 Today’s GDP data is another piece of data that underwhelmed, and adds to the string of releases casting a long shadow over the US recovery. It’s a good snapshot of where the economy is right now as it showed that consumer spending is adding less to growth, while business spending on investment actually picked up. |
 The June US durable goods report looked quite awful at first glance. Expectations had been for a modest 0.9-1.0% increase for the month, but instead total orders dropped 1%, after falling 0.8% in May. That would suggest that the string of poor economic releases from the US continues and will cast a heavy shadow on the prospects for the outlook for the recovery. |
 A strong UK sales release and upbeat results about Euro-zone lending and money supply led a move in higher yielders and boosted “risk-on” trades. But, a weak US consumer confidence report took some of the momentum out of risk seeking behavior and caused the greenback to recoup some of its earlier losses. |
 The S&P/Case-Shiller house price index showed housing prices climbing in May, but there are concerns that seasonal factors and the residual influence of the government’s home buyers tax credit are boosting the numbers prior to a fall off in the second half of the year. From a year earlier, the 10-city index rose 5.4%, and the 20-city reading climbed 4.6%. |
 A better than expected new home sales release helped to spur gains in US equities which pushed up higher yielders at the expense of the greenback. The EUR/USD tested its one-week high at the 1.30 level. |
 This week market attention is poised to turn to U.S. economic data, which include second-quarter gross domestic product on Friday. The rest of the week is full of releases as well, with new home sales released today, the Case-Schiller house prices and consumer confidence on Tuesday, durable goods and the Fed’s Beige Book on Wednesday. The week ends with second-quarter GDP, Chicago Purchasing Managers Index and final University of Michigan-Reuters consumer confidence on Friday. |
 The euro and others gained sharply against the dollar Thursday after better-than-expected euro-zone and U.S. economic data boosted investor sentiment toward riskier assets. US equities were higher as US companies releases some strong earnings, which only further propelled currencies like the Aussie and Loonie. |
 The Euro broke a spell of weakness against the Dollar as it found support from better than expected manufacturing and services data in the form of the flash version of purchasing mangers indexes and a reading on industrial new orders. US stocks moved to their highest this week as a collection of companies topped earnings estimates, raised their forecasts or did both. That helped power gains by risk sensitive commodity currencies like the AUD and CAD. |
 Fed chairman in testimony before Congress said the economic outlook was “unusually uncertain” and that the Fed was prepared to take additional action if needed. But Bernanke did seem concerned about draining liquidity as opposed to providing further stimulus, which gave his speech while dovish on the economy a hawkish feel in terms of monetary policy. Risk aversion jumped as US stocks fell, helping to boost the Dollar against higher-yielders like the Canadian and Australian Dollars. |
Daily Video Recap: US GDP and a Preview of Next Week’s US Releases
Fundamental Updates \ Nick Nasad \ 4:34 PM EDT \ July 30th, 2010In today’s video we dissect the 2nd quarter GDP results and what it means for the US recovery. The economy grew a smaller than expected 2.4% annualized rate. We also cover the important releases to look out for next week.