Curve Daily Commentary, April 30, 2015

Another GDP Print Disappoints


While all the focus was on the FOMC’s statement in the early hours this morning, another poor Q1 GDP figure, this time from the US, caught the market off guard. Following in the footsteps of a weak print in the UK, growth in the US grew a mere 0.05% or an annualised pace of 0.2%, well short of the 1.0% annualised rate that the market was expecting. 

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The disappointing growth outcome shouldn’t have too much of an impact on the FOMC’s outlook for interest rates and the broader economy as they have already flagged that they expected soft growth outcome for the winter month. They also expect that the slow down will be transitory, with growth expected to pick up over the months ahead. The data so far for the second quarter has been short of expectations suggesting that the pick up that the FOMC is expecting is not yet underway. Should this slowing prove more enduring than expected, then expectations for the FOMC’s first rate move could be pushed out to 2016. 


The data hit the USD yet again as its steady slide continued. The AUD, after outperforming the previous session, largely treaded water around the 0.80 mark. The AUD appeared to be tempered by a pull back in the price of iron ore, with the two moving in sync recently. 


Local data resumes today with import/export prices along with the latest credit aggregates from the RBA both due out.