In April, the US trade deficit widened from a revised $28.5B to $29.2B, broadly in line with the consensus estimate of -$29.0B. The details show a 2.3% M/M decline in exports, while imports dropped by a softer 1.4% M/M. Excluding petroleum, the trade deficit rose from $13.99B to $14.18B. The outcome raises expectations that net exports will continue to put a drag on US GDP in the second quarter of this year.


EMU: National IP data show mixed picture in April

In April, French industrial production surprised on the downside of expectations falling by 1.4% M/M, while the consensus was looking for a decline by 0.2% M/M. Manufacturing dropped by 0.5% M/M, but especially mining & quarrying disappointed (-6.9% M/M). The March outcome was downwardly adjusted from -1.4% M/M to - 1.7% M/M. In Italy however, industrial production came out better than expected. On a monthly basis, industrial production rose by 1.1% M/M, whereas a more modest increase was expected and the previous figure was slightly upwardly revised. The improvement was driven by an increase in manufacturing and electricity & gas, while mining & quarrying deteriorated. Tomorrow, euro zone industrial production is forecasted to have dropped by 0.4% M/M in April.


Other: UK IP posts first increase since February 2008

The UK total trade balance showed a sharper than expected widening in the deficit. In April, the trade deficit expanded from a revised £2716 to £3014. The underlying picture showed a positive development as both total exports (2.4% M/M) and imports (2.0% M/M) rose significantly.

In the UK, industrial production rose by 0.3% M/M in April, while a slight decline was expected. The previous figure was upwardly revised from -0.6% M/M to -0.3% M/M. Looking at the breakdown, manufacturing rose by 0.2% M/M, mining & quarrying increased by 2.4% M/M and oil & gas rose by 2.5% M/M, while elec, gas & water supply dropped by 1.3% M/M. This outcome confirms the improvement in the manufacturing surveys and raises expectations that the UK manufacturing sector is climbing out of recession.