Market movers today
In the US , the preliminary Q1 GDP growth estimate is due for release today. There are signs that economic activity slowed in the first quarter, with growth in consumer spending coming out weaker than first expected and the investment indicator not as strong as previously. The Atlanta Fed suggests GDP growth was 2.0% q/q AR while the NY Fed's GDP indicator says 2.8%. We believe the former is more likely than the latter. However, we remain optimistic about full-year GDP growth due to the tax package among others and hence we expect the Fed to continue its gradual hiking cycle.
In the UK , the first estimate of GDP growth in Q1 will be released. According to indicators, GDP growth slowed in Q1 compared to Q4 17, the question is more by how much. While the PMIs suggest GDP growth is likely to have slowed to 0.3%, the NIESR GDP estimate is as low as 0.2%. We estimate GDP growth was 0.25%, implying an annual growth rate of 1.4% y/y (don't be surprised if it is only 1.3%), which is among the lowest in the advanced economies. Looking at real wage growth and business investments' intention, it is difficult to see a scenario with much higher GDP growth in the UK this year despite the political agreement on transition.
In the Scandies, we get Swedish retail sales data, which we expect to be on the weak side, reflecting very soft sales figures from HUI earlier in the month. Moreover, the monthly household lending numbers are published, which remains upbeat just below 7% y/y but which we expect to moderate going forward amid a slowdown in the housing market.
In Norway , we expect the April NAV labour market report to show gross unemployment returning to fall by 1,000 people m/m after Easter distorted last month's release. This should take the registered unemployment rate down to 2.3%, which would be in line with Norges Bank's projections in the March monetary policy report and, in isolation, lends support to expectations of a rate hike in September.
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