The research team at Danske Bank suggests that in the US, the Markit PMI (composite) is expected to show a modest increase as the current level only reflects around 1% GDP growth, which is below their expectation of a current underlying growth rate of around 2%.
“This would justify a modest rise in Markit PMI. US new home sales are estimated to show a small decline in April after some strong months in early 2017.”
“The Trump administration is expected to release its full budget today, which is expected to contain big cuts to safety net, tax cuts and USD100bn infrastructure projects over the next decade. One major assumption is that real GDP growth will increase to 3% due to supply side effects from the tax cuts, which in our view is doubtful. We see difficulties in passing the budget given a divided Republican party in Congress.”