FXTRADING Economic Data Summary (Asia-Pacific | 06/16)

Swiss Consumer Confidence Remains Weak

Switzerlands consumer confidence index fell from -36.5 a year earlier to -38.1 in May, slightly below market expectations of -38.0, indicating that households remain cautious about the economic outlook. Although the decline was modest, overall confidence remains at a low level, with little sign of a meaningful recovery in consumer sentiment.

Looking at the subcomponents, expectations for the economy declined from -42.9 to -45.9, while expectations for personal finances fell from -30.3 to -33.8, suggesting growing concerns among households about future income prospects and economic conditions. Meanwhile, the index measuring past financial conditions improved slightly from -44.8 to -44.2, but willingness to make major purchases weakened from -28.0 to -28.7, highlighting continued caution among consumers. FXTRADING Analysis: The continued deterioration in future expectations suggests that Swiss household confidence has yet to recover. Consumer demand is therefore unlikely to strengthen significantly in the near term, limiting the contribution of domestic demand to economic growth.

New Zealand Services Sector Continues to Weaken

New Zealands BNZ-BusinessNZ Performance of Services Index fell from 48.7 to 47.5 in May, remaining below the 50-point threshold for a second consecutive month and indicating ongoing contraction in the services sector. Despite expectations for a gradual economic recovery, weak demand remains a key challenge.

The details showed that the Activity/Sales Index dropped from 48.5 to 44.7, while the New Orders Index fell from 50.9 to 47.6. The Employment Index edged up slightly from 48.5 to 48.6 but remained in contraction territory. Survey respondents indicated that restaurants, cafés, and leisure-related services recorded the weakest performance, with businesses widely citing higher fuel costs and cautious consumer spending as ongoing pressures on operations. FXTRADING Analysis: Continued weakness in the services sector, a key component of New Zealands economy, suggests that household consumption and business demand are recovering only slowly, posing challenges to short-term economic growth.

Eurozone Industrial Production Maintains Modest Growth

Eurozone industrial production increased by 0.1% month-on-month in April, below market expectations of a 0.2% rise, indicating that while manufacturing remains in expansion territory, overall momentum is still limited. Industrial activity continues to recover only gradually.

By category, output of non-durable consumer goods rose 1.7%, durable consumer goods increased 1.0%, and intermediate goods production grew 0.8%. However, capital goods output fell 0.5% and energy production declined 0.4%, weighing on the overall result. Industrial production across the European Union also rose by 0.1%, with Malta, Sweden, and the Netherlands recording the strongest gains, while Bulgaria, Greece, and Poland experienced notable declines. FXTRADING Analysis: Consumer-related industries continue to provide some support, but weak business investment is limiting the pace of industrial recovery. The Eurozone manufacturing sector still has some distance to go before achieving a broad-based improvement.

US Producer-Side Inflation Pressures Intensify

US producer prices rose 1.1% month-on-month in May, exceeding market expectations of 0.7%, while the annual growth rate accelerated from 5.9% to 6.5%, reaching its highest level since November 2022. The data suggest that cost pressures at the producer level continue to build and inflation risks have not fully subsided.

Energy prices remained the primary driver, with final demand goods prices increasing 2.8% and energy prices surging 10.7%, including a sharp 23.4% jump in gasoline prices. At the same time, core PPI excluding food, energy, and trade services rose 0.8% month-on-month, the largest increase since March 2022, while the annual rate climbed to 5.1%, indicating that price pressures are spreading more broadly across the economy. FXTRADING Analysis: The simultaneous rise in headline and core PPI suggests that producer-side inflation pressures in the US are continuing to accumulate. If businesses keep passing higher costs on to consumers, there is a risk that consumer inflation could accelerate again in the months ahead.

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