Posted Jul 30, 23:14

Fed Hawks Grounded Despite Soaring GDP

GDP (Annualized) (2Q) [P] 4.0%
GDP Price Index (2Q) [P] 2.0%
ADP Employment Change (JUL) 218K
3 hours ago: 

A strong first quarter GDP reading sparked speculation the Fed won't tilt toward sooner rate hikes but a mostly dovish Yellen cut the US dollar's wings. Still, USD was the top performer on the day while the yen lagged. Look for markets to continue digesting the news while keeping an eye out for an Argentine default.  In our latest Premium Insights, AUDNZD and NZDUSD hit their final targets, while USDJPY was stopped out. EURUSD and USDCHF nearing their final targets, while EURJPY and GBPUSD remain in progress. All details are in the Premium Insights. New York traders filled the thermos with coffee ahead of a busy day that started with ADP employment. The report added little to the debate at 218K compared to 230K expected. It was a small miss but close enough to expectations to keep the good news on the jobs front intact.

The surprise came shortly afterward when the first reading on Q2 US GDP was +4.0% compared to 3.0% expected. Q1 was also revised to 2.1% from 2.9%. There were some caveats in the report including a large build in inventories but the overall picture was strong and the US dollar climbed 30-80 pips across the board.

PREMIUM INSIGHTS Update: Jul 29, 19:35
A Rotation Trade Hidden in the Fed Talk Jul 29, 2014 22:33: 

The US dollar climbed broadly as traders buckle up for a big day but the source of buying might not be what you think. The dollar was the top performer while the kiwi continued to lag. The day ahead is jam-packed with top-tier indicators.  In today's edition of the Premium Insights, we publish a new justification for the existing EURJPY trades with two new charts as they net +150 pips gain. Both EURAUD trades are netting +500 pips gain, while last week's PRE-RBNZ AUDNZD trade netted +190 pips.1 of 2 GBPUSD long  was stopped out. Full access to trades & charts is in the Premium Insights. The market will be transfixed on the news and releases in the day ahead but below the surface a little-talked-about trade might be poised to have a bigger impact.


Firming USDX, NFP to Overshadow FOMC Jul 29, 2014 17:55: 

The most important week of US economic releases before the “unofficial” start of summer is kicking off with a bang as US consumer confidence hit a fresh 7-year high in July at 90.9, following June's 86.4.  Consequently, the US dollar extends its 3-week winning streak ahead of the week's key figures. Full charts & analysis.