Monthly Change for May
Provided by: Rightmove
Official Release: PDF

Rightmove HPI y/y: 2.2%, pr. 1.3% (Apr), pr. 5.0% (Mar), 5.8% (Feb)
Avg. Prices: £242,500 pr. £239,521

The Righmove housing index rose 1.2% in May, though the index was driven up by spring sellers' of larger homes in the south. Six out of 10 regions still experienced declines. The potential pool of buyers is small as mortgage lenders make it harder to finance loans. The report believes that home sellers should price their properties more realistically, in order to "help affordability throughout the chain."

Highlights from the Release:

• "Discretionary spring sellers’ of larger homes in the south push up average national prices, and mask year on year falls in six out of ten regions.
• Average asking prices of newly marketed property increase by 1.2% (£2,879) hitting a new record of £242,500.
• New seller pricing now 0.3% (£858) above peak boom prices, delaying return to buyer affordability and recovery in sales volumes.
• Mortgage tap ‘turned off’ in April as lenders play it safe and look after number one, rather than work together to help the housing market."

For April
Provided by: Conference Board

The leading index showed a 0.1% gain, matching March's value. Prior to March, the index has been negative for 5 months. The categories that boosted the index were stock prices, interest rate spreads and housing permits. Negative contributors were average weekly hours and consumer expectations. With the index staying positive, it should be a good indication for the US economy as it flirts with recessionary conditions. Though the economic outlook still remains weak, the data suggests that the economy may not weaken further.

The coincident index, which focuses more on current economic activity remained unchanged in April, remaining at 106.9 (2004=100).

The RBA minutes initially cited slowdown in the economy, and then qualifying the slowdown in demand to be "significant". There are also some positives such as an improvement in the financial market in April. At the moment, the approach the RBA will take is to limit inflation as it is now above 4% annually. In conclusion from the release:

Board members noted the importance of reducing inflation if Australia was to avoid a prolonged period of economic difficulty. The staff forecast was that inflation would return to the target by the end of the forecast period in 2010, if the recent slowing in demand was sustained. This would most likely be associated with output growth falling to quite low rates in the year ahead, something that was required to ease pressure on capacity and slow the pass-through by businesses of higher input costs. Even so, members noted that the forecast path for inflation involved it remaining above 4 per cent for much of 2008. This carried the risk that expectations of high ongoing inflation could develop, which could in turn affect price- and wage-setting behaviour.

With oil prices surging and seeing no brake yet, the RBA is likely to retain a hawkish stance and will not consider lowering rates yet.

For April
Provided by: The Federal Statistics Office
Official Release: Press Release

PPI y/y: 5.2%, forecast 4.7%, pr. 4.2 (Mar), 3.8% (Feb)

Producer prices in Germany accelerated at the fastest annual pace in nearly 2 years. In annual terms producer inflation was up 5.2%, and on the month prices were up 1.1%. The economy continues to digest high energy prices, and higher inflation will curb consumer's appetites. Energy prices were 12.6% higher compared to last year, with oil up 17.8%. If energy was taken out of the equation prices would have increased 2.7%. The ECB has made it clear that they are chiefly concerned with bringing inflation under control, and data like this supports the Governing Council either holding rates at 4%, or if they deem it necessary perhaps even increasing rates.

The Euro got a strong boost overnight, and reached a new high for the week above 1.5650. 

For April
Provided by: Swiss Federal Statistics Office (main page)
Official Release: Table of Current and Past Data

Prices y/y: 3.6%, forecast 3.4%, pr. 3.9% (Mar), 3.6% (Feb)

Producer prices for Switzerland rose 0.7% on the month in April, higher than expectations. The annual rate came in at 2.6%, higher than forecasts as well, but a slower rate than in March. Higher producer inflation, a leading indicator for the economy, will put pressure on the National Bank of Switzerland to keep rates steady or to increase rates. In an environment of general Dollar weakness overnight, the Franc had about a 150 pip rally setting a new 2 week low. It also managed to test the 100.00 level versus the Yen.  

For May
Provided by: ZEW Indicator of Economic Sentiment
Official Release: Press Release

The ZEW Economic Sentiment improved slightly in May, and beat expectations of a smaller increase. Expectations increased while the current economic situation fell. 

From the Release: "Economic expectations for the euro zone stabilized in May. The indicator slightly increased by 1.2 points and now stands at minus 43.6 points. The indicator for the current economic situation in the euro zone dropped by 4.1 points and now stands at 11.4 points."

