NORGES: RATES PROBABLY AT CURRENT LEVEL QUITE SOME TIME

RATES MAY NEED TO BE ON HOLD LONGER THAN ENVISIONED: NORGES

MNI: NORGES BANK LEAVES RATES UNCHANGED AT 4.50%

MNI WATCH: CNB Seen Cutting 50Bps to 5.25%, Signal Slower Pace

MNI China Daily Summary: Tuesday, April 30

MNI BRIEF: China To Keep Tackling Risks In Real Estate, Debts

MNI: BAKER HUGHES US RIG COUNT 605; OIL RIGS 499; GAS RIGS 102

BoE Data Watch

RBA Data Watch

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

GDP/PCE Q1 Advance Ahead, With Scope For Core PCE Beat

US OUTLOOK/OPINION
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange Bullets
  • Bloomberg consensus puts real GDP growth at 2.5% annualized in Q1 vs 2.7% from the Atlanta Fed’s GDPNow, a relatively small gap between the two estimates after the GDPNow has outperformed analysts in recent quarters.
  • Having averaged 2.15% in 1H23, a 2.5-2.7% print would imply no sign of payback from the two particularly strong readings of 4.9% in Q3 and 3.4% in Q4.
  • The Atlanta Fed estimates that a large part of the relative slowdown from the 3.4% in Q4 is from net exports, seen dragging -0.5pps from growth after adding +0.25pps in Q4.
  • Personal consumption meanwhile is seen holding a strong 3.0% after the 3.3% of Q4.
  • However, with increased focus on supply side strength, the inflation data within the GDP report will be even more important in guiding the market reaction, with potentially a reduced sensitivity to GDP upside surprises if not met with firmer inflation.
  • To this end, consensus sees core PCE inflation increasing 3.4% annualized in Q1 after 2.0% in Q4. That ties in with post CPI and PPI analyst estimates we’d seen averaging ~0.27% M/M for core PCE inflation in March (released tomorrow).
  • However, there is potential upside here. That 0.27% M/M pace would yield 2.7% Y/Y although Powell said last week the Fed is tracking core PCE little changed at 2.8% Y/Y in March. Tomorrow could reveal if that’s based on a stronger March reading or upward revisions to prior months, but it leaves scope for a modest beat for today’s core PCE print.
249 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Bloomberg consensus puts real GDP growth at 2.5% annualized in Q1 vs 2.7% from the Atlanta Fed’s GDPNow, a relatively small gap between the two estimates after the GDPNow has outperformed analysts in recent quarters.
  • Having averaged 2.15% in 1H23, a 2.5-2.7% print would imply no sign of payback from the two particularly strong readings of 4.9% in Q3 and 3.4% in Q4.
  • The Atlanta Fed estimates that a large part of the relative slowdown from the 3.4% in Q4 is from net exports, seen dragging -0.5pps from growth after adding +0.25pps in Q4.
  • Personal consumption meanwhile is seen holding a strong 3.0% after the 3.3% of Q4.
  • However, with increased focus on supply side strength, the inflation data within the GDP report will be even more important in guiding the market reaction, with potentially a reduced sensitivity to GDP upside surprises if not met with firmer inflation.
  • To this end, consensus sees core PCE inflation increasing 3.4% annualized in Q1 after 2.0% in Q4. That ties in with post CPI and PPI analyst estimates we’d seen averaging ~0.27% M/M for core PCE inflation in March (released tomorrow).
  • However, there is potential upside here. That 0.27% M/M pace would yield 2.7% Y/Y although Powell said last week the Fed is tracking core PCE little changed at 2.8% Y/Y in March. Tomorrow could reveal if that’s based on a stronger March reading or upward revisions to prior months, but it leaves scope for a modest beat for today’s core PCE print.