Who believes the numbers?
- US first quarter GDP comes out again today. The first data set only has about half the available information when published, and obviously more is available with the second release. Nonetheless there has been considerable concern about the quality of the seasonal adjustment process with the data.
- The expectation is for a negative growth in the US, although that is at least challenged by some of the other data. The figures probably prevent a June rate increase in the US (despite the clustering of hawks around that date), but do not prevent a rate increase at some point.
- The IMF's Lagarde said she thought the Euro could break apart (Greece leaving) and that a Greek deal would not be forthcoming this week. Markets have not been willing to contemplate the former, and have not been so optimistic as to contemplate the latter, minimising the impact of her remarks.
- Japanese inflation data came in weaker than expected, and the BoJ's 2% inflation target seems ever more remote as a prospect. Household spending fell again – households generally believe inflation to be higher than is officially reported, and worry about their real incomes in consequence.