Economy

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China official PMI data for May showed manufacturing new orders contract for the first time in four months as overseas sales declined for the twelfth straight month. China saw relatively fast growth momentum in the service sector.

Fitch expect 2019 Australian GDP growth of 2.0%, lowest since 2008-2009 global financial crisis. Last October the rating agency affirmed Australia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'AAA' with a stable outlook as did S&P Global Ratings from 'negative'.

The trade war and falling energy prices unintended consequences continue. The Dallas Fed Manufacturing index for May slid negative to -5.3 from expected +5.8, the lowest since December. Worrisome is new orders crashed 75% to +2.4 from +9.8 prior.

Danish shipping giant A.P. Møller – Mærsk A/S released first quarter of 2019 with a 33% increase in EBITDA earnings to $1.2 billion but said still facing considerable uncertainties from weaker macro numbers and the risk from trade tensions and implementation of IMO 2020.

US existing home sales tumbled to 5.19M v 5.35M expected and the prior 5.21M, down -0.4% v +2.7% expected. Mortgage data has been volatile but stronger in 2019 so perhaps housing numbers pick up in the coming months if the geopolitical temperature cools. 

Australia saw stronger than expected part time jobs growth in April but full time jobs fell, with Unemployment at 5.2% and Trend unemployment remaining steady at 5.1%. Participation highest since Dec of 2010.

The US advance retail sales for April at -0.2% missed +0.2% estimate, prior month was revised up. These numbers matter with American consumers accounting for 70% of GDP. Last night China retail sales missed also.

China released three key economic reports late Tuesday, all missing. Retail sales 7.2% y/y missed expected 8.6%, Industrial production 5.4% y/y under 6.5% expected and Fixed asset investment 6.1% y/y missed expected 6.4%.

Canada with all the fallout from political scandals and falling Canadian energy prices, pipeline missteps and trade wars surprised by adding +106.5K jobs in April, the most in history and crushing the +11.6K expected

The US trade deficit in March was $50.0 billion up from the prior month's $49.3 billion. We saw a 10-year high deficit of $621 billion in 2018. Trade tariffs appear to be impacting China, the Chinese/US trade deficit fell again to $20.75 billion from -$24.76 & -$34.47 prior.

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