Share This Story
Markets await first view of official economic growth in 2006Economics Weekly: Markets await first view of official economic growth in 2006
Leading indicators suggest that global economic growth started on a strong footing in 2006 and this should be confirmed this week by national accounts releases from the US and the UK. After slowing to an annualised rate of just 1.7% in the final quarter of 2005, US real gdp growth is set to have rebounded by around 5% in Q1 2006. It should be underpinned by a recovery in personal consumption growth, which is expected to have been buoyed by strong employment gains and the rise in consumer confidence. The outlook for investment is also solid with companies continuing to report solid profit growth and government spending related to reconstruction following the devastation by hurricane Katrina last year. Friday's release will also provide the latest view of the gdp deflator and employment cost index - both possible key signals for Fed policy in the months ahead. Other key US data that will attract significant interest this week are the releases of existing and new homes sales for March, due out Tuesday and Wednesday, respectively and April Chicago PMI on Friday. Fed Chairman Bernanke's testimony to the Joint Economic Committee on Thursday may turn out to be the highlight for financial markets this week as participants look for clues at what level the Fed will end its near 2-year tightening campaign.
Official UK output data for Q1 2006 will be released on Wednesday. Although estimates have moderated in recent weeks following a series of weak data, growth should still at least match that in the last quarter. We think it could be slightly stronger at 0.7%. Both services and manufacturing PMIs eased in March, but were above the key 50 level and the three month averages are consistent with above trend growth. Industrial production saw its first fall in four months in February, but even a flat reading for March, barring any revisions, would equate with 0.7% growth in Q1, compared to a 0.9% contraction in Q4 2005. The more disappointing news was from the trade accounts, which revealed a widening of the UK goods deficit to a record Â£6.5bn in February, the same as the revised figure for January. Ahead of the publication of the national accounts data, retail sales for March this morning are expected to show another rise. The data is a notoriously volatile series and with Easter this year falling in April, the March figures could be distorted. An update on the state of public finances for March will this morning show whether the Chancellor met his fiscal year borrowing target of Â£37bn. It will be close. The latest consumer lending numbers from the BBA and M4 money supply data for March will also attract some attention today. The latest quarterly CBI Industrial trends survey tomorrow, April GFK consumer confidence on Friday and the Nationwide house price survey for April are the other UK data highlights this week.
The most sensitive release in the euro zone this week is the German IFO business survey, due tomorrow.
We are forecasting a small decline to 104.9 for April after the survey scaled a 15-year high in March. The ECB will have particular interest in March EU-12 money supply and the flash estimate of April EU-12 CPI on Friday. Central bank interest rate decisions are due in Canada, New Zealand, Sweden and Norway.
Lloyds TSB Bank,
London EC3R 8BQ
0207 283 - 1000
Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is a signatory to the Banking Codes, and represents only the Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business.
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."