The IMF Sees Growth buy This Fails to Buoy the Dollar

The IMF Sees Growth buy This Fails to Buoy the Dollar

15 Apr 2019

The dollar is mostly weaker against most major currencies on Monday.  Asian shares were mixed with the Nikkei rising 1.4%, and the Shanghai Composite falling 0.3%.  European bourses are mixed mid-day while US futures are pointing to a higher open.  10-year UST yields are down basis points at 2.56.  Commodity prices are mostly lower, with WTI oil down 0.8%, copper down 0.4%, and gold down 0.3%.

Growth Estimates are Subdued

The softer dollar tone comes as growth forecasts have been lower into a new range. The Atlanta Fed’s GDPNow model is now tracking 2.3% Q1.  The New York Fed’s Nowcast model is tracking 1.4% SAAR for Q1 and 2.0% for Q2.  Both models have seen their forecasts rise in recent weeks.  Advance Q1 GDP data will be reported April 26. 

The US and Japanese trade officials today begin two days of meeting in Washington to eventually conclude a bilateral agreement. U.S. officials, including Trade Representative Bob Lighthizer, do not want a long negotiation period. They want which action that includes opening up Japan's ag sector to US farm products, with Japan signaling that could occur based on language in the CPTPP.

The IMF Sees Strong Growth

Global growth will 'firm up’, according to a communique from the IMF's steering committee, released this weekend in Washington.  The statement said that growth is projected to firm up in 2020, but risks remain tilted to the downside. These include trade tensions, policy uncertainty, geopolitical risks, and a sudden sharp tightening of financial conditions. To protect the expansion, we will continue to mitigate risks, enhance resilience.

The possible U.S./China trade accord would be a so-called executive agreement that would not be submitted to Congress for ratification. But some lawmakers and others are concerned that any U.S./China deal would not have the same legal structure as a free-trade agreement.

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