There are two main events in the coming week: the (second in a row disastrous) Q1 US GDP and the April FOMC.
As DB reminds us, Q1 GDP consensus has plunged to 1% YoY (with even LaVorgna lowering his forecast to 0.7% from 1.7% following the weaker-than-expected core durable goods shipments and inventory figures). As Zero Hedge first pointed out nearly two months ago, the 'Atlanta Fed GDPNow is currently at 0.1% and has been below 1% since early March, well ahead of the street.
Assuming a weak reading, the bulls will point to the weather impact, the West Coast port disruptions and the recent strange pattern of weak Q1s relative to the rest of the year. The bears will suggest the dollar and a sluggish global economy is having an impact and that the secular stagnation theory is still alive.
As DB's Jim Reid notes, "how the Fed interprets this will be far more important though and this week's low key FOMC meeting (Wednesday conclusion) will be interesting in so far as how much they acknowledge weak Q1 growth and inflation and how confident they are that its temporary. There is no press conference or economic update, just a statement."
Aside from these two events, today we also have the April composite and services PMI and the Dallas Fed manufacturing reports.
- Tomorrow we have Q1 UK GDP which will be interesting a week before the election.
- On Wednesday in Europe we have April eurozone confidence and German April CPI whilst over in the US it’s a busy day with US Q1 GDP and the April FOMC decision.
- Thursday looks set to be another busy day as we begin with the latest BoJ statement before heading to Europe for German March retail sales, Spanish Q1 GDP and April CPI and Eurozone April CPI and unemployment.
- In terms of macro data we close the week with Japanese March CPI, US April ISM and with Greece' payment to the IMF due.
BofA's chart summarizes the above:
Source: BofA and Deutsche