U.S. GDP accelerated to a 2.6% pace in Q2, more than doubling the 1.2% Q1 rate (revised down from 1.4%) and compares to the 1.8% clip in Q4 (revised down from 2.1%). Personal consumption increased 2.8% from Q1’s 1.9% (revised up from 1.1%). Fixed investment rose 2.2% following the prior 8.1% Q1 gain (revised from 11.0%), with residential spending falling 6.8% from 11.1% (revised from 13.0%) and business spending up 5.2% from 7.2% (revised from 10.4%). Government consumption edged up 0.7% from -0.6% (revised from -0.9%), with Federal spending at 2.3% from -2.4% (revised from -2.0%), including a 5.2% increase in defence spending from -3.3% (revised from -3.9%). State and local spending dipped 0.2% from 0.5% (revised from -0.2%). Inventories subtracted $1.5 from -$61.9 bln in Q1 (revised from -$47.0 bln). Net exports added $7.3 bln after adding $8.9 bln previously (revised from $9.4 bln). The GDP chain price index posted a 1.0% increase, halving the 2.0% gain previously (revised from 1.9%), with the core rate at 0.9% from 1.8% (revised from 2.0%). The mix in the report, with slightly slower than hoped for growth (a 3 handle had floated in the market) and slippage in inflation, should be slightly bullish for Treasuries and USD negative, especially in the wake of the ACA defeat last night.
The monthly Canadian data was a significant beat. Canada GDP surged 0.6% m/m in May after the 0.2% gain in April, blasting past expectations for (median +0.2%). Goods production surged 1.6% in May while service producing industries improved 0.2%. The hefty gain in goods production was led by a 4.6% run-up in mining, quarrying and oil and gas extraction. The oil and gas subsector grew 7.6%, driven by a 13% bounce in non-conventional oil extraction after declines in March and April.
USDCAD traded down under 1.2500 to 1.2438 before recovering, EURUSD rallied back over 1.1750 before settling around 1.1720.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Senior Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.