In the wake of Friday’s stunning Brexit news, attention will increasingly focus on the messy details of implementing the UK’s decision to leave the European Union. As Reuters points out, there are several scenarios that could unfold. Meanwhile, there’s more chaos as a political crisis roils Britain’s major parties. As for the initial market reaction on Monday, the pound continued to weaken but global markets are relatively stable.
US durable goods orders fell 2.2% in May, led by a sharp decline in defense aircraft and parts. Excluding transport sector, orders fell a relatively light 0.3 percent. The so-called business investment segment of the report fell 0.7% last month, marking the third monthly decline in the last four months. “It’s a reflection of the uncertainty we’ve seen emerging, not only in the US but also globally,” advises Millan Mulraine, deputy head of U.S. macro strategy for TD Securities.
The University of Michigan’s revised index of US consumer sentiment dipped in June. “While no recession is anticipated, consumers increasingly expect a slower pace of economic growth in the year ahead,” says Richard Curtin, the chief economist of the survey.
The Atlanta Fed’s nowcast for US GDP growth in the second quarter ticked down to 2.6% from the previous 2.8% estimate (seasonally adjusted annual rate) in Friday’s revision. The new Q2 estimate still represents a solid rebound vs. Q1’s weak 0.8% rise.
Friday’s update of the New York Fed’s Q2 GDP nowcast was virtually unchanged at projecting growth at slightly above 2.0%.