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The Greenback barely got a boost from yet another upgrade to the Q1 GDP figure as Fed official Bullard seemed unimpressed and Wall Street ended the day in the red.

  • U.S. Q1 final GDP reading upgraded from 1.2% to 1.4% instead of holding steady
  • U.S. Q1 personal consumption revised higher from 0.6% to 1.1%
  • U.S. Q1 business investment downgraded from 11.4% to 10.4%
  • U.S. Q1 GDP price index at 1.9% vs. 2.2% consensus
  • U.S. initial jobless claims at 244K vs. 241K forecast, 242K previous
  • Fed official Bullard: Stronger data needed to continue hiking
  • Bullard: Doubts that U.S. inflation is moving close to 2% target

Major Events/Reports

U.S. Q1 GDP revisions

It looks like the consumer sector shored up growth for Uncle Sam once more, as the upgrade in the Q1 final GDP reading was mostly due to higher personal consumption.

The figure was revised higher from 1.2% to 1.4%, still slower than the 2.1% expansion in Q4 but much better than the flash GDP reading of 0.7%. Components of the report revealed that personal consumption was up 1.1% for the period versus the initially reported 0.6% uptick but that business investment was slower at 10.4%.

Meanwhile, the GDP price index came in at 1.9% compared to the earlier 2.2% reading to signal weak inflationary pressures. The release also indicated that the slowdown in growth compared to previous quarters was due to weaker private inventory investment and a slump in government spending.

Fed official Bullard’s remarks

St. Louis Fed President James Bullard highlighted the weakness in inflation during his recent testimony, casting doubt that the FOMC can afford to hike rates one more time before the year ends.

Keep in mind, however, that Bullard isn’t a voting member of the FOMC so his remarks don’t usually carry as much weight. But the lack of other market-moving reports on deck kept traders more attentive to his statements.

He mentioned that the U.S. economy would need to churn out stronger figures from here in order to justify the current pace of tightening. Bullard warned that falling unemployment won’t guarantee higher price levels and even threw shade on forecasts that annual inflation is moving closer to the 2% target.

Oil up, equities down

Black Crack is putting up a strong fight as WTI crude oil closed another day in the green even with several factors weighing it down.

Analysts are attributing the rise to the smaller than expected U.S. inventory buildup reported by the EIA yesterday and a bit of profit-taking at the end of this quarter.

  • WTI crude oil is up to $44.26 per barrel (+0.27%)
  • Brent crude oil is at $47.45 per barrel (-0.19%)

However, U.S. equity indices were unable to enjoy any risk-taking as the tech sector chalked up another round of losses for the day.

  • S&P 500 index is down to 2,420.38 (-0.78%)
  • Dow 30 index is down to 21,313.37 (-0.66%)
  • Nasdaq is down to 5,661.50 (-1.77%)

Major Market Mover(s):

NZD

The Kiwi was lower across the board as traders may be booking profits from the currency’s strong rallies earlier in the month and a bit of risk aversion has kicked in.

NZD/USD slumped to .7295 (-0.15%), NZD/CHF is down from .7007 to .6969 (-50%), NZD/CAD fell from .9524 to .9484 (-0.41%), GBP/NZD popped up to 1.7819 (+0.78%) and NZD/JPY dropped to 81.71 (-0.38%).

JPY

The Japanese currency continued to slide lower against its peers, except against the Greenback.

USD/JPY is down to 112.01 (-0.24%), EUR/JPY is up to 128.17 (+0.34%), GBP/JPY climbed from 145.16 to 146.41 (+0.32%), and AUD/JPY is holding on to the 86.00 handle (+0.30%).

Watch Out For:

  • 12:00 am GMT: U.K. GfK consumer confidence index (-7 expected, -5 previous)
  • 12:30 am GMT: Japanese household spending y/y (-0.7% expected, -1.4% previous)
  • 12:30 am GMT: Japanese national core CPI (0.4% expected, 0.3% previous)
  • 12:30 am GMT: Tokyo core CPI (0.2% expected, 0.1% previous)
  • 12:50 am GMT: Japanese preliminary industrial production (-3.1% expected, +4.0% previous)
  • 2:00 am GMT: Chinese official manufacturing PMI (51.0 expected, 51.2 previous)
  • 2:00 am GMT: Chinese official non-manu PMI (54.5 previous)
  • 2:30 am GMT: Australia’s private sector credit m/m (0.4% expected, 0.4% previous)
  • 6:00 am GMT: Japanese housing starts (-1.1% expected, +1.9% previous)