Back
4 Jun 2015
Is all the “bad” US news out? – Westpac
FXStreet (Barcelona) - Richard Franulovich of Westpac explains that their proprietary US surprise index is showing signs that all the bad news in the US might have flushed out.
Key Quotes
“One sign that most of “bad” US news has been flushed out is that our US surprise index has fallen to below the lower -1 standard deviation threshold, a zone where it typically bottoms.”
“Notably, our index has now held below this threshold for a record sixteen consecutive weeks. That record extended run of weaker than expected data has surely lowered the hurdle for a run of positives going forward.”
“Moreover, history suggests that the “seasonal” propensity for the US data to underwhelm early in the new year is drawing to a close. The caution is that any impending upswing in the US data is unlikely to be smooth sailing - headwinds stemming from the past appreciation of the USD have not abated and nor have the adjustment pressures in the US energy sector.”
Key Quotes
“One sign that most of “bad” US news has been flushed out is that our US surprise index has fallen to below the lower -1 standard deviation threshold, a zone where it typically bottoms.”
“Notably, our index has now held below this threshold for a record sixteen consecutive weeks. That record extended run of weaker than expected data has surely lowered the hurdle for a run of positives going forward.”
“Moreover, history suggests that the “seasonal” propensity for the US data to underwhelm early in the new year is drawing to a close. The caution is that any impending upswing in the US data is unlikely to be smooth sailing - headwinds stemming from the past appreciation of the USD have not abated and nor have the adjustment pressures in the US energy sector.”