US Q2 GDP picks up details mixed USD lower
|USDCAD,H1
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.