Friday May 29, 2015 - 18:57:03 GMT
Share This Story
. - .
ECONOMIC DATA ANALYSIS FRIDAY 29 MAY 2015
US DATA TO PROVIDE INDICATIONS OF THE SCALE OF THE Q2 REBOUND
- Greek negotiations continue as deadlines for IMF repayments approach
- US payrolls report to show labour market is continuing to tighten
- Euro area CPI to provide further evidence that deflation risks are abating
Greece negotiations at a crucial point. Greece faces another deadline in the coming week as a €300mn debt repayment to the IMF is due on June 5th. While Greek government sources had expressed hopes that some agreement would be reached with its creditors by this weekend, that now looks unlikely. An agreement before June 5th remains a stronger possibility, although a number of differences are said to still exist. Even if a deal is not done by then, Greece will probably still be able to make both that repayment and a further one of around €330mn due on June 12th. However, June’s third repayment of €560mn, due on June 16th, may prove to be a much bigger hurdle.
ECB to leave policy unchanged. The ECB’s latest policy meeting (Wed) is unlikely to signal any change in policy direction. After the last meeting, ECB President Draghi noted that, despite encouraging signs in recent economic data, it was far too early to be talking about a tapering of the QE programme. He will probably make very similar comments after the latest meeting and reiterate that the programme will continue until the end of September next year. The ECB will also release its latest staff projections. Although inflation for this year may be revised higher from the 0.0% forecast in March, the projections for 2016 and 2017 (previously 1.5% & 1.8%) will be more closely watched and will probably be broadly unchanged. Prior to the meeting the ‘flash’ estimate of May CPI inflation (Tues) is expected to show a rise in both headline and core inflation. If realised, this would help to further ease concerns about deflation.
US labour market continuing to tighten. The coming week is an important one for assessing the extent to which US economic growth is picking up in Q2 following its weak start to the year.The Fed’s identification of further labour market improvement as one of the key preconditions for a hike in interest rates means that Friday’s payrolls report will be particularly eagerly awaited. Other indicators suggest that the labour market has continued to tighten in recent weeks, with initial jobless claims falling to a new recovery low during May. We expect a 230k rise in employment, which would be the largest since February, while the unemployment rate is forecast to be stable at 5.4%, and earnings growth is expected to pick up modestly to 2.3%.
And signs of a rebound in activity expected. Prior to payrolls, other indicators will provide updates on the strength of activity in April and May. The manufacturing (Mon) and non-manufacturing (Wed) ISMs have so far this year looked stronger than ‘official’ data, although it is possible that subsequent revisions may change that. We expect the non-manufacturing ISM to fall modestly following last month’s very strong rise but to still stay at a level historically consistent with above-trend GDP growth. April data for consumer spending, construction (both Mon) and trade (Tues) will give indications as to the extent to which GDP growth will rebound in Q2. We expect GDP to rise in excess of 3% annualised, which will leave a September rate hike by the Fed on the cards.
UK monetary policy still on hold. The June MPC meeting (Thurs) is not expected to lead to a change in policy. For the next two months the MPC will experiment with a new policy setting schedule but outside observers will not see any difference until August when the policy decision, minutes and Inflation Report will all be released at the same time. For now, the minutes will still not be released for another two weeks. PMI data will give some initial indications of economic activity in May. We expect them to continue to point to an acceleration in GDP growth in Q2. Finally, the recent slide in the Aussie dollar points to the likelihood that the Australian central bank stands pat at Tuesday’s policy meeting.
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, London EC2V 7HN. Registered in England and Wales no. 2065. Lloyds TSB Scotland plc. Registered Office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. 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."