Upbeat on Japan, UK and US Data

The UK growth outlook has been more mixed than for the Eurozone, with the manufacturing PMI slowing sharply under the pressure of a higher pound, but other indicators, such as retail sales and the services PMI, remaining robust. Meanwhile, the ONS has just revised up 1Q GDP so that yoy growth is now 2.9%. Economists had forecast a modest softening of growth this year, but it remains solid at 2.5%, suggesting 2015 will be the best year for panEuropean growth since 2010.

There has been plenty of concern among investors about the outlook for the US economy after the surprise 1Q weakness. The labor market data in the US always has been more robust (even June's "disappointing" payrolls saw a gain of 223k), but other data are looking better of late too. The ISM rose to 53.5 in June, consumer spending was up 3.4% yoy in May, and consumer confidence numbers are bouncing back. Add in strengthening home sales, the weakness is now over and that GDP will grow at a healthy 3% clip for the rest of the year.

Japan is another source of encouragement, with economists expecting fiscal year growth of 1.9%, while they expect the Chinese government's easing measures to bite at some point and eventually produce a pick-up in growth.

Source : FX-Primus

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