After all is said and done the markets will be eagerly anticipating tomorrows Advanced GDP data which is the first clue to whether the US is still moving closer to a recovery in 2012. Market expectations are for q/q annualized rate of 2.6%. Last month’s data released on final GDP qoq for 2011 showed that the US economy grew by 3% in the 4Q of 2011. Market expectation is that the US economy is likely to show signs of a slowdown with the forecast at 2.6% for 1Q 2012.
With Europe heading into a recession, the threat of a greater crisis in Europe still looming and increasing prospects that China is slowing then it’s hard to understand how the US is moving in such a different direction with housing in the US still looking very grim and unemployment improving somewhat but if China continues to slow then there will be question marks on the US recovery too.
Despite the recent IMF upgrade to world GDP to 3.53% forecast for 2012 somehow markets have not reflected this post the IMF announcement but have rather focused more on Europe and China. Bottom line financial markets are like to be cautious going into the Advance GDP release scheduled for tomorrow.
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