GDP

The textbook definition of a recession is 2 quarters of negative growth. However, many economists don’t abide by that rule.

A quiet start to the new trading week as U.S stock markets closed mixed ahead of this week's FOMC and Q2 GDP data and earnings reports from U.S Mega Tech companies.

As the release of the final partials yesterday warned, Australian Q1 2022 Australian GDP has beaten expectations, rising by a solid 0.8% QoQ and 3.3% YoY, despite the impact of Omicron and the devastating rains and floods that hit the East Coast.

Just one week before the highly anticipated June RBA Board meeting, Australian Q1 2022 GDP is set to drop this Wednesday.

GBP/USD falls as stagflation fears rise. CAC rallies after the first round of the French elections.

As is often the case, Thursdays New Zealand's quarterly GDP release follows hot on the heels of the FOMC meeting and a few hours before Australia's monthly jobs data, likely making for a volatile session in Asia.

Hopes that growth in Australia would rebound in Q1 were easily met, with GDP rising 3.4% q/q compared to 3.0% expected.

An appetite for FX safe havens overnight led to JPY and CHF outperformance. Despite being a risky currency, the AUDUSD wasn’t far behind, finishing 0.5% higher at .7265.

Australian Q3 GDP fell by -1.9%, significantly beating market expectations for a -2.7% fall. The fall is the first quarter of negative growth since the 6.8% fall recorded in the June Quarter of 2020 and means the Australian economy is once again smaller than where it was pre the onset of the pandemic.

Headlines on Friday that new cases of the Omicron variant had been detected in Hong Kong, enough to see the already teetering ASX200 fall 128 points, locking in a 1.6% loss on the week.

The Advanced look at Q3 GDP for the US was only 2% vs 6.7% in Q2

Although GDP is a great economic data point for headlines, it isn’t a great “trading” number

With a slightly hawkish FOMC meeting out of the way, we’re watching Asian equities as we suspect a corrective bounce is now on the cards.

Following the large beat by the ADP employment report last Thursday night, Fridays Non-Farm Payrolls data was rapidly elevated to the status of the most important economic number since the pandemic due to its ability to provide a more concrete timetable for tapering.

The pound is holding onto gains ahead of UK’s data dump at 7:00 BST, whilst the dollar corrects higher ahead of today’s inflation report.

Never underestimated the power of the American consumer.