Greg Combet – Industrial Business News

Industrial production down for the sixth consecutive month

And we are six. For the sixth consecutive month, industrial production lost ground in terms of trends : with the decline in August (-1.8%), the balance for the first eight months of the year worsened again and reached -0.9%.

Compared to the previous month, Istat also estimates an increase of 0.3% for the seasonally adjusted index. That in any case does not change the sign of the mobile quarter, with the June-August period down by 0.3% compared to the previous three months.

The monthly seasonally adjusted index shows cyclical increases in the capital goods (+ 0.4%) and consumer goods (+ 0.3%) segments; negative variations, on the other hand, show energy (-0.9%) and intermediate goods (-0.5%).

Annual balance that is made less bitter by the growth of energy (+ 1.8%) and consumer goods (+ 0.7%), while instrumental goods (-4.9%) and intermediate goods (-3, 1%).

To avoid the sign minus a handful of sectors, among which the pharmaceutical sector stands out , while the positive moment of the food sector continues, driven above all by exports: in August the sector’s production grew by 3.1%.

10 October 2019

The largest decline is for textiles, clothing, leather and accessories (-11.3%), although it is once again the mechanical area extended to slow down the averages in particular.

Metallurgy and metal products yield 8.8% , almost seven points the means of transport, more than five machines. The global slowdown in the car market was decisive for this macro-area, with strongly reduced volumes in Germany but also in China to heavily penalize our component manufacturers.

Bags, Brexit on the agenda, the Chinese economy and German confidence

The European stock markets restart from Brexit optimism and trade war . Both disputes, in fact, seem to have found a settlement. On the British front the European side negotiator Michel Barnier has given the green light to a decisive round of negotiations, in “tunnel” mode , that is reserved. But the time is tight, because the last useful European Council before the date of divorce (31 October) is set for Thursday 17.

Furthermore, in the event of failure to reach agreement by 19, British Prime Minister Boris Johnson should ask for another extension of Brexit. On the duty front, however, the thaw between the United States and China announced last Thursday by US President Donald Trump has allowed stock markets to rebound .

PHOTOGRAPHY

Performance of the main stock indexes. Data as of 12/10/2019

Conversely, risk appetite has clipped the wings of bonds: prices have fallen and yields have risen. The 10-year BTp rate again crossed the 1% threshold, also due to the availability of new issues and the new security taken as a reference that has a longer maturity (in April 2030). However, the spread with the German Bund remains around 150 basis points, as the German Bund yield also rose to -0.44% from -0.587 at the beginning of October.

The economic picture

Both the Chinese and the American economies (and to a greater extent) have shown signs of slowing down. Investors therefore look to China where, on Friday 18, GDP is expected for the third quarter, expected at 6.1% (one decimal under the last survey), industrial production in September, estimated to increase to 5% from 4.2% and retail sales, also expected to grow at 7.8% from 7.5%.

Also from the United States the main indications come from consumption , an important part of the stars and stripes cycle, with retail sales on Wednesday 16 (0.4% in August). Then there are the regional polls from the productive world : on Tuesday 15 Empire manufacturing, calculated by the New York Fed and on Thursday 17 the Philly Fed from the busy area of Philadelphia. Finally, the Leading Index on Friday 18, a “super-index” that summarizes ten indicators (including requests for subsidies, manufacturing orders, building permits and even the performance of Wall Street) and has historically been considered a forerunner of the cycle.