The market is forecasting a big drop in US GDP revisions
If the +0.2% reading in the advance Q1 GDP release wasn't bad enough the revision estimates are even worse
Bloomberg has -0.9% estimated from their band of economists and Reuters has -0.8%. Goldman Sachs revised their forecast to -1.1%
What do we know since the advance reading?
Life didn't get much better in the data but there were a couple of points that improved. Factory orders rose and the durable revisions were higher. The durable revisions might be a saving grace for GDP but probably not by much
On the bad news front, construction spending fell and the trade balance worsened. Wholesale sales dropped although inventories still don't point to any big builds
That's just a snapshot look at the data that came out after the flash GDP numbers
How is the market positioned?
The market is looking for bad news but that's not really being reflected in the price as we've done nothing but go higher. That's mostly because this is old news so Q2 is what most people are concentrating on. As the market is expecting GDP to sink, the biggest move in the buck will probably come if the number beats expectations as that will take some pressure off of Q2. If we post anything from -0.6% or better then the dollar could well push back towards the highs. Even if we hit expectations there may not be much downside unless we are much worse than 1.0%
If we do see a move south then it could be a good opportunity to grab a dip. I'm personally not looking to touch it unless we see a decent dip to around 121.50/75 but that's probably well out of the ball park for this data
If the data is bad what it may well do is mark the top for now as the worries for Q2 will increase. That's something those in longs might want to bear in mind and maybe look to lock in some profits. We've also come a long way this week and there may be some profit taking seen as the day draws to a close
