, Spain (13%), Italy (7.9%), and France (7.1%) had the highest unemployment rates, while Germany (3%) had the lowest.
Source: EUROSTAT
Eurozone Inflation Remains High at 8.5% in February, Fueling Hawkish ECB Stance:
A preliminary estimate shows that consumer price inflation in the Eurozone fell to 8.5 percent in February 2023, the lowest since last May, but above market estimates of 8.2 percent. The new statistics contributed to evidence that inflationary pressures in Europe remained high, bolstering hopes that the European Central Bank will stay hawkish for a longer period of time. Energy inflation fell to 13.7 percent from 18.9 percent in January, but prices for food (15.0 percent vs 14.1 percent), non-energy industrial products (6.8 percent vs 6.7 percent), and services climbed at a higher rate (4.8 percent vs 4.4 percent). Inflation in the Eurozone’s main economies surged in Germany, France, Spain, and the Netherlands, while it decreased in Italy. Conversely, the core rate, which includes volatile commodities like energy and food, reached a new high of 5.6 percent in February.
Source: EUROSTAT
Japan (JPY) Highlights:
Japan’s consumer confidence reaches highest level since August:
The consumer confidence index in Japan increased to 31.1 in February 2023 from 31.0 the previous month, above market expectations of 32.0. This was the highest rating since August 2022, as the economy rebounded from pandemic disruptions, with households’ confidence in both income growth (up 0.6 point from January to 36.2) and employment rising (up 0.8 points to 38.0). Meanwhile, attitudes for general livelihood have eroded (down 0.8 points to 27.0). Also, the inclination to purchase long-lasting items was lower (down 0.5 points to 23.0).
Source: Cabinet Office, Japan
Japan’s Labor Market Tightens as Unemployment Rate Falls to 2.4%:
In January 2023, Japan’s jobless rate was surprisingly 2.4 percent, compared to December’s number and market predictions of 2.5 percent. The number of jobless fell by 40 thousand to 1.67 million, while employment increased by 180 thousand to 67.44 million, the lowest reading since February 2020. The labor force climbed by 120 thousand to 69.11 million, while those who were not working decreased by 220 thousand to 41.02 million. In January, the non-seasonally adjusted labor force participation rate was 62.2 percent, the same as in the previous year. The unemployment rate was 2.8 percent a year ago. Nevertheless, the jobs-to-applications ratio remained steady in January at 1.35, remaining at its best level since March 2020 for the fourth month in a row.
Source: Ministry of Internal Affairs & Communications
Australia (AUD) Highlights:
Australian economic growth slows to 0.5% in Q4 of 2022 amid rising cost pressures:
The Australian economy expanded 0.5% year on year in Q4 2022, less than market expectations of a 0.8% increase and following an upwardly revised 0.7% increase in Q3. This was the fifth straight period of economic expansion, although it was the slowest in the series, with household spending increasing at the slowest rate in five quarters (0.3% versus 1.0% in Q3) due to high cost pressures and interest rates. The household savings ratio declined from 7.1% to 4.5%, the lowest since the third quarter of 2017.
Source: Australian Bureau of Statistics
New Zealand (NZD) Highlights:
New Zealand’s ANZ Business Outlook index sees significant jump in February:
The ANZ Business Outlook Index in New Zealand rose 9 points to -43 in February 2023 from -52 the previous month, marking the highest level since last October, with own activity outlook improving (-9.2 versus -15.8 in January), led by manufacturing and services. Nevertheless, export intentions were nearly level (-5.2 vs -5.4), investment intentions were off their lows but remained restrained (-4.9 vs -13.7), and employment intentions were on the rise (-3.4 vs -11.1). Meanwhile, price intentions continued to fall (58.8 vs 62.4), despite an increase in profit expectations (-37.7 vs -42.6) and a rise in credit ease (-49.8 vs -53.7), as well as indicators of improved capacity utilization (-3.2 vs -5.3). Nonetheless, inflation forecasts were stable at roughly 6%, while cost estimates remained high (88.3 vs 91.3). Residential building (-79.2 vs -84.0) and commercial construction (-17.2 vs -20.0) remained weak.
Source: ANZ Bank New Zealand
Canada (CAD) Highlights:
GDP:
In Q4 of 2022, the Canadian economy stopped from the previous quarter, ending five straight quarters of growth and following a 0.7% gain in Q3. Inventory buildup for manufacturing and retail items fell in the fourth quarter, resulting in a CAD 29.8 billion drop in inventory investment. Meanwhile, the Bank of Canada’s increased interest rates impeded housing investment (-2.3%), prolonging the drop in total fixed capital formation (-0.7% vs -1.7% in Q3). Consumption spending in the Canadian economy, on the other hand, increased by 0.5% (vs 0.3%), supported by both household consumption (0.5% vs -0.1%) and government expenditure (0.1% vs 0.6%). Meanwhile, net foreign demand contributed favorably to GDP growth, as exports increased by 0.2% while imports decreased by 3.2%.
Source: Statistics Canada
The information and opinions in this report are for general information use only. This report is subject to change without prior notice. The individual investing goals and financial status of any particular recipient have not been taken into consideration in the preparation of this report. While the material in this article was gathered from sources that the author considered to be dependable, the author neither guarantees nor accepts responsibility for any direct, indirect, or consequential losses that may arise from the use of any such information or opinions.