U.S. GDP data

• GDP (q/q) (Q1), fact 3.2%, forecast 2.0%.
• GDP deflator (q/q) (Q1), fact 0.6%, forecast 1.3%.

Data on the US GDP for the first quarter exceeded all market expectations, showing significant growth in the US economy and indicating a slowdown in the downward trend, which was traced since September 2018. But the GDP deflator slowed down to the minimum values ​​of 2016, pointing to a slowdown in the US inflation, which was the main risk factor for the development of the US economy.

Fig. 1. U.S. GDP deflator (q/q)

The US dollar index reacted to ambiguous data by updating the high at 98.30, but after weakening on the risks of slowing inflation and returned to the established side range. It is also worth noting that a further reduction of the American dollar is possible for correction, but will be limited to very positive data on GDP growth. Thus, the decline in the US dollar index is limited to support levels: 98.00 and 97.80.

Fig. 2. The US dollar index chart. The current price is 98.00 (10-year government bonds yield is the blue line)

Read also: “Getting rich is easy, but try to stay rich.”

Hanzenko Anton

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