US GDP and G7-summit amongst major market movers today - Rabobank

Bas van Geffen, Quantitative Analyst at Rabobank, suggests that the second estimate of US GDP in addition to the G7-summit, which kick starts today are going to be amongst major market moving events for today’s session.

Key Quotes

“The United States Bureau of Economic Analysis will release its second estimate of GDP today. Following the UK’s downward adjustment, an upgrade of the Q1 growth forecasts is expected in the US. It appears that despite efforts by the BEA to fix the seasonality in their GDP estimates, their first Q1 estimate still exhibited a seasonal pattern – leading to some (perhaps predictable) disappointment when the numbers were first released.”

“We are not the only ones to second guess Q1 GDP. The FOMC Minutes revealed that they continue to be optimistic, and they believe the slowdown might only have been transitory. A small upgrade in this second estimate would certainly strengthen their case, though the central bank is unlikely to postpone its plans if the BEA doesn’t adjust its Q1 statistics. We remain doubtful whether the Fed isn’t getting ahead of itself – or, indeed, the economy – given the lack of actual economic stimulus delivered by the Trump administration so far.”

“The G7-summit that is starting today is unlikely to bring a much brighter outlook in terms of US policy. As Trump meets with the other world leaders, differences remain large. EU President Tusk stated earlier this week that Trump and the EU remain divided over important issues such as trade policy. Indeed, Trump’s protectionist tone doesn’t appear to be weakening. According to German magazine Der Spiegel, German car manufacturers may be Trump’s next target: “The Germans are bad, very bad. See the millions of cars they are selling in the US. Terrible. We will stop this,” they cite the US President. That surely sets the tone for this weekend’s get together! At the very least it should give us some candid Twitter comments to look forward to… Happy Friday!”