Weekly Report – Jan 17, 2020

US core consumer prices, excluding volatile items such as food and energy, increased 2.3% from a year earlier in December 2019, the same as in November 2019 and matching market forecasts. The US consumer price inflation rate climbed to 2.3% year-on-year in December 2019 from 2.1% in the November 2019 and in line with market consensus. That was the highest rate since October 2018, boosted by a sharp rebound in energy costs (3.4% vs -0.6% in November 2019). Food inflation, however, eased to 1.8 % from 2.0% . Additional price increases were recorded for medical care commodities, medical care services and shelter. The core inflation rate, which excludes volatile items such as food and energy, was unchanged at 2.3%, also in line with market forecasts. Retail sales in the United States increased 0.3% month-over-month in December of 2019, following an upwardly revised 0.3% gain in November 2019 and matching market expectations.

The consumer price inflation in the UK slowed to 1.3% year-on-year in December 2019, the lowest reading since November 2016 and below market expectation of 1.5% , as prices rose at a softer pace for restaurants & hotels (1.6% vs 2.4%), transport (0.7% vs 0.9%), and food & non-alcoholic beverages (1.7% vs 2.1%). The annual core inflation rate, which excludes energy, food, alcoholic beverages and tobacco, fell to 1.4%.

The UK posted a trade surplus of GBP$4.03 billion in November 2019, the biggest since monthly records began, compared to a revised GBP$1.34 billion deficit in October 2019. Exports rose 1.1% to an all-time high, boosted by sales of unspecified goods including non-monetary gold and fuels. Meanwhile, imports plunged 7.8% to a near two-year low due to purchases of food & live animals, fuels, chemicals, material manufactures, machinery & transport equipment, and miscellaneous manufactures.

Germany’s economy grew by just 0.6% in 2019, the weakest annual expansion since 2013 and well below 1.5% in 2018, a preliminary estimate showed.