Summary:

  • 2Q 2018 US GDP growth reaches 4.1% YoY

  • July’s UoM consumer sentiment revised to 97.9 pts

  • Earnings push US indices lower

  • AUD outperforms other majors while SEK falls short of its peers

  • Gold and silver benefit from the USD weakening in the second part of a day

Major stock indices from Europe finished Friday’s trading in green marking the fifth consecutive session of gains. Similar optimism cannot be seen on Wall Street where earnings report drag major benchmarks lower. SEK prevails as the worst performing G10 currency of the day while AUD advance to the position of a leader. Oil is trading mixed with Brent moving flat and WTI pulling back. Gold and silver reverse early drop on the back of USD weakening resulting from the GDP miss. The upcoming week looks promising as FOMC and BoE are scheduled to make their interest rate decision.

In the early afternoon the US GDP report for the second quarter of the year was released and it could named downbeat after the headline measure missed the estimates. In turn we saw USD sink against most of its peers. However, 90 minutes later the final UoM consumer sentiment reading for July saw daylight and it has let USD bulls catch a breath for a while.

Median estimate of economists surveyed by Bloomberg agency suggested that the US economy grew at the pace of 4.2% YoY in the second quarter of the year. The actual reading missed this forecast by coming in at 4.1% YoY. However, this is still significantly higher than 3% YoY we saw in the second quarter of 2017. It was the fastest quarterly GDP growth in YoY terms since third quarter of 2014.

Firstly, let’s mention Mastercard’s CEO as he criticized virtual currencies. Ajay Banga named cryptocurrencies “junk” due to their high volatility and degree of anonymity they present. While Banja may be an opponent of virtual currencies it should be noted that his company explores the potential of the blockchain technology.

The Friday’s session across the currency market has been passing quite calmly so far without any sudden moves. Either way, over the recent days major attention has been paid to the Japanese central bank which is going to meet as soon as next week. Let us recall that market participants were offered rumours on the last Friday that the BoJ could tweak its monetary policy.

The Bank clearly communicated that nobody should expect any interest rates hikes until the end of the summer next year. When asked about some misinterpretations of the June’s statements Draghi said that the only version of each statement the Governing Council agrees on is the English version. Having these words in mind one may conclude that the June’s statement was quite unequivocal.