20150312-穆迪服务-Strong_Dollar_Saps_Pricing_Power_23页_454kb

Moody's Weekly Market Outlook Summary

Core Content

Moody's Weekly Market Outlook provides insights into credit markets, economic indicators, and market trends for the US, Europe, and Asia-Pacific. The report highlights the impact of a strong US dollar on pricing power, employment data, and consumer spending, as well as developments in high yield borrowing activity and the potential for monetary policy changes.

Main Views

1. Strong Dollar Saps Pricing Power

• A strong US dollar can substitute for a fed funds rate hike, reducing the need for higher rates.
• The dollar has appreciated by 29% since 2011, the largest increase since the 2000 surge.
• This appreciation has put downward pressure on US exports and imports, weakening pricing power for US businesses and labor.
• The US export price index fell by -5.9% in February, the worst performance since the 2000 surge.
• The US core import price index is expected to continue its annualized decline.

2. Employment and Consumer Spending

• The US has added 2.8 million jobs since January 2008, but this is far below the average of previous recoveries.
• Consumers spend income, not jobs, and wage growth has slowed, affecting retail sales.
• February 2015 retail sales showed a modest 2.3% year-over-year increase, with some categories like restaurants and autodealerships performing better.
• The report notes that the current retail sales performance is weaker than historical averages, indicating a slow recovery.

3. High Yield Borrowing Activity

• High yield borrowing activity has shifted from bank loans to bonds due to stricter regulations.
• In January-February 2015, high yield bond issuance rose by 30.1% year-over-year, while bank loan programs fell by -37%.
• The total of new high yield bank loan programs and bond offerings dropped by -13% annually.
• In 2014, the combined issuance of high yield bonds and bank loans fell by -10.7%.
• A significant portion of Q1-2015 high yield bank loan programs is used for M&A, though the number of such loans has decreased.

4. Credit Markets Trends

• C&I loans are growing despite the contraction in high yield bank loan programs.
• The yearlong sum of new high yield bank loan programs fell by -23% in February 2015.
• The 2007 peak for high yield bank loan programs was at $680 billion, while C&I loans peaked at $1.586 trillion in 2008.

Key Information

Economic Reports and Forecasts

• March 13 (Friday):

  • Producer Price Index – February: Expected to rise by 0.3% overall and 0.1% core.
  • University of Michigan Consumer Sentiment – March Preliminary: Forecast at 95.5, indicating possible improvement in consumer confidence.

• March 16 (Monday):

  • Industrial Production & Capacity Utilization – February: Projected to grow by 0.3% and capacity utilization at 79.5%.
  • NAHB Housing Market Index – March: Forecast at 57, suggesting improved homebuilder confidence.
  • Euro Zone – Consumer Price Index – February: Expected to fall by -0.3% y/y, with low oil prices and a weak euro affecting inflation.

• March 17 (Tuesday):

  • Housing Starts & Building Permits – February: Forecast at 1.04 million starts and 1.07 million permits.
  • Germany – ZEW Indicator of Economic Sentiment – March: Expected to rise to 56, showing continued optimism.
  • Spain – Lending by Credit Institutions – January: Forecast at -4% y/y, with domestic lending declining.

• March 18 (Wednesday):

  • FOMC Policy Statement: Likely to maintain the fed funds target at 0-0.25%, with a possible June rate hike.
  • Italy – Foreign Trade – January: Expected to show a small surplus of €0.3 billion, driven by falling oil prices and strong exports to the euro zone.

• March 19 (Thursday):

  • Leading Economic Indicators Index – February: Forecast at 0.3%, suggesting moderate economic growth.
  • Russian Federation – Government Finance – January: Expected to show a surplus of RUB0.2 trillion, driven by strong revenue growth and reduced spending.
  • Russian Federation – Retail Sales – February: Forecast at -3.5% y/y, indicating continued contraction in consumer spending.

Summary of Key Metrics

Conclusion

The report emphasizes the impact of the strong dollar on US pricing power, the weak performance of employment and consumer spending, and the shift in high yield borrowing activity from bank loans to bonds. It also provides forecasts for upcoming economic reports and potential policy changes, highlighting the ongoing challenges in the US and European markets.