Market Economics | Interest Rate Strategy - BNP PARIBAS ...
Market Economics | Interest Rate Strategy - BNP PARIBAS ...
Market Economics | Interest Rate Strategy - BNP PARIBAS ...
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Key Data Preview<br />
Chart 5: French Sales of Manuf. Goods (3m avg)<br />
16<br />
12<br />
8<br />
4<br />
0<br />
-4<br />
-8<br />
Total (% 3m/3m annualised)<br />
Sales excl. autos (% 3m/3m annualised)<br />
-12<br />
Jan May Sep Jan May Sep Jan May Sep Jan May Sep<br />
07 08 09 10<br />
Source: Reuters EcoWin Pro<br />
Volume index Dec (f) Nov Oct Dec 09<br />
SA-WDA<br />
% m/m -0.5 2.8 -0.6 1.4<br />
% y/y -0.3 1.5 -0.3 5.4<br />
Key Point:<br />
The surge in sales seen in November should be<br />
partly corrected in December, despite very strong<br />
car sales.<br />
<strong>BNP</strong> Paribas Forecast: Correction<br />
France: Hh Consumption of Manuf. Goods (December)<br />
Release Date: Tuesday 25 January<br />
Retail sales of manufactured goods were extremely strong<br />
in November, rising 2.8% m/m. This was due to a<br />
combination of favourable factors. Christmas shopping<br />
started early, cold weather favoured sales of winter clothes<br />
and shoes (+2.9% m/m) and, most importantly, car sales<br />
soared 14.9% m/m. Since that gain was triggered by the<br />
prospect of the end of the car sales incentive (EUR 500 per<br />
car), car sales will increase further in December. However<br />
sales will remain below end-2009 levels as the incentive<br />
was twice that amount at the time.<br />
The decline in sales of other items should outweigh the<br />
positive impact of car sales in December. Sales of<br />
electronic items seem to have lost momentum in the last<br />
few months. The cold weather may have maintained<br />
demand for clothes and shoes, but the level of sales has<br />
probably eased. In any case, snowy and icy weather surely<br />
curbed sales in the week leading up to Christmas, with little<br />
prospect of catch-up thereafter. This slower pace of sales<br />
in the second half of December likely continued into early<br />
January, in particular because of the late official starting<br />
date for the seasonal sales.<br />
The correction of the November surge is thus likely to be<br />
split over the following two months.<br />
Chart 6: US Consumer Confidence<br />
Source: Reuters EcoWin Pro<br />
Jan (f) Jan 2H Jan p Dec<br />
Conference Board 54.0 - - 52.5<br />
Michigan Sentiment 73.5 74.3 72.7 74.5<br />
<strong>BNP</strong> Paribas Forecast: Up<br />
US: Consumer Confidence (January)<br />
Release Date: Tuesday 25 January<br />
The Conference Board Index of Consumer Confidence<br />
dropped to 52.5 from 54.3 in December. In January, we<br />
expect a partial rebound in the index to 54.0. While<br />
consumer confidence measures have struggled to find a<br />
consistent upward path lately, it should continue trending<br />
upward as the economy continues to expand and the<br />
labour market gradually improves. Indeed, according to the<br />
latest Beige Book, “Labor markets in most Districts appear<br />
to be firming somewhat”. In addition, earlier this month, the<br />
latest weekly index of consumer sentiment by Langer<br />
Research Associates (formerly known as the ABC News<br />
Consumer Confidence Index), increased to the highest<br />
level since 2008. However, certain factors such as surging<br />
gasoline prices and high unemployment rates should<br />
continue to limit confidence from accelerating above the<br />
recent trend.<br />
Key Point:<br />
In January, we expect a partial rebound in the<br />
Conference Board index to 54.0 after the previous<br />
month’s decline.<br />
<strong>Market</strong> <strong>Economics</strong> 20 January 2011<br />
<strong>Market</strong> Mover<br />
73<br />
www.Global<strong>Market</strong>s.bnpparibas.com