Based on the factory orders data, they cite weaker overall capital goods shipments and slower inventory building. The preliminary print on Q1 GDP was 2.2% compared to 2.5% expected. The Fed is forecasting 2.4-2.9% growth this year and Q2 already looks weaker than Q1.
With Europe slowing, I just don’t see where the growth will come from. USD/JPY could continue to weaken on lowered growth expectations (and as the Japanese economy surges) but the Fed has a high threshold for more QE. A better trade may be to short CAD as the BOC moves away from a hiking bias but that still might be premature.
