Market wrap: US 2Q GDP was the key event – Westpac

In a market wrap, analysts at Westpac Banking corporation explained that sentiment was solid into the end of the week.

Key Quotes:

“US 2Q GDP was the key event on Friday and was firm at 4.1% annualised, with solid details. Markets were prepared for a strong release and so reactions were limited despite Trump’s ebullient response to the data. US stocks closed down on the day, but up on the week. Twitter followed the lead from Facebook on Thursday, down 21% on Friday.”

“US dollar index drifted slightly lower by -0.1% and most currencies were close to unchanged on the day with EUR/USD holding around 1.1655 and USD/JPY hovering around 111.00. AUD was one of the few notably firmer currencies, gaining +0.4% on the day, closing the week above 0.7400. NZD was marginally firmer at 0.6790 and so AUD/NZD closed just below 1.0900.”

“US 2Q GDP grew 4.1% (annualised), close to expectations and the fastest growth pace since Q3 2014. Q2’s gain reflected a big upside surprise on consumer spending, continued strong business investment and a sharp decline in the trade deficit (due to one-off frontloading of exports ahead of retaliatory tariffs on US products).”

“French 2Q GDP grew +1.7%y/y, missing expectations of +1.9%y/y, partly due to rising imports but also the household consumption component disconcertingly contracted -0.1%.
US yields held firm with US 10yr yields around 2.96% for a second day, 2yr yields firm at 2.67% and Fed fund futures unchanged.”