Not long to go until the first US Q2 GDP numbers at 12.30 GMT
BOAML are looking higher than the general consensus of 2.6% q/q saar number expected.
Expect 3.0% GDP largely on resurgence of consumer demand
Is looking for a pick up in intellectual property investment and equipment capex
Says the oil sector could drag down structure investment once again
Trade and inventories likely had a negative impact of on growth
Government spending expected to be a drag
Strong Q1 residential investment should be more modest in Q2
Expects 1.9% PCE and 1.7% for core PCE (same as most expectations)
That's their opinion and they're welcome to it.
We also need to be aware that there's going to be some revisions to the nation income and product accounts and GDP will be revised from 2013 up to Q1 2016.
The GDP will be one thing but the PCE prices will be another. Although it's old news, strong numbers in both PCE and the core will be welcome news to the Fed. Employment costs need watching too. Employment costs are expected at 0.6% vs 0.6% prior. Of that, wages were 0.7% in Q1, benefits 0.5%.
Perhaps the biggest number to watch is consumer spending which is expected to jump 4.4% vs 1.5% in Q1. Anything around that or better is likely to boost the buck and get Sep hike expectations rising. If they miss badly (say 2% or less) then it might mean trouble for the dollar.
