- Weekly: **Unemployment Initial Claims Data have been revised**
- US: Housing Starts by State and Region (Feb)
- CPB World Trade Monitor (Jan)
- CPB World Trade Monitor (Jan)
- France: Registered Unemployed & Job Vacancies (Feb)
- US: Household Employment for States and Regions (Feb)
- US: Wholesale Trade Revisions, Advance Durable Goods (Feb)
- Manufacturing Survey - Markit US (Flash - Mar), Composite Survey - US (Flash - Mar), Services Survey - US (Flash - Mar)
- more updates...
Economy in Brief
Correction to Unemployment Insurance Weekly Claims
The Department of Labor has issued a correction to yesterday's annual revision to seasonally adjusted weekly unemployment claims...
EMU PMIs Are Off to the Races...Farewell Mediocrity?
The PMI rankings for the manufacturing and service sector PMIs in the EMU are suddenly off the chart...
U.S. New Home Sales Improve While Prices Decline
Sales of new single-family homes increased 6.1% (12.8% y/y) during February to 592,000 units (AR)...
Kansas City Federal Reserve Factory Index Strengthens; Expectations Surge
The Kansas City Fed reported that its index of regional manufacturing sector business activity increased to 20 during March...
U.S. Initial Unemployment Insurance Claims Rise
Initial claims for unemployment insurance increased to 258,000 (-3.0% y/y) during the week ended March 18...
U.K. Retail Looks Less Bulletproof
For the most part, the assessments embodied in the March survey from the UK's CBI are being taken as being upbeat...
by Robert Brusca August 16, 2016
The ZEW index of expectations is compiled from the survey results of German financial experts. Expectations recovered in August to post a 0.5 net reading, a positive assessment for expectations, up from -6.8 in July. July had been a sharply lower reading, falling from 19.2 in June. So there is very little rebound after the July setback. While the Bundesbank has expressed a minimized notion of the impact of Brexit on data, growth and policy, the fact is that a lot remains to be settled and until it is done here is likely to be knock-on effects. The ZEW experts seem to understand this and they do not seem to be drinking the Bundesbank Kool Aide with their usual gusto. The Bundesbank seems mostly trying to head off Brexit as a reason for the ECB to step up stimulus. It is far from clear that it is a wise choice of action, but it is not a surprising tact from the Bundesbank.
The current index, after a dip in July, has sprung back to an even stronger reading in August. In this measure, the Bundesbank's view of the resilience of the German economy is borne out. The current index sank from 54.5 in June to 48.9 in July but rebounded to stand at 57.6 in August.
The current index was last stronger than this back in January 2016. And the expectations index was last weaker last month. But apart from that, we go back to October 2014 to find a weaker expectations reading.
The current index is stronger than its August value only 15.5% of the time historically. The expectations index is stronger 75.5% of the time. But the current and future indexes standings are telling quite different tales about what is happening vs. what is likely to happen. This should create some policy dilemma, but it has not for the Bundesbank that wants to draw a line under all of this stimulus and just put a stop to it.
The ZEW financial experts downgraded both stocks and bonds this month, for the second month in a row. The bond assessment is outright negative while the stock assessment is modest but positive. This seems to echo the thought process we see in other national markets as well. But ZEW experts have been negative on bonds for too long. Their run of negative assessments extends all the way back to January 2009. They have left some fine bond market gains on the table.
The ZEW experts' stock market rating was negative once since 1994 that was in the month of May 2010. However, the chart run at the top of this report shows a definite connection to the performance of the DAX and the value of the ZEW expectations reading. Expectations hit a peak in 2014 and a lower peak in 2015. After the second peak, expectations have stayed much lower and the German stock market has also been in a period of consolidation. In Germany, neither the Bundesbank nor the markets seem to be too sure where things are going next. But the bloom is off the rose.in the beer garden.