Q3 GDP, advance estimate preview - Nomura

Ross J Burland FXStreet

Analysts at Nomura offered a preview of the key Q3 GDP, advance estimate.

Key Quotes:

"In the advance estimate of Q3 real GDP, we expect the BEA to report growth of 2.9% q-o-q saar (Consensus: 2.6%). Despite the negative impact from the recent hurricanes, we think the US economy continued to grow above potential in Q3. Incoming data on personal spending suggest steady growth. On the business side, reflecting healthy growth in new domestic orders of core capital goods, we expect steady gains in equipment investment. Inventory investment likely contributed strongly to Q3 growth as businesses build up inventories in the face of better demand."

"Although the recent hurricanes may have disrupted production in affected areas, incoming data suggest resilient growth in inventory investment. Further, exports in recent quarters have been strong. We expect this trend to have continued in Q3, reducing the drag from net exports, despite hurricane-related disruptions to global shipments."

"On the downside, we expect some drag from business investment in structures, likely reflecting the negative impact from the hurricanes, tighter credit standards for commercial real estate loans, and plateauing oil and gas well drilling activity. Residential investment likely remained sluggish in Q3. Residential construction has been soft, constrained by a lack of developable lots and skilled labor. Further, the recent hurricanes severely interrupted housing sales activity in August and September, lowering our expectations on brokers’ commissions."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.