Recap 6-26-13


With the GDP revision today, most brokerage houses now expect a sub 2% growth for the first half of the year, given that a 3.2% grown in 2Q is well above consensus. Even though this is a revision (and not the final one!) of growth 3 months ago, the FOMC’s projections were likely dependent on it. Hence, bonds rallied sharply given that this is likely to make the Fed rethink its taper timeline.

Separately, Citi on EU bonds: July has the most supportive net cash requirement (-€78bn) in 2013: €67bn of gross supply vs €36bn coupons and €109bn redemptions.


  • The 3rd revision of US GDP was substantially weaker, at 1.8% vs 2.4% prev. Personal consumption was revised down sharply.
  • Goldman: the better data have collided with a meaningful tightening in our Goldman Sachs Financial Conditions Index (GSFCI) of about 30 basis points. Econometrically, we estimate that this tightening might shave about 0.4 percentage points from real GDP growth over the next year.
  • Japan’s Deputy Economic Mishimura: Japan’s economic recovery will be seen in share prices after next month’s elections.
  • Norway Unemployment rate 3.5% April vs 3.7% previous and consensus.

Upcoming Data:

  • Thu: German Unemployment, EU money supply, US Personal Income, Jobless Claims, Pending Home Sales, Dudley Speaks, Japan CPI, IP
  • Fri: Italy Business Confidence, Williams Speaks
  • Mon: Australia Mfg PMI, China PMI, EU PMI, EU CPI Estimate, Unemployment, US ISM Mfg
  • Tue: RBA, Australia Service PMI, China Non-Mfg PMI, Australia Trade Balance, Retail Sales, China HSBC Service PMI