Eurozone CPI steady in July

Daily Analysis - 19/08/2016

Consumer prices rise 0.20% in July as expected, but below ECB’s target inflation rate

Consumer prices in the Eurozone increased 0.20% in July matching estimates, official data from Eurostat showed on Thursday. The core CPI which excludes volatile food and energy components increased 0.90%, matching estimates. Consumer prices maintained a steady pace, but still way off the ECB's 2.0% target inflation rate. Eurozone CPI has been at the lower bound since early 2013. On a monthly basis, headline inflation fell 0.60%, more than the expected 0.40% declines.

Australia jobless rate falls to a 3-year low

The unemployment rate in Australia fell to a 3-year low in July at 5.70%, data from the Australian Bureau of Statistics showed on Thursday, which beat estimates of 5.80%. However, despite the better than expected unemployment rate, most of the job gains came from the part-time sector which has now become a trend. During the month, the Australian economy added 26.2k jobs, which was higher than forecasts of 10k. Full time jobs decreased by 45k while part-time employment increased by 71.6k. The participation rate remained steady at 64.90%, unchanged from the previous month. The number of people seeking full time work fell by 13k.

Japan trade surplus increases in July

Merchandise trade in Japan posted a surplus of 513.51 billion yen in July, according to official data from the Ministry of Finance released on Thursday. That beat estimates of 273.2 billion yen. However, exports continued to fall at a steady pace, now into its tenth consecutive month. Exports were down 14.0% on the year in July, down from 7.40% declines in June. Analysts forecast exports to decline 13.80%. Imports fell to an annual rate of 24.70%, compared to forecasts of a 20.0% decline and down from 18.80% decline in June. Exports to Asia, China and the US posted sharp declines while exports to the EU remained fairly steady in comparison. Imports on the other hand posted a steady decline across all of Japan’s major trading partners.

Retail sales in the UK rebounds in July

UK retail sales posted a surprise, rebounding in July on increased consumer spending on food and non-food stores, which increased following a brief contraction in June. Official data showed that retail sales volume including automotive fuel climbed 1.40% on the month in July, which beat estimates of a 0.10% gain. Likewise, excluding auto fuel, core retail sales volume were seen advancing 1.50% after falling 0.90% a month before. The pace of increase in the retail sales was faster than expected as economists were expecting to see another disappointing print. On a yearly basis, overall retail sales grew at a pace of 5.90% in July compared to a year ago while excluding auto fuels, retail sales advanced 5.40%.

Canada retail sales and inflation expected to remain soft

The economic calendar for Canada is busy today with inflation and retail sales figures up for release at 1230GMT. Forecasts point to the headline consumer inflation to remain unchanged in July, following a 0.20% increase in June. Excluding food and energy prices, the Core CPI is expected to also stay for the second consecutive month, following a 0.30% increase in May. Retail sales figures are expected to show the headline retail sales rising 0.80% in July, accelerating from 0.20% increase in June. Core retail sales are however expected to remain subdued, rising only 0.40% in July following a 0.90% increase in June.