MNI GLOBAL MORNING BRIEFING: UK GDP In Focus

UK GDP data gets Thursday's session underway, with a first look at Q1 growth. Later in the day, U.S. PPI comes into focus.

UK growth slows in March (0700BST)

The UK economy likely expanded by 1.0% in the opening months of the year, despite recording no growth in March, according to City forecasters.

That represents a slowdown from the 1.3% gain recorded in the closing months of the year, with growth concentrated in January, when GDP expanded at a monthly rate of 0.8%, before slowing to 0.1% in February. A 0.2% decline in December — and weak growth in October — make for easier Q1 comparisons.

Retail sales declined by 1.0% in Q1 -- dragged lower by a 1.4% slump in March -- suggesting that rising prices and the war in Ukraine took a toll on consumer sentiment in the latter part of quarter. However, analysts forecast a 0.9% rise in consumer spending over the opening months of the year.

A strong performance from the auto industry introduces upside risk to forecasts, particularly for March. Car sales -- which comprise a hefty portion of the services output -- jumped by more than four fold between February and March for a 26.3% quarterly increase. Speaking earlier in the week, Bank of England external MPC member Michael Saunders noted that consumer sentiment has fallen more sharply than business sentiment over recent months.

However, respectable Q1 growth -- if confirmed -- may prove a bit of a high-water mark for growth, with the Bank of England predicting an economic contraction later in the year.

Sweden CPI seen higher (0700BST)

Sweden's CPIF inflation is seen higher, rising to 6.4% from 6.1% y/y previously. Headline inflation is also seen higher, coming in at 6.3% y/y versus 6% in March.

US Factory Gate inflation peaked? (1330BST)

Following on from the modest slowing in April CPI, US factory gate inflation is also expected to have slowed in April, with the headline number seen at 11.0% y/y versus 11.2% in March. Core CPI is expected to have slowed from 9.2% y/y to 9.1%.

Mexico CB set for hike (1900BST)

Mexico's central bank is set for a further 50 bps hike in May, taking the key policy rate to 7.0%. MNI's emerging markets desk write that a 50bps hike is consensus, despite a further deterioration in the inflation outlook, which is expected to prompt another upward revision to CPI forecasts at this meeting. A sharper than expected upward revision to forecasts could prompt a small number of policymakers to opt for a 75bps hike this month, but they’re expected to be among the minority.

Date	GMT/Local	Impact	Flag	Country	Event
12/05/2022	0600/0700	**		UK	Index of Services
12/05/2022	0600/0700	**		UK	UK Monthly GDP
12/05/2022	0600/0700	***		UK	Index of Production
12/05/2022	0600/0800	***		SE	Inflation report
12/05/2022	0600/0700	**		UK	Output in the Construction Industry
12/05/2022	0600/0700	**		UK	Trade Balance
12/05/2022	0600/0700	***		UK	GDP First Estimate
12/05/2022	1230/0830	**		US	Jobless Claims
12/05/2022	1230/0830	***		US	PPI
12/05/2022	1230/0830	**		US	WASDE Weekly Import/Export
12/05/2022	1430/1030	**		US	Natural Gas Stocks
12/05/2022	1530/1130	**		US	US Bill 04 Week Treasury Auction Result
12/05/2022	1530/1130	*		US	US Bill 08 Week Treasury Auction Result
12/05/2022	1535/1135			CA	BOC Deputy Gravelle speech on commodity shocks.
12/05/2022	1600/1200	***		US	USDA Crop Estimates - WASDE
12/05/2022	1700/1300	***		US	US Treasury Auction Result for 30 Year Bond
12/05/2022	1800/1400	***		MX	Mexico Interest Rate