Macro Snapshot— Service Sector Activity in Japan Shows Growth; Chinese exports in April increase by 3.9%

RIYADH: Japan’s service sector activity rose for the first time in four months in April as consumer confidence recovered after the government lifted coronavirus curbs following a drop in infections servants at omicron.

The Jibun Bank Japan Services Purchasing Managers’ Index final rose to 50.7 seasonally adjusted from the previous month’s final of 49.4. It was also better than a flash reading of 50.5 for April.

The figure marked the first expansion since December.

“The easing of COVID-19 restrictions allowed customer-facing businesses to operate more freely in April,” said Usamah Bhatti, economist at S&P Global, which compiles the survey.

Chinese exports increase

China’s exports rose 3.9% in April from a year ago, beating analysts’ expectations, while imports were unchanged, customs data showed on Monday.

Analysts in a Reuters poll had expected exports to rise 3.2% after a 14.7% gain in March.

Imports are expected to have fallen 3% after falling 0.1% the previous month.

China posted a trade surplus of $51.12 billion in April, against a forecast of a surplus of $50.65 billion in the survey. The country declared a surplus of $47.38 billion in March.

Indonesia’s economic growth in the first quarter

Indonesia’s economy grew for the fourth consecutive quarter between January and March as COVID-19 restrictions continued to be eased, data from the statistics office showed on Monday.

Gross domestic product in Southeast Asia’s largest economy rose 5.01% in the first quarter compared to the same period last year, compared with 5.02% in the October-December period in 2021. A Reuters poll of analysts estimated the economy would grow by 5%.

On an unadjusted quarterly basis, the economy contracted 0.96%, compared to growth of 1.06% in October-December and forecasts of a decline of 0.89%.

Egypt’s spending will increase by 15%

Egypt expects its spending to rise by 15% and its budget deficit by 14.5% in the fiscal year that begins July 1, as it deals with the fallout from the Ukraine crisis and the continuing suffering from the coronavirus pandemic, the finance minister told parliament on Monday.

Spending for the 2022/23 financial year will rise to 2.070 billion Egyptian pounds ($112 billion) from 1.790 billion pounds this year, he said as he presented his draft budget to lawmakers.

Revenue will rise to £1.52 trillion from £1.3 trillion in 2021/22. This will result in a deficit of 558.2 billion pounds, compared to 487.7 billion previously.

The budget deficit is forecast at 6.1% of gross domestic product in 2022/23, compared to an estimated 6.2% for the current financial year.

The government expects economic growth to slow slightly to 5.5% from 5.7% this year and inflation to remain stable at 9%.

US earnings forecast weakens

With first-quarter U.S. earnings in the home stretch, business growth expectations for the current quarter and 2022 are mostly down as the costs of oil and other supplies rise and interest rates rise. interest increases.

Ultra-high oil boosted earnings forecasts for energy companies while stoking concerns about profit margins for many other S&P 500 industries.

A disappointing outlook for, Netflix and other major players stood out among recent reports, even as estimated first-quarter year-over-year earnings growth rose to 10.4. % vs. 6.4% in early April, according to BIES data. from Refinitiv.

On Friday, analysts had lowered their overall forecast for S&P 500 earnings growth in the second quarter to 5.6% from 6.8% in early April, while the full-year forecast remained at 8.8%, on the Refinitiv database.

The growth estimate for 2022, however, drops to around 5% without growth in the energy sector – a huge impact for a sector that accounts for just 4% of the S&P 500 market cap.

“There will be more downside given the oil shock we’ve seen,” said Ohsung Kwon, US equity strategist at BofA Securities in New York.

“It’s going to take time for that to materialize,” he said. “It’s not just energy; it’s headline inflation plus the higher rate environment.

With contributions from Reuters