Summary for the 14th of March 2019


The industrial production of durable consumer goods in the Eurozone rose by 1.1% in January from December. Including production of energy, the industrial production rose by 1.4%. The market was expecting a 1% increase. Output increased for all categories. Largest increase was in the non-durable goods category( 2% from -2%). Non-durable goods sector is ¼ of the industrial production ex. energy. Capital goods category also had a remarkable increase, even though the automobiles production declined by 5%, this should be seen in context of the Audi strike in Hungary. This can also explain why Germany was the only country of the larger countries in the Eurozone that had a decline in industrial production. France, Italy and Spain all had an increase in industrial production.

The economic growth in the Eurozone seems to be on the rise. If the growth in industrial production continues, it would have a neutral contribution to the GDP growth, instead of a negative contribution as it had been doing for the last half of 2018. Retails sales in the Eurozone had also been rising. The low energy prices had a positive effect on the real wage growth which in turns affected the consumer spending.

China also released economic indicators today. Industrial production in China rose by 5.3% year on year in January-February 2019, the slowest pace since 2002. The slow growth was due to a decline in exports. Exports contribute about half of the industrial production in China. The decline in exports was expected, US companies had expedited their imports from China earlier than what originally planned due to the fear of import tariffs. Now those companies are importing normally again. Retail sales in China rose in January and February, even though the sales in automobiles had been declining. The decline in automobiles was due to changes in taxes and emissions regulations. Online retail sales rose almost 20% from the previous year.

Fixed asset investments in China increased by 6.1% . Growth in industrial investment declined, from 10% in December to 6% in January and February. This was due to the trade conflict with the US, which had made foreign companies  in China to consider moving to other countries. Also rising labor cost, stricter environmental regulations and higher price of land have made companies consider moving their businesses. Public investments disappointed, but property investment had increased.  

Indices for 14th of March. Economic indicators from China came in under what the market had expected:

Dow: +0.6% (13th of March)
S&P 500: +0.7% (13th of March)
Nasdaq: +0.7%(13th of March)
Nikkei: Unchanged/a little on negative  (14th of March)
Chinese indices: Between +0.1% to -2.6%(14th of March)
STOXX Europe 600 Index: +0.78% (14th of March)

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