After a month of deep decline, wholesale trade rose 0.6%, as building materials(2.1%) and machinery and electronic equipments(1.7%) pushed up sales. Auto sector declines have been a main contributor. For March, the sector rose 0.5%. The gains were somewhat offset by a 1.1% decline in the personal and household goods sector. For the quarter however, wholesale sales still shrank 0.8%. From the release:

Sales increased by an estimated 0.6% to $42.7 billion, recouping some of the 2.1% decline reported in February.

On a quarterly basis, wholesale sales fell 0.8% in the first quarter, following a 0.3% decline in the fourth quarter of 2007. First quarter sales were affected by a large drop in the motor vehicles trade group, which registered its fourth consecutive quarterly decline, as well as continued weakness in the beleaguered lumber sector. In marked contrast, the "other products" trade group registered its highest quarterly growth in five years, thanks to the continuing surge in worldwide demand for agricultural supplies.

After hitting a peak in June 2007, the level of wholesale sales has softened somewhat over recent months. Much of this has to do with the weak demand for motor vehicles and lumber, both of which have been hit by the slowdown in the US economy. Prior to this, wholesale sales had undergone a period of sustained growth that began in mid-2003.

Taking price fluctuations into account, the volume of sales edged down 0.1% in March.

For April

See main PPI comment above for analysis, more data and excerpt from main release.

For May
Provided by: IFO Institute of Economic Research

Expectations Index: 97.3, forecast 96.4, pr. 96.8 (Apr), 98.4 (Mar)
Current Conditions: 110.0, forecast 108.0, pr. 108.4

The Ifo Business Confidence Index for Germany showed that it's economy is seen to be sound and is expected to be resislient for the 6 months ahead. As Germany is the largest economy in the EMU, the ECB will note that as signs of economic slowdown taper away, there will be no need to cut rates and no barrier to raise them when they focus entirely on price stability. However, as Ifo president Hans-Werner noted that this only pared some of the losses to the confidence index during April. Also from the release:

In manufacturing the business climate indicator has brightened. Both the current situation and the six-month business outlook have been assessed somewhat more positively than in April. Export opportunities continue to be appraised as good, but firms are not quite as optimistic as in the previous month. They continue to plan moderate increases in employment.

In the construction industry the business climate indicator remains largely unchanged. For the third time in succession, the firms have assessed their current business situation somewhat less critically, but they are more reserved with regard to the six-month outlook than in April. In wholesaling and in retailing, the business climate index has recovered somewhat after clear declines in the previous month. Both wholesalers and retailers have assessed their current situation more favourably, and both are also somewhat more confident with regard to the six-month outlook.

For April

M4 y/y: 11.2%, forecast 11.1%, pr. 11.9% (Mar), 12.4% (Feb)

For May
Provided by: Credit Suisse
Official Release: Press Release
Financial Market Report: PDF 

The Credit Suisse/Center for European Economic Research (ZEW) Expectations index improved, though it is still negative overall. The number of respondents that believe the economy will deteriorate shrank 10.9% to 65%. Inflation is expected to continue to rise (54% of respondents, up 17.5%). The number of analysts expecting short term interest rates to rise increased 12.7% to 22.9%, though 62.5% see no change.

The Swiss Franc continued its gains on the Yen, Euro and Dollar that started in yesterday's session following higher producer prices data.      

From the Release:

"The results of this month's survey conducted in conjunction with the Financial Market Test Switzerland paint a more positive picture of economic momentum on a six-month horizon, although respondents continue to expect the economy to weaken. Nearly 65% of the participants in the May survey still predict that the economy will deteriorate, but this group shrank by 10.9 percentage points versus the previous month. Almost one-third of the experts now expect to see no change in the economy in the medium term. The corresponding balance of indicators thus increased by 11 points to the -60.4 mark." 

