The U.S. economy appears to have bottomed in April

Wells Fargo Research Team Wells Fargo

U.S Rewiew

The U.S. Economy Appears to Have Bottomed in April

The beginning of this week saw some optimism that the economic downturn could be relatively short-lived, but data through the rest of the week provided grim reminder of the economic damage from COVID-19.
Jobless claims declined for the eighth straight week, but continuing claims posted their first decline during the pandemic period, a positive signal for the labor market.
The second estimate of Q1U.S.out put revealed as lightly worse decline in real GDP. Q2 will be much worse.

Global Review

Keep Looking Forward, Don’t Look Back

Q1 GDP for the OECD economies, which includes most developed economies, fell 1.8% quarter-over-quarter and 0.8% year-over-year. Considering the slowdown seen in emerging economies such as China, India and Brazil, we expect the decline in Q2 GDP for the G20 economies to be even larger.
Some modestly encouraging signs are starting to emerge. PMI surveys across many countries improved in May, as did German IFO business confidence and Eurozone economic confidence.
That said ,with the outlook still some what uncertain,weexpect the ECB to ease monetary policy further next week.

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Wells Fargo Research Team

Wells Fargo

EUR/USD stays below 1.1850 after dismal German sentiment data

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