Eurozone Growth Likely To Accelerate In Q2 On Wider Trade Surplus – 17 July 2017, 18:13
The rise in the euro-zone’s trade surplus in May indicates that GDP growth likely accelerated in the three months to June and trade is set to continue boosting growth in the coming quarters, Jennifer McKeown, an economist at Capital Economics, said. Official data released on July 14 showed that the seasonally adjusted trade surplus grew to EUR 19.7 billion in May from EUR 18.6 billion in April. The increase in May was mainly driven by a 2.1 percent monthly rise in exports, which outpaced the 1.6 percent increase in imports and left the annual growth of export values at a healthy 9.4 percent, the economist observed. Among countries, the German trade surplus climbed to EUR 20.3 billion in May from EUR 19.8 billion in April, while the French deficit narrowed from EUR 5.6 billion to EUR 4.9 billion – its smallest this year. McKeown noted that the Eurozone trade surplus in June was still smaller than it was this time last year, partly reflecting the rise in oil prices. “Monthly trade volumes data, which are less timely than values data, have shown annual export growth outpacing that of imports this year, in stark contrast to the situation in 2016,” the economist pointed out. Though the monthly goods trade values data are not a great guide to the goods and services trade volumes data used to construct GDP, the latest monthly industrial production and retail sales data suggests that GDP growth may have exceeded Q1’s 0.6 percent rise in the second quarter, the economist said. McKeown expects export growth to rise further in the coming months, with global demand in good health and the euro exchange rate still at a fairly low level by past standards. “Net trade should therefore boost euro-zone GDP growth over the next year or so, although that support is likely to fade by 2019 as the euro appreciates and growth slows elsewhere,” McKeown predicted.
New York Manufacturing Index Falls More Than Expected 17 July 2017, 18:42 – Activity in the New York manufacturing sector grew at a notably slower pace in the month of July, according to a report released by the Federal Reserve Bank of New York on Monday. The New York Fed said its general business conditions index dropped to 9.8 in July from ‘19.8 in June, although a positive reading still indicates growth. Economists had expected the index to fall to 15.0
Crude Oil Holds $46 After Rig Count 17 July 2017, 18:16 – Crude oil futures continued to inch higher Monday morning amid signs of strong demand from China. China’s economy expanded at a steady pace in the second quarter on domestic spending and exports despite measures taken to rein in financial risks. Gross domestic product grew 6.9 percent year-on-year, the same pace of expansion as seen in the first quarter, the National Bureau of Statistics said Monday. The annual growth was forecast to slow to 6.8 percent. Crude oil extended recent gains despite Friday’s report from Baker Hughes data showing the number of active U.S. rigs drilling for oil edged higher by two to 765 rigs this week. WTI light sweet oil was up 8 cents at $46.55 a barrel, staying well away from June’s yearly lows near $42. Among the few economic reports on tap, the New York Federal Reserve’s Empire State Manufacturing Survey for July will be released at 8:30 a.m. Eastern Time today.