Commodity on tap
17 August 2021
Amid a series of extreme weather events, the value of water is starting to be reassessed.
4 min read
17 Aug 2021
UK GDP growth in the 2Q was in-line with the consensus at 4.8%, with both private consumption and government spending remaining strong. Interestingly, business investment was below consensus at 2.4% for the quarter, suggesting business confidence is potentially lagging. GDP for June remained strong at 1%. However, uncertainty remains on the outlook for economic activity for the rest of the year.
The key US data print for the week was CPI, which came in at 0.5% month-on-month, with the year-on-year figure remaining strong at 5.4%. The less volatile core CPI (excluding energy and food) figure came in at consensus with a print of 4.3%, lower than the 4.5% in the previous month – suggesting we may be hitting the near-term peak in core inflation pressures. There was some weakness in the University of Michigan economic survey data, with the Sentiment index coming in at 70.2 against a consensus figure of 81.2. We will need to watch the data to see if this is an early indicator of a deceleration in wider consumer spending activity.
July's German current account balance remained strong at €22.5bn against a consensus figure of €18.9bn, confirming that global manufacturing demand remains robust. The German ZEW economic sentiment index was weaker than expected, with the expectations sub-index at 40.4 against 55. Given that the survey is from the financial sector rather than consumers, the below-consensus print suggests market participants are probably becoming a bit more cautious on the macro backdrop – despite the strong equity market in Europe.
The July CPI print was a bit above consensus at 1% year-on-year, against a forecast figure of 0.8%. For those focused on the higher-level macro data, July's aggregate social financing figure came in at 1060bn versus a survey figure of 1700bn, indicating a tapering in financial support to the economy. Given the near-term pressure on the economy given the Delta variant wave, the figure is likely to increase in the coming months as monetary support increases.
Source: FactSet
Source: FactSet