Friday May 22, 2015 - 16:23:32 GMT
Share This Story
. - .
ECONOMIC DATA ANALYSIS FRIDAY 22 MAY 2015
US AND UK Q1 GDP WEAKNESS IN FOCUS
- Queen’s speech to confirm PM Cameron’s intention of holding an EU referendum
- Greek uncertainty to linger pending key events after the coming week
- Weakness in UK and US Q1 GDP to be reassessed
European event risk remains at large. Uncertainty around the release of Greek bailout funds remains elevated despite ongoing discussions between Merkel, Hollande and Tsipras at this week’s EU Summit in Riga. However, with the emphasis still on delivering a complete set of measures to resolve the impasse in negotiations, discussions are set to continue over the coming week, with the possibility of an extraordinary Eurogroup meeting at some point. With Greece’s finances still in a precarious state, comments from Greek officials have suggested that failure to reach an agreement would mean that the 5th June payment to the IMF is unlikely to be met. That would raise the risk of Greek becoming the first country to default on an IMF payment.
Queen’s speech to reiterate Cameron’s commitment to EU referendum. While comments from French President Hollande noted that the EU Summit in Riga was not the appropriate place or time to discuss the UK’s membership, the anticipation of an EU referendum remains a key source of uncertainty to the UK outlook. While the surprisingly definitive outcome to the election has removed a large element of political uncertainty, the absence of a coalition partner as an offset to the Conservative’s ambition, presents the UK with a key challenge in the shape of its ties with the EU. The Queen’s speech on Wednesday is expected to confirm PM Cameron’s intention of holding a referendum by end-2017, although any firming in the timing of this is likely to remain elusive at this stage.
UK GDP to be nudged modestly higher while surveys to point towards a firmer outlook. The flow of economic data over the coming week is unlikely to materially alter the current perceptions of the UK economy. The preliminary estimate of Q1 GDP underwhelmed expectations printing at 0.3% q/q. We expect the second estimate (Thurs.) to be revised up to 0.4%, although this would still be below the level of activity implied by the much firmer tone of Q1 business surveys. The expenditure breakdown will be examined to see if household spending continues to provide the lion’s share of propulsion as suggested by the recent strength of retail sales. To the extent that the weakness in Q1 GDP growth could reflect a reduction in inventories, officially measured growth should better reflect the trend implied by surveys in Q2. On Friday, the Lloyds Business Confidence Barometer and GfK Consumer Confidence for April, will provide additional insight into prospects for Q2.
US Q1 GDP to be revised lower. As in the UK, scepticism over the reported weakness in Q1 activity has been widespread in the US following the weaker-than-expected preliminary GDP print last month. The extent to which this slowdown reflected statistical quirks related to seasonal adjustments rather than a genuine slowdown in underlying activity remains a key point of debate. While this uncertainty has received a lot of attention, the flow of data since the first estimate, in particular a large March trade deficit, points to the likelihood of a further downgrade. The second estimate of growth on Friday is expected to be revised down into negative territory. Over the rest of week, data releases including durable goods orders for April and consumer confidence for May, both on Tuesday, should help shed further light on the prospects for a Q2 rebound. Given the dollar’s sharp appreciation in recent months, domestic demand is likely to mostly shoulder the burden of growth, implying particular interest in the fundamentals driving consumer activity. New home sales data (Tues.) will provide a further update on the strength of the rebound in that sector.
This document, its contents and any related communication (altogether, the 'Communication') does not constitute or form part of any offer to sell or an invitation to subscribe for, hold or purchase any securities or any other investment. This Communication shall not form the basis of or be relied on in connection with any contract or commitment whatsoever. This Communication is not intended to form, and should not form, the basis of any investment decision. This Communication is not and should not be treated as investment research, a research recommendation, an opinion or advice. Recipients should conduct their own independent enquiries and obtain their own professional legal, regulatory, tax or accounting advice as appropriate. Any transaction which a recipient of this Communication may subsequently enter into may only be on the basis of such enquiries and advice, and that recipient’s own knowledge and experience. This Communication has been prepared by, and is subject to the copyright of, Lloyds. This Communication may not, in whole or in part, be reproduced, transmitted, stored in a retrieval system or translated in any other language in any form, by any means without the prior written consent of Lloyds. This Communication is provided for information purposes only, and is confidential and may not be referred to, disclosed, reproduced or redistributed, in whole or in part, to any other person. This Communication is based on current public information.
Whilst Lloyds TSB ank plc (“Lloyds TSB”) and Bank of Scotland plc ("Bank of Scotland") have exercised reasonable care in preparing this material and any views or information expressed or presented are based on sources it believes to be accurate and reliable, no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of the facts and data contained herein.
This material has been prepared for information purposes only and Lloyds TSB, Bank of Scotland, their directors, officers and employees are not responsible for any consequences arising from any reliance upon such information. Under no circumstances should this material be treated as an offer or solicitation to offer, to buy or sell any product or enter into any transaction. If you receive information from us which is inconsistent with other information which you have received from us, you should refer this to your Lloyds TSB or Bank of Scotland Relationship Manager for clarification.
Lloyds Bank Corporate Markets, Lloyds TSB Corporate Markets and Lloyds TSB are trading names of Lloyds TSB Bank plc, Lloyds TSB Scotland plc and Bank of Scotland plc. Lloyds TSB Bank plc. Registered Office:25 Gresham Street,LondonEC2V 7HN. Registered inEnglandandWalesno. 2065. Lloyds TSB Scotland plc. Registered Office: Henry Duncan House,120 George Street,EdinburghEH2 4LH. Registered inScotlandno. 95237. Bank of Scotland plc. Registered Office: The Mound,EdinburghEH1 1YZ. Registered inScotlandno. SC32700. Authorised and regulated by the Financial Services Authority under registration numbers 119278, 191240 and 169628 respectively.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."