For April
Latest Release Provided by: Statistics Canada

CPI y/y: 1.7%, forecast 1.4%, pr. 1.4%
Bank of Canada Core CPI m/m: 0.3%, forecast 0.2%, pr. 0.2%
Bank of Canada Core CPI y/y: 1.5%, forecast 1.4%, pr. 1.3%

Consumer prices in Canada urged above expectations in April. The monthly figure doubled expectations, while annual all-item prices accelerated to 1.7%. Core prices were up as well, increasing 0.3% on the month and 1.5% on the year, both above expectations. The report cites higher gasoline prices and less downward pressure from passenger vehicle prices as the main culprits. Gasoline prices are up 11.6% between April 2007 and April 2008, increasing from 7.9% in last month's report. Excluding gasoline prices the annual pace was up 1.3%. Prices of fuel oil surged 36.9% compared to April of last year. Mortgage interest cost and new housing prices also put upward pressure on the index.

The news helped the Canadian Dollar break lower vs the US Dollar, reaching 0.9818 in the hour following the release, though that may have been an intra-day low for the day.

From the Release:

"Consumer prices accelerated for the first time in six months in April in the wake of higher gasoline prices and fewer incentives on passenger vehicles. The Consumer Price Index (CPI) rose 1.7% between April 2007 and April 2008, up from the 1.4% increase in March. This was the first acceleration of the all-items index since November 2007.

Gasoline was the main contributor to both the acceleration and the 12-month increase of the all-items index. Gasoline prices rose 11.6% between April 2007 and April 2008, compared with a 7.9% increase posted a month earlier."

For March
Provided by: Ministry of Economy, Trade and Industry

All Industries Activity Index y/y: -0.9%, pr. 1.7% (Feb), pr. 0.6% (Jan)

Japan's all-industries index, which is a broad measure of economic activity, rose 0.5% between March and February beating forecasts. It had declined 1.3% in February. The monthly gain was led by an increase in services as industrial ouput was down. On the year, the index was down 0.9%.

Preliminary Version for 1st Quarter.
Provided by: Office for National Statistics

Business Investment y/y: 3.7%, forecast 5.5%, pr. 5.3%

Spending by businesses in the UK for investment took a pretty steep hit in the 1st quarter. Compared to the 4th quarter, investment was down 1.4%, and the annual pace cooled to 3.7%. Both figures were far below forecasts.

From the Release: " Business investment for the first quarter of 2008 was 1.4 per cent lower than the previous quarter and is estimated to be 3.7 per cent higher than the same period of last year. The quarterly fall in business investment of 1.4 per cent is largely due to decreased capital spending by industries classified as private sector non-manufacturing distribution (down 8.3 per cent) and by private sector manufacturing (down 5.0 per cent).

The private sector manufacturing fall of 5.0 per cent was a result of a reduction in capital expenditure by metals and metal goods industries (down 20.8 per cent), chemicals and man made fibres (down 5.1 per cent), food drink and tobacco (down 16.8 per cent) and textiles, clothing, leather and footwear (down 20.7 per cent). There were no significant offsetting increases in this category."

For March - (s.a.)
Provided by: EuroStat
Official Release: PDF

New Orders y/y: -2.5%, forecast 4.8%, pr. 9.9% (Feb), 7.3% (Jan)

Euro-zone industrial new orders slid in March, with the monthly growth rate showing a 1% fall. Its the first fall after 3 months of gains. The fall was more than double what economists had predicted. The annual rate fell to -2.5%. Orders are being squeezed by a high Euro, higher oil prices and a slowing US economy. Evidence is mounting that the 2nd quarter will be much weaker than the 1st, which surprised forecasts with GDP growth of 0.7%. Germany seems to be holding up while other economies in the Euro-zone like Spain and Italy are struggling. Weaker demand from the US, a key market for exports, will only add pressure as a slowdown in domestic spending also curtais orders for industrial orders.

The Euro, which has been surging the last 2 sessions against the Dollar, reached a high at 1.5813 prior to the release and fell afterward.

For Week Ending May 17th
Latest Release Provided by: The Department of Labor

4-Week Moving Average (May 17th): 372K, pr. 367K
Continuing Claims (May 10th): 3.073M, pr. 3.073M (rev from 3.06M)

Jobless claims declined by 9,000 to 365,000. Continuing claims continued climbing higher, reaching 3.073 million matching the number for the week of May 3rd, which was revised up with this release. That means that people that have lost their jobs are finding it harder to find a replacement. The fact that initial claims fell however was Dollar positive as expectations had been for a slight increase. It means that despite a slowing economy companies may have been more reluctant to fire workers, though they may not be hiring either. The 4-week moving average for initial claims rose to 372K from 367K. This figure smooths out the volatility seen from release to release by averaging the last 4 releases. Its trend has been climbing as the economy faltered.