In June, US durable goods orders dropped by 2.5% M/M, while the consensus was looking for a more modest decline (-0.6% M/M) and the previous figure was downwardly revised from 1.8% M/M to 1.3% M/M. Looking at the details, weakness was transportation driven with nondefense aircraft falling by 38.5% M/M and vehicles and parts declining by 1.0% M/M. Excluding transportation, durables rose by 1.1% M/M led by increases in primary metals (8.9% M/M) and machinery (4.4% M/M). Although the headline index dropped significantly, the improvement in orders ex transportation adds to the recent signs of recovery.
EMU: German inflation falls into negative territory
In July, German CPI inflation dropped into negative territory. On a yearly basis, German inflation fell by 0.6% Y/Y, while the consensus was looking for a decline by 0.4% Y/Y. On a monthly basis however, inflation stayed flat in July. Tomorrow, also Belgian and Spanish CPI are forecasted to fall further into negative territory, but CPI inflation is expected to head back above zero in the coming months due to reverse base effects as oil prices peaked last year in July.
Other: UK total consumer lending at record low
In the UK, total consumer lending slowed further in June, posting the lowest increase since the series started in 1993. Total consumer lending grew by £414 million and also the July figure was downwardly revised. The weaker than expected outcome was driven by an easing in consumer credit to £71M (from £153M). Mortgage approvals, on the contrary, rose to their highest level in almost a year (47 584). The BoE’s preferred measure of money supply, M4 excluding intermediate other financial corporations, dropped 0.6% M/M, while an increase was expected.
