UK GDP and Fed dominate headlines

  • EUR M3 Money Supply y/y: 5.0%
  • GBP Prelim GDP q/q: 0.6%
  • USD Core Durable Goods Orders m/m: -0.5%
  • USD Durable Goods Orders m/m: -4.0%
  • USD Pending Home Sales m/m: 0.2%
  • USD Crude Oil Inventories: 1.7M
  • USD FOMC Statement
  • USD Federal Funds Rate: <0.50%

Yesterday’s economic calendar was jam packed with high tier data, with the release of UK GDP and the highly anticipated FOMC statement. Firstly, UK GDP grew faster than expected at 0.6% in the second quarter, as businesses appeared to shrug off Brexit jitters in the run-up to the June 23rd Referendum. The figure was boosted by the Industrial sector as it posted its best performance in almost 17 years. Although this reading exceeded economists’ consensus, Sterling remained relatively unchanged to the pre-Brexit figure as sentiment in the Pound shifted drastically, after the leave result.

The biggest event risk of the week occurred yesterday evening. The FOMC statement was the main focus after rates were kept on hold at 0.5% last night. Nine out of 10 Fed members voted to keep the rate unchanged, with Esther George being the only dissenter wanting to see an increase of 25bp. The change in the tone of the statement has left the door open for a potential move later this year, possibly in September’s meeting. Fed members stated that near term risks to the economic outlook have diminished and the labour market has strengthened. Fed officials also stated that household spending has been ‘growing strongly’ and economic activity is expanding at a moderate pace. The Fed showed they are cautious as they will continue to closely monitor inflation and global economic financial developments.

  • EUR German Prelim CPI m/m
  • EUR Spanish Unemployment Rate
  • EUR German Unemployment Change
  • USD Unemployment Claims
  • JPY Household Spending y/y
  • JPY Tokyo Core CPI y/y
  • JPY Retail Sales y/y
  • NZD ANZ Business Confidence
  • AUD PPI q/q
  • JPY Monetary Policy Statement

Also from the States, Core Durable Goods disappointed, registering a worse than expected -0.5% against the forecast of 0.3%. The figure signaled a four-month low for Durable Goods, which gives the market a good indication of Production and Manufacturing activity. 

After the high tier releases seen Wednesday, today will be a much slower day with little data scheduled on the docket. In the morning, the German monthly inflation figure will be released, followed by Germany’s Unemployment change figure. The US also post their Weekly Unemployment Claims figure, at 13:30 BST.