Trial now

$8B Debt Issuance to Price, $3B Egypt 3Pt Leads


Sharp Retracement


NY Fed Weekly Economic Index (WEI)


JP Morgan Take on FOMC DOTs

MNI (London)
Repeats Story Initially Transmitted at 12:37 GMT Sep 5/08:37 EST Sep 5
By Jamie Satchithanantham
     LONDON (MNI) - UK industrial production fared pretty badly over the first
half of 2017, particularly for the the manufacturing sub-component which failed
to register a single, positive month-on-month outturn.
     As we enter the second half of the year there are grounds for more
optimism. IOP ended H1 on a strong footing in June, output was up 0.5% m/m
(largely driven by a 4.1% m/m rise in mining and quarrying output), and
expectations are for this momentum to carry forward into July.
     Surveys carried out by the CBI and IHS Markit point towards a better
showing in the manufacturing sector, with UK exports poised to continue the
upbeat form observed following sterling's 15% drop after the EU referendum last
     While these bullish surveys form the basis for the more upbeat stance on
IOP going into H2, one should take caution given the deterioration between them
and the official data over the first six months of the year.
     Analysts see IOP output up 0.3% m/m in July, for a 0.4% rise y/y.
Manufacturing output is seen rising 0.4% m/m, with an annual growth rate of
     As for the specific factors that could influence the July data, a rebound
in energy supply is expected to materialise, with a cooler July following a
hotter than average June. 
                           Jul         Jul            Jul            Jul
                    Industrial  Industrial  Manufacturing  Manufacturing
                    Production  Production         Output         Output
                         % m/m       % oya          % m/m          % oya
Date Out                08-Sep      08-Sep         08-Sep         08-Sep
Median                     0.3         0.4            0.4            1.8
Forecast High              0.7         0.9            0.7            3.0
Forecast Low                 0           0              0              1
Standard Deviation         0.2         0.2            0.2            0.6
Count                       15          10             11             11
Prior                      0.5         0.3            0.0            0.6
Barclays                   0.3         0.3            0.4            1.8
Berenberg                  0.5         N/A            N/A            N/A
Capital Economics          0.7         0.9            0.7            2.1
Credit Suisse              0.5         0.3            0.0            0.6
Commerzbank                0.0         N/A            N/A            N/A
HSBC                       0.2         0.3            0.3            0.9
ING                       -0.2         N/A            N/A            N/A
Investec                   0.3         0.5            0.7            2.1
JP Morgan                  0.3         0.4            0.5            1.8
Lloyds TSB                 0.2         0.3            0.4            1.8
Natixis                    0.4         0.6            0.1            1.5
Nomura                     0.2         0.4            0.3            1.7
Oxford Economics           0.2         0.4            0.2            1.6
Pantheon                   0.6         N/A            N/A            N/A
Scotia                     0.1         N/A            0.4            3.0
     Construction output declined for the third consecutive month in June and it
is expected to be four by the time the July construction data is released.
Analysts expect the 0.1% m/m contraction recorded in June to be followed up by a
0.2% m/m fall in July.
     While output grew 0.9% y/y in June this is also expected to come in weaker
in July, with analysts pencilling in growth of around 0.3% y/y. 
     Much of the subdued expectations will have been due to the July IHS Markit
Construction PMI which saw business activity ease to an 11-month low, dropping
from 54.8 in June to 51.9. 
     Within this, commercial work, including construction of offices and
building, fell at the fastest pace for 12 months. New orders were also softer,
an indication of weaker demand amid the uncertain political and economical
                             Jul           Jul
                    Construction  Construction
                          Output        Output
                           % m/m         % oya
Date Out                  08-Sep        08-Sep
Median                      -0.2           0.3
Forecast High                0.5           1.0
Forecast Low                  -1             0
Standard Deviation           0.4           0.4
Count                          9             6
Prior                       -0.1           0.9
Barclays                     0.5           1.0
Capital Economics           -0.2           0.2
HSBC                        -0.5           0.0
JP Morgan                    0.5           N/A
Lloyds TSB                  -0.3           0.2
Oxford Economics             0.0           0.6
Pantheon                    -0.5           N/A
Scotia                      -0.4           N/A
Societe Generale            -0.2           0.3
     The trade deficit rose to stg4.6bn in June from stg2.5bn in May with the
increase attributed to a surge in services imports and a fall in motor vehicle
     Survey data continues to suggest the solid flow of exports out of the UK,
with key export markets - particularly the Eurozone - growing in strength in
recent months. 
     Imports, as of yet, have not receded meaning the overall deficit thus far
has remained largely in tact. However, following the notable decline in consumer
confidence over the summer squeezed consumer budgets and appetites may finally
start to show signs of a restrained flow of foreign goods entering the UK.
     Analysts expect to see the deficit narrow in July, though perhaps by not
enough to wipe out all of the widening recorded in June. The MNI median stands
at stg3.5bn.
     The trade in goods deficit it expected to narrow stg0.7bn to stg12.0bn.    
                              Jul      Jul
                            Total  Visible
                    Trade balance    Trade
                           stg bn   stg bn
Date Out                   08-Sep   08-Sep
Median                       -3.5    -12.0
Forecast High                -2.5    -10.8
Forecast Low                   -5      -12
Standard Deviation            0.6      0.5
Count                           9        7
Prior                        -4.6    -12.7
Barclays                     -3.6      N/A
Capital Economics            -3.5    -12.0
Credit Suisse                -4.6      N/A
HSBC                         -2.8    -11.0
ING                           N/A    -12.0
Investec                     -3.5    -11.9
Lloyds TSB                   -3.0    -12.0
Nomura                        N/A    -12.1
Oxford Economics             -2.5    -10.8
Pantheon                     -3.0      N/A
Societe Generale             -3.5      N/A
     The Office of National Statistics Short-Term Indicators release will be
published Sep 8 at 0830GMT. 
--MNI London Bureau; +44 203-586-2226; email:
MNI London Bureau | +44 203-865-3812 |