Transitory weakness only in the US
Port strikes, poor weather and front-load negatives (but back-loaded positive) from the oil price slump all contributed to a disappointing Q1 GDP report.
Fear is that the something deeper may lie behind, however, and that the route to secular stagnation may be opening up.
Societe Generale says while they have long recognised these risks, this is not our baseline scenario and they agree with the Fed that much of what happened in Q1 was "transitory" and look to better numbers in the weeks ahead.
"Friday's payrolls will bring the first test; we look for a gain of 315K. Next up will be the retail sales. Good data on both fronts should ease fears of secular stagnation and see a more positive repricing of risk", said Societe Generale in a report on Monday
