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GDP does not surprise

Published June 6, 2019

Author: Rhys Miles

Not surprisingly our GDP data yesterday was on the lower side of expectations at an annualised growth rate of 1.80%, the slowest since the GFC. Within the data, Private Consumption was the concern reflecting a trend where consumers are either saving or withholding monies to meet the day to day outgoings such as utilities and health insurance the escalating costs of which show no signs of slowing down. With the shadow of an ever worsening trade war and a slowing global economy some of the market speculation of two more cuts may not be far off the mark.

Mixed signