Intraday Market Thoughts

Trump Weighs in on GDP Figures

by Adam Button
Jul 24, 2018 15:13

All currencies are up against the US dollar except for the Swiss franc. G20 leaders refrained from any drama over the weekend but highlighted growing risks to the world economy. 2 days before the ECB press conference and 3 days before the advanced Q2 GDP figures from the US, markets cling to slow summer volumes despite Trump's tweets.

Click To Enlarge
Trump Weighs in on GDP Figures - Bitcoin D W Jul 24 2018 (Chart 1)

Trump weighs in ahead of GDP Data

Aside from Trump's threatening comments towards his Iranian counterpart triggering some oil volatility, the bigger news were reports about Trump telling associates he expects Friday's release of Q2 GDP to rise as much as 4.8%, compared to consensus estimates of 4.2% and Q1's 2.1%. While this should add a new dimension to the expectations parameters, FX traders continue to closely watch the 95.20 resistance on USDX and 1.1550 support in EURUSD.

The weekend featured the G20 meeting in Argentina and it featured the usual trade tensions with ministers saying risks to world growth have increased and said growth is less synchronized. They called for better communication, in part to enhance confidence. That's undoubtedly a swipe at the White House but it's not the kind of thing that's going to be remembered.

His ministers, however, were making some peace. At the G20, Canadian and Mexican finance ministers had optimistic comments on NAFTA with Morneau saying that Mnuchin had assured him that the US wants a trilateral agreement. Cable continues to be in focus after racing higher Friday from a 10-month low. Over the weekend, the EU rejected the UK's financial services plan. New UK Brexit negotiator Raab also said the UK wouldn't pay the divorce bill without a deal.

CFTC Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +. EUR +21K vs +24K prior GBP -38K vs -40K prior JPY -59K vs -40K prior CAD -47K vs -53K prior CHF -42K vs -40K prior AUD -41K vs -41K prior NZD -25K vs -27K prior

After a few weeks of big moves, the action was a bit more subdued except for in the yen. Shorts piled in as USD/JPY appeared to break out but Trump ensued all the new JPY shorts were buried under water with his latest salvo. Also consider rumours that the BoJ will terminate or rethink its QE policy as Japanese yields break above the 0% barrier/target.


Latest IMTs