US Q2 GDP revised to 3.7%, beats estimates
Key Notes:
- Australia private capex q/q -4% vs. -2.5%
- German import prices m/m -0.7% vs. -0.3%
- UK Nationwide HPI m/m 0.3% vs. 0.4%; y/y 3.2% vs. 3.1%
- Spain GDP q/q 1.0% vs. 1.0%; y/y 3.1% vs. 3.1%
- US GDP Annualized q/q 3.7% vs. 3.2%
- US GDP Price index annualized q/q 2.1% vs. 2%
- US PCE annualized q/q 3.1% vs. 3.1%; Core PCE q/q 1.8% vs. 1.8%
- Weekly Initial jobless claims 271k vs. 274k
Later
- Pending home sales
- Jackson Hole symposium – Day 1
The markets were showing signs of recovery after the PBoC intervened with rate cuts and reducing the RRR requirements. The Asian markets were subdued this morning with no major releases on the wire. Australia’s private capital expenditure fell -4% well below estimates of 2.5%, indicating a souring business sentiment. However, the Aussie was unchanged on the data as the currency initially gained to the highs of 0.717 before giving back its gains. AUDUSD was trading flat for the day. The Kiwi was also subdued as the currency was modestly higher with 0.1% gains at the time of writing.
The Japanese Yen continued to weaken against the Greenback as the USDJPY gained 04% for the day to trade near the highs of 120.471 and was highlighted by a break of the previous two session’s highs, posting a steady recovery. Against the Euro and the British Pound, the Yen was however trading stronger with both the EURJPY and the GBPJPY trading weaker.
The European trading session saw some minor headlines with German import prices falling -0.7% for the month. Spain’s GDP matched estimates, rising 1% for the month and 3.1% annualized. The Euro continued its retreat off the recent highs with the single currency weaker as EURUSD fell -0.56% to trade near 1.125.
The British Pound also stayed weak after collapsing off the highs of 1.57 yesterday. The Cable was seen trading at 1.541 at the time of writing losing -0.29% for the day, posting a near 3-week low. There was no major news release from the UK today.
In the US session, the markets were focused on the revised second estimate of the US GDP which rebounded sharply rising 3.7%, beating estimates of 3.2%. Overall data was positive with the GDP price index also posting modest gains, rising 2.1%. The PCE index, on the headline rose 3.1%, but the core PCE remained unchanged at 1.8%. The muted inflation continues to worry the US Fed as inflation has failed to hit the Fed’s 2% target rate despite an overall recovery in the US economy since the second quarter.
Other data from the US included the weekly initial jobless claims which fell less than expected to 271k ensuring that the US labour markets remained healthy and could continue to grow.
Earlier in the day, WTI Crude oil briefly rallied above the $40 mark but eased back from the daily highs. Crude oil posted gains of 2.8% after falling yesterday to test the lows of $38.5 despite a fall in US weekly crude oil stock piles.
Later in the evening, the US pending home sales data is due for release. The annual central banker’s meet, the Jackson Hole symposium gets underway today with inflation and monetary policy being the main topic on the agenda. Fed Chair, Janet Yellen will not be attending the conference.
