Head of Macro Analysis
Summary: In today’s edition we focus on the latest OECD private sector confidence, which is still in negative territory in May. However, we observe a divergent trend between the manufacturing sector and the consumer sector that is likely to increase in coming months.
Looking at the latest Asian export data, that serve as proxy of global trade, we doubt that there will be any growth rebound in the second half of 2019.
By contrast, an improvement in consumer confidence in OECD countries is explained by higher wages, notably in the euro area and Germany (respectively +2.5% and +3.1% YoY in Q1 2019), low inflation and fiscal incentives. It should keep going upwards in coming months as we expect further fiscal stimulus by the end of the year in Europe (infrastructure and demand oriented) and probably more open discussion about reforming the EU fiscal framework and the ceiling of 3% for budget deficit once the new EU Parliament and EU Commission are in place.