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US Data Surprises Negative, But Similar Trends In Other Major Economies

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USD FX indices look too elevated relative to recent downside momentum in data surprises for the economy (EASIs). The Citi data surprise index for the US sits back at -32.4, which is fresh lows since early August 2022. However, an important caveat is that outside of the UK, other major economy EASIs are in negative territory as well.

  • The first chart below plots the Citi EASIs for the US, EU, Japan, China and the UK. The US is the weakest but only marginally (excluding the UK).
  • Arguably we would need to see greater divergence in terms of downside US surprises relative to other major economies for this to present a more material USD headwind.

Fig 1: Major Economy Citi EASIs

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USD FX indices look too elevated relative to recent downside momentum in data surprises for the economy (EASIs). The Citi data surprise index for the US sits back at -32.4, which is fresh lows since early August 2022. However, an important caveat is that outside of the UK, other major economy EASIs are in negative territory as well.

  • The first chart below plots the Citi EASIs for the US, EU, Japan, China and the UK. The US is the weakest but only marginally (excluding the UK).
  • Arguably we would need to see greater divergence in terms of downside US surprises relative to other major economies for this to present a more material USD headwind.

Fig 1: Major Economy Citi EASIs

Keep reading...Show less