US: Focus on Q1 GDP, consumer confidence and Chicago PMI data - BBH

Analysts at BBH points out that Q1 GDP, consumer confidence and Chicago PMI data will be the key economic releases from today’s US session.

Key Quotes

“The US reports Q1 GDP.  The median forecast in the Bloomberg survey is for a 1.0% annualized gain.  We suspect the risk is on the downside.  Beginning in 2010, Q1 growth in the US has averaged 1.1%, but our back of the envelope calculation warns that Q1 17 was likely weaker than average.  Outside of the headline shock, it has no implications for monetary policy.  The Federal Reserve hiked rates in March, rendering Q1 data moot.  The FOMC meets next week, and the statement is likely to look past the setback in Q1.  The US jobs report at the end of next week may be of greater importance than the FOMC meeting.”  

“The US also sees the Chicago PMI for April and the final University of Michigan consumer confidence and inflation expectations survey.  It is important that the US Congress approves a spending authorization bill or some stop gap measure.  Otherwise, government closure cannot be ruled out.  Separately, although press reports suggest progress on health care, a resolution still seems elusive.  To appease the wing of the Republican Party (Freedom Caucus) that blocked the previous attempt appears to be alienating the moderate wing (e.g. Tuesday Group).”

“Canada reports February GDP (expected to have risen by 0.1%).  The weekend sees the EU summit on Brexit.  Reports suggest the EU may press for considering a united Ireland within the EU. Merkel's speech earlier this week underscores the EU's interest in first agreeing to the terms of exit before a new, even if temporary, arrangement, can be made.    Also, ASEAN countries hold a summit as well.”