US GDP stronger than expected. Consumer expenditure at 2014 highs
US Core PCE below 2%
Kudlow doesn't agree on devaluing USD
Usual erratic Friday market activity, with the US Q2 GDP being the main headline on the data calendar. US Q2 GDP comes stronger than expected 2.1% vs 1.8% expected, with the Core PCE Price Index dropping below 1.8% vs 2.0% street consensus. The market reaction was relatively subdued as the figure doesn't change the picture of the upcoming FED meeting in July. A 25 bbp cut next Wednesday remain the base case market expectation. However, traders wwill be looking into further clarity on the FED's plan going forward and whether the July cut is the start of a new easing cycle or just a one-off "precautionary" cut.
Global Equities extended gains finishing the week in positive as GDP figures point out to goldi-lock once again. Hard to think of the FED cutting just by looking at these figures, however the inflation number require the FED to act and probably take action against what is to come. SP500 shoot higher after the release of the GDP data holding firmly above the 3000 level. DAX also hedged higher ahead of the FED meeting next week.
The currency space was mainly led by gains in the USD dollar, with the DXY back above the 97 level. All major USD counterparts traded lower finished in negative led by a stronger USD.
Crude traded range bound holding onto the weekly range just above the 55 level. Gold traded choppy, paring back some losses from yesterday. Global yields traded flat as traders await 31st July FED meeting.
If you missed the morning briefing from the desk click HERE