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1 Apr 2015
US data firming up? - ING
FXStreet (Barcelona) - Reviewing yesterday’s US data releases, Rob Carnell, Chief International Economist at ING, notes that after two months of soft data (labour market excepted), there are signs that the US may be emerging from its soft patch, and further expects US NFP to register a stronger print and put June hike back on the picture.
Key Quotes
“Most notable was the increase in the Conference Board consumer confidence survey, which rose from 98.8 (itself revised higher) to 101.3, at the headline level, with expectations rising to a level consistent with real consumer spending growth of 4.0% YoY or thereabouts.”
“That might be representative of the current run-rate, but after a dismal January and February consumer spending, this is more of an indicator of what we might expect in 2Q15, if this confidence persists, not 1Q15, which seems destined for a much weaker figure.”
“There was no particularly good news from the jobs plentiful diffusion index of the confidence survey, but it was not bad either, remaining at -4.8, the same as in February. This is not a reliable indicator of month-on-month payrolls changes (what is?), but it usually tracks the trend reasonably faithfully, on which basis, we are happy to be higher than the consensus 245k figure, given the current 288k trend.”
“There was also some good news from the housing market, where the S&P Case Shiller composite index rose on an annual basis to 4.56% from 4.44%. This isn’t a lot of movement, but the direction is at least positive.”
“If we are about to see a general strengthening of on-labour market data, and the labour data at least isn’t going to get markedly worse, then it will help put a June rate hike back on the agenda, and put the 2Y Treasury yield under upwards pressure to deliver some curve flattening. That will help the dollar to resume its rally.”
Key Quotes
“Most notable was the increase in the Conference Board consumer confidence survey, which rose from 98.8 (itself revised higher) to 101.3, at the headline level, with expectations rising to a level consistent with real consumer spending growth of 4.0% YoY or thereabouts.”
“That might be representative of the current run-rate, but after a dismal January and February consumer spending, this is more of an indicator of what we might expect in 2Q15, if this confidence persists, not 1Q15, which seems destined for a much weaker figure.”
“There was no particularly good news from the jobs plentiful diffusion index of the confidence survey, but it was not bad either, remaining at -4.8, the same as in February. This is not a reliable indicator of month-on-month payrolls changes (what is?), but it usually tracks the trend reasonably faithfully, on which basis, we are happy to be higher than the consensus 245k figure, given the current 288k trend.”
“There was also some good news from the housing market, where the S&P Case Shiller composite index rose on an annual basis to 4.56% from 4.44%. This isn’t a lot of movement, but the direction is at least positive.”
“If we are about to see a general strengthening of on-labour market data, and the labour data at least isn’t going to get markedly worse, then it will help put a June rate hike back on the agenda, and put the 2Y Treasury yield under upwards pressure to deliver some curve flattening. That will help the dollar to resume its rally.”