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Today final estimate of US second quarter GDP will be released at 12:30 GMT.
After contraction of -0.2% in first quarter market is expecting improved second quarter for US economy.
Past trends
- US GDP picked up pace since 2013 and increased pace in 2014. However after rising 5% and 2.2% in previous two quarters, US GDP shrank by -0.2% in the first quarter of 2015. Historically speaking US economy usually falters in first quarter.
Expectation today -
- In the first flash reading market was expecting growth of +2.6% after economy shrank by -0.2% in first quarter. Reading came at +2.3%. in Second flash reading market was expecting growth of +3.2% but reading surprised to upside to +3.7%. Today market expectation is of +3.7%
Market impact
- Expect Dollar to gain push if data surprises to upside. More so because, FED is still expecting to hike policy this year, according to latest speech by FED chair Janet Yellen yesterday. Stronger data might boost equities, especially in US as growth fear would subside.
- Weaker data however might turn out to be more bearish for equities than Dollar as weaker growth fear will sink equities, whereas dollar might gain from safe haven bids.
FXCM Dollar index is currently trading at 12090, up 0.37% today so far.
