Comments on US Economic Data

Comments on US Economic Data

The US advance GDP q/q data has brought an end to good news for Donald Trump. The number confirms that the economy is not that hot and core durable orders good order m/m data have rubber stamped that. The massive rally in the dollar which we have experienced since last year will be a major focus however, traders would like to see more than one economic number to see a trend before they change their stance.

They are not just ready to form a bearish opinion for the dollar because the Fed still wants to increase the interest rate. Moreover, the market was expecting last quarter’s growth to be a little weak but the number released was much disappointing. You can blame largely the slow in the GDP growth due to export numbers and somewhat to consumer spending.

On the other hand, the precious metal is still not that much popular but you have to question how Donald Trump is going to bring the country’s GDP to 4%. This is just another reason that the shining metal in the long term could still be attractive investment.

Investors over in the UK are very much tuned towards the upcoming conference between Theresa May and Donald Trump. The meeting is very important for both individuals because they are labelled as anti-free trade and driving the engine of populism and protectionism.

Trump needs to assure the market that he is capable of making good deals, not just adding noise to the current song which is currently playing. So far, he has shown that he is good in cutting ties with other governments and firms if they do not work according to his plan. He needs to assure the world that cutting ties has the benefit of making good deals. We think this is what could be the outcome of this conference.

Theresa May has already softened her stance towards Russia as she knows that trump administration has extended their hand of friendship towards Russia and they could be willing together. She does not want to be on the wrong side, if she wants to make deals with the president of the US who has tweets very much like a CEO of the firm rather than the president of the country. 30 day notice period to countries who are not willing to make better deals with the US very much confirms that he is a true business person

Naeem Aslam
Chief Market Analyst
Think Markets UK Ltd

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