Summary:
- US economy expands more than expected in Q2
- Private consumption sees a robust rebound from the lacklustre first quarter
- US dollar moves higher along with bond yields
The US economy grew 2.1% QoQ in annualized terms in the three months through June, according to the first GDP reading. That was above the market consensus pointing to a 1.8% increase. What could be a reassuring sign is the fact that private consumption jumped as much as 4.3%, quite easily exceeding expectations calling for a bounce to 4%. On top of that, we were offered an upward revision to the prior quarter to 1.1% from 0.9%. It does not look like the US economy is going to any economic downturn, hence a rate cut expected by market participants next week seems to be yet more ridiculous.
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The US dollar jumps a bit higher on the solid GDP prints along with the 10Y bond yield spiking almost 3 bps toward 2.1%. Source: xStation5
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