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Jan Hatzius Not Expecting 3% GDP Growth This Year or Next

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It's GDP day, Trump issues a warning to North Korea, and EU unites over Brexit. Here are some of the things people in markets are talking about today.

GDP day

First-quarter growth data released today showed the U.K. economy slowing more than forecast, with expansion of 0.3 percent over the period. The slowdown was driven by weakness in consumption, as inflation continued to eat into wages. The gross domestic product print in Spain showed renewed momentum, with the economy growing 0.8 percent in the first quarter. France and Austria registered expansions of 0.3 percent and 0.5 percent respectively. Also this morning in Europe, the flash inflation estimate for April showed core inflation in the euro area expand at the fastest rate in almost four years. At 8:30 a.m. Eastern Time U.S. growth figures will be released, with an annualized first-quarter rate of 1 percent expected

Trump warning

In an interview with Reuters, President Donald Trump warned that a "major conflict" with North Korea is possible if diplomatic solutions fail. The president, who said in the interview that he is finding the job more difficult than he'd expected, is struggling to achieve as much as he wanted ahead of his administration's 100-day anniversary tomorrow. A full breakdown of what he has achieved so far shows he hasn’t yet signed into law any of his major policy priorities.

EU united

British Prime Minister Theresa May finds herself facing an unusually united European Union in Brexit negotiations, with the leaders of the 27 other member states holding a summit in Brussels tomorrow to agree a joint position. One positive sign for the U.K. is the possibility that the EU may allow talks to cover a trade deal before both sides agree on a specific exit fee for Britain.  

Markets flat 

Overnight the MSCI Asia Pacific Index slipped 0.3 percent, with Japan's Topix index dropping by the same amount while still managing to post its strongest weekly performance since December. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:50 a.m. as the euro rose to $1.0937 after inflation data. S&P 500 futures were broadly unchanged.

Earnings

Barclays Plc continued the recent European-bank trend by posting results that failed to live up to expectations, with a surprise drop in fixed-income trading revenue seeing shares trade 5.5 percent lower by 5:57 a.m. In the U.S. today it's the turn of oil majors to report, with results from Exxon Mobil Corp., Chevron Corp., and Phillips 66 Co. all due. 

What we've been reading 

This is what's caught our eye over the last 24 hours.

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