Daily update
Daily update
- Markets (at least bond and foreign exchange markets) tend to pay relatively little attention to data revisions. New but inaccurate information is valued more than delayed but more accurate information. Today’s Eurozone GDP revisions may be a little different because seven economists are forecasting a revision to a negative number. A negative number would allow for suitably apocalyptic, click-bait style reporting. In the real world, no one will notice the difference between 0.0% and -0.1%.
- Japanese first-quarter GDP was also revised—but as this was revised higher, it was less sensational. A reasonable part of this was due to higher inventories (goods piling up in warehouses are not necessarily a positive signal for the future), though corporate spending was also stronger.
- China’s state banks have been reducing deposit rates. This might encourage consumers to put savings to work in the economy—but it depends on how money is being saved. If savings are being held as insurance against future uncertainty, rate cuts are less impactful. Rate cuts hint at some concern about domestic demand.
- In an otherwise quiet data calendar, US initial claims may get some attention. The US labor market has a range of conflicting signals for investors to choose from these days.
