US: All eyes on consumer sentiment and advanced goods trade balance – Nomura

Research Team at Nomura, notes that the US goods exports and imports increased by 0.5% m-o-m and 2.4% m-o-m in June.

Key Quotes

“An increase in exports of food and beverages and consumer goods offset a slowdown in exports of industrial supplies and automotives. Import growth was broad based with a pickup in demand for industrial and consumer goods. For July, shipping container data and export/import price data suggest nominal exports increased while nominal imports likely declined slight. On balance, we forecast that the July nominal goods trade balance narrowed to -$63.2bn in July from -$64.5bn in June.

University of Michigan consumer sentiment (Friday): In the preliminary estimate for August, this index edged up to 90.4 from 90.0, as the increase in the consumer expectations index offset the drop in the current economic conditions index. According to the report, “confidence inched upward in early August due to more favorable prospects for the overall economy offsetting a small pullback in personal finances.”

Consumer sentiment has been steady around the 90 to 95 range for some time now, which is a relatively positive reading for this index. The US election could be a major source of uncertainty for the next few months and could dampen sentiment. Consensus expects the index to be little changed in the final reading at 90.5. On inflation expectations, the 5- to 10-year ahead measure has steadied at 2.6% for the last three months. This is a good sign that long-run inflation expectations remain well anchored.”