Forexlive Americas forex news wrap: US GDP for 4Q comes in below expectations at 1.9%

Forex new for the NY session on January 27, 2017

• US stocks end the day mixed. Up on the week


• CFTC commitment of traders: EUR and JPY shorts trimmed in the current week


• US crude oil futures settle at $53.17.


• US 10 year yield trades at day lows


• More Mexico: White House says Mexico"s Pena Nieto/Trump will work differences out


• Trump: We will work on fair relationship and a new relationship w/ Mexico


• Trump: US renews its bonds with Britain today


• Baker Hughes oil rig count rises to 566 from 551 last


• Outside day brewing in WTI crude


• A mixed week for European stocks


• Trump will sign executive orders temporarily banning refugees from some countries


• European stocks finish the week lower


• Canada govt April-Nov budget -$12.66B vs +$1.03B a year ago


• Output drop suggests good but not perfect OPEC compliance - report


• January 2017 Michigan consumer sentiment final 98.5 vs 98.1 exp


• Oil slides but the real test will be next week


• US dollar starting to slide after worst annual growth since the crisis


• Trump to have a call with his boss on Saturday


• US fourth quarter 2016 advance GDP +1.9% vs +2.2% expected


• December 2016 US durable goods -0.4% vs 2.6%

In other markets today:

• S&P -0.09%


• Nasdaq +0.10%


• Dow -0.04%


• 2 year -0.7 bp


• 5 year -2.0 bp


• 10 year -2.0 bp


• 30 year -2.3 bp 


• Spot Gold $1191, +$2.80 or +0.24%


• Crude oil $53.12, -1.23%

The US GDP for the 4Q came in weaker than expectations at 1.9% vs 2.2% estimates. Personal consumption was up 2.5% QoQ which was as expected.  

The GDP price index was up 2.1% as per expectations. The core PCE was also in line at 1.3%.  

Net exports dragged down GDP by the most since 2010.  The net exports subtracted 1.7% from the GDP in the quarter.  That negative was matched on the plus side in the Consumption category (it added 1.7% to GDP). Gross private investment contributed 1.67% and Government contributed +0.21% to the 1.9% figure  The export number was quirky (soybean exports had a big impact in the 3rd and 4th quarter) but you cannot rule out the negative from a stronger dollar as well.

The US durable goods for December were not all that great either. The headline fell by -0.4% vs an expected gain of 2.5%.  The other breakdowns of the data was not as bad. As a result, the markets took the headline fall in stride.   

Later in the morning the Michigan Sentiment index rose to 98.5 from 98.1. That was good enough for a 13 year high as consumers continue to show confidence in the aftermath of the Trump election.

The USD was mixed in trading today with the greenback risiing against the GBP, JPY, CAD and falling marginally vs. the EUR, CHF, AUD and NZD.   

The EURUSD is ending the week with a 117 pip trading range. That is the most narrow trading week going back to Dec 21 week 2014. The 1.0706 and the 100 hour MA at 1.0722 currently will remain upside resistance in the new trading week.  Stay below is now bearish. A move above is more bullish.

The USDJPY moved above the 100 bar MA on the 4-hour chart in the Asian Pacific session and stayed above that MA for the rest of the day (currently at 114.658).  The move above was the first venture above that MA since January 9th.  The 50% of the January range at 115.55 and the 200 bar MA on the 4-hour at 115.83 are upside targets in the new trading week.

The GBPUSD tested the 100 day MA on two separate occasion today - and each time the price bounced. On Wednesday the 100 day MA moved and closed above the 100 day MA for the first time since Brexit.  Do you think, the market would fail on that break after only two day?  Nope.

Stocks did pretty well this week with the Dow moving up over 20K.  The S&P and Nasdaq closed at record highs during the week as the first week of President Trump was at times tumultuous and at other times a breathe of fresh air from the staid "establishment"   Theresa May and the UK suddenly have another country who has to work out bilateral agreements with other countries.    It won"t be all that bad.  But the game is still only in the top of the 1st inning.  There is a long way to go.

Below is a snapshot of the % changes for the day for the major currencies vs each other.

Have a great weekend.....

 

Forexlive Americas forex news wrap: US GDP for 4Q comes in below expectations at 1.9%
Forexlive Americas forex news wrap: US GDP for 4Q comes in below expectations at 1.9%
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