US Q1 GDP: Consensus is for around 2% print - BBH

US reports its first look at Q1 GDP and the consensus is for around 2%, and if anything, after yesterday's news of a smaller than expected US trade deficit, the "whisper number" is higher, according to the analysis team at BBH. 

Key Quotes

“It may be, but in our reckoning, the improvement on trade was blunted by the news on inventories and shipments of durable goods orders.  The main drag on the economy, why it is expected to slow from the 2.9% annualized pace in Q4 18, is consumption.  The shopping sprees in Q4 saw consumption (~65%-70% of the economy) rise at a 4% annualized pace.  In Q1, it is thought to have slowed considerably (to a little more than 1%).   The Employment Cost Index, which measures wages and benefits (compliments average hourly earnings data in the jobs report), will be released and it is expected to confirm that despite a tightening of the labor market, there is no significant acceleration in labor costs.”

“The Fed can be more confident that the ECB that the loss of economic momentum is transitory.  The US has as much fiscal stimulus in the pipeline as was provided during the heart of the Great Financial Crisis.  Its targets are within spitting distance.  Meanwhile, US corporate earnings growth has been solid, and although some of the Treasury auctions may be testing the market's appetite, longer maturities may be more attractive.  Some US asset managers and banks have argued that 3% on the 10-year is an attractive yield.  Yesterday's $29 bln seven-year note sale was the best received in three months.”