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U.S. Growth Trips Up Against Strong Forecasts

ByAndrew Dovey
Published 04/26/2013, 10:33 AM
Updated 07/09/2023, 06:31 AM
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U.S. Growth

As we mentioned yesterday, today’s highlight was always going to be the U.S. growth data. Trading conditions were extremely subdued up until the data release, with 2.5% quarter-on-quarter growth missing expectations of 3%. The dollar reacted negatively, dropping most notably against the yen to 98.00 and assisting the GBP and EUR to 1.5490 and 1.3030 respectively. Stronger Michigan consumer sentiment at 76.4 compared to 72.3 last time and 73.2 forecasts did limit the dollar losses, however sentiment appears finely balanced. On reflection, the official forecast for US growth this time round was perhaps slightly optimistic, and the actual release in our opinion wasn’t too poor. Realistically the likes of Europe and the UK would pander to 2.5% quarterly growth, so there is no cause for concern from our standpoint.

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Next week’s ECB meeting is now the focus, with consensus growing that the central bank will cut rates. Investment banks have been jumping onto this wagon all week, whilst at the same time following the IMF and slashing their growth forecasts for Europe. Watch this space and read our weekly newsletter for our outlook.

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