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US: Richmond Fed survey unexpectedly weaker in July

Wed, Jul 23 2008, 10:03 GMT
by KBC Market Research Desk

KBC Bank


The Richmond Fed manufacturing headline index declined further from -12 in June to -16 in July, reaching its lowest level in more than 5 years, while a slight improvement was expected. Shipments, new orders and average workweek worsened significantly while the number of employees index improved (-5 from -12), after falling sharply in June, but the workweek index dropped to -6 from 0 and order backlogs stayed at a depressed -22. Both prices paid and received were slightly lower, but remain at very high levels. Very disturbing are the negative figures for the futures new orders and future shipments index. These results are even weaker than the NY and Philly Fed surveys and suggest that the ISM survey, to be released next week, will be weak too and probably will revert to below the 50 boom/bust level.

The OFHEO house price index fell 0.3% M/M in May, following a 0.8% M/M drop in April. House prices are down 4.8% Y/Y, following a 4.6% Y/Y decline in April. It is the biggest decline since the series began in 1991.


EMU: Italian consumer confidence drops to lowest level since 1993

In Italy, the consumer confidence indicator came out at 95.8 in July, clearly below the expectations of 99.0 and 99.9 in June, which is the lowest level since 1993. The current climate index stayed broadly unchanged, while the future climate index deteriorated further (from 97.6 to 88.4). The report confirms the dire situation in the Italian economy that is flirting with recession.

Published on  Wed, Jul 23 2008, 10:21 GMT

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This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.

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