Economic Growth Disappoints Again in Q2

Wells Fargo Research Team Wells Fargo

U.S. Review

Economic Growth Disappoints Again in Q2

GDP growth expanded at a 1.2 percent pace in the second quarter with consumer spending serving as the key driver of overall economic activity.
Fed officials this week decided against a rate increase but signaled that improving economic conditions and greater labor market utilization will likely lead to a rate hike later this year.
Durable goods orders fell again in June implying that the headwinds facing the manufacturing sector are likely to continue in the months ahead.

Global Review

Lower European Growth in Q2; Timid BoJ Decision

Growth in the United Kingdom improved in the second quarter, growing a more-than-expected 0.6 percent, quarter over quarter, not annualized, up from an unrevised rate of 0.4 percent during the first quarter.
The Eurozone economy slowed down in Q2 2016 by growing 0.3 percent on a sequential basis (not annualized) and compared to a print of 0.6 percent during the first quarter of the year.
The Bank of Japan (BoJ) disappointed the market with a very timid response by expanding its purchases of exchange traded funds by ¥2.7 trillion a year.

Download the full report

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.