US: Q2 GDP and advance goods trade deficit in focus - TDS

Research Team at TDS, suggests that the US advance goods trade report will set the stage for next week’s more comprehensive international trade report. 

Key Quotes

“TD expects the advance goods trade deficit to narrow from -$64.5bn to -$62.0bn (market: -$63.0bn) as a result of lower energy prices weakening imports. Exports should decline due to a stronger dollar and weaker global backdrop, providing a partial offset to weaker import activity.

Revisions to Q2 GDP are expected to be to the downside, with TD calling for a below-consensus second print of +0.9% q/q (annualized) due to weak inventories; the market is also looking for a slight downward revision to +1.0% q/q.

Wholesale inventories are likely to begin Q3 on a soft note, with the market calling for a modest +0.1% m/m gain in July.

Lastly, revisions to University of Michigan Confidence should be to the upside, with TD and the market calling for 91.2 and 90.8, respectively, after the initial reading of 90.4; we also look for any change in inflation expectations.”