ANZ first quarter GDP forecasts:

USA:

  • GDPNow Q1 is 2.0% q/q annualised
  • Momentum eased over the past week amid softer manufacturing and housing data

Euro area:

  • GDPNow Q1 is just below 0.2% q/q
  • Our estimate eased slightly over the past week ... disappointing trade data and a fall in construction output

Japan GDPNow Q1 is 0.0% q/q

  • Our initial read of Japanese GDP for Q1 2016 suggests slightly positive growth
  • The GDPNow estimate for Q1 is more or less flat ... Momentum eased amid weakness in the factory sector (a decline in industrial production) and in services (a further contraction in the Tertiary industry)

China GDPNow Q1 is 6.6% y/y

  • The estimate was up modestly over the week

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ANZ's GDPNow is an indicator of underlying momentum in real time:

  • It can serve as an 'early warning indicator' of possible shifts in momentum relative to how consensus is viewing current GDP growth
  • The model inputs comprise both soft (eg survey) and hard data that reflect the supply and demand side of the economy
  • Data were chosen on the basis of satisfying three criteria: relevance (to underlying GDP), availability, and timeliness
  • Nowcasting GDP is only useful as a short-term predictor
  • Its predictive ability drops off sharply after the current quarter
  • The accuracy of GDP nowcasting is low at the beginning of the quarter and then improves over time as more information is incorporated into the estimation
  • The standard error of the GDPNow estimate tends to settle down 30 days prior to the release of the GDP estimate