Surprise US GDP gain props up Wall Street Surprise US GDP gain props up Wall Street Surprise US GDP gain props up Wall Street

Surprise US GDP gain props up Wall Street

Michael O’Neill

FX Trader,

Wall Street is being propped up by this morning’s upside surprise in Q2 GDP. The Bureau of Economics reported that Q2 GDP rose 4.2% (forecast 4.0%) They attributed the upward revision to “nonresidential fixed investment and private inventory investment that were partly offset by a downward revision to personal consumption expenditures (PCE).”

Wall Street was mostly in positive territory as the GDP data supports the strong US growth narrative. Traders appear to be a tad cautious after the recent gains and ahead of US PCE data on Thursday and because of the uncertainty of global trade. US Treasury yields are little changed.

FX traders are jockeying for position. The US dollar opened in New York relatively unchanged against the majors except against EUR and AUD. The better than expected Q2 GDP numbers undermined the commodity currency bloc led by a drop in AUDUSD. EURUSD bounced and cracked 1.1700 when the Deputy Prime Minister of Italy Luigi Di Maio denied reports that Italy asked the ECB for help. GBPUSD added to earlier gains after talk that the Brexit negotiations would extend into November.

USDCAD is still in the limelight. A Toronto Globe and Mail article released during the Tokyo session said Canada would make concessions on dairy to seal a trade deal with the US. The USDCAD retreat seen in Asia and Europe has been completely reversed on profit-taking in the run-up to the 1400 GMT option expiry time. The prospect of large USDCAD selling for month-end portfolio rebalancing combined with a Canada/US trade agreement by Friday will send USDCAD plunging to 1.2500.

The US dollar index is in an uptrend while prices are above the 94.50-60 area, which if it holds suggests recent EURUSD gains may be fleeting. However, until there is a decisive break above 97.00, FX markets will continue to consolidate within their current ranges.
US dollar index
US Dollar Index (source: Saxo Bank)


The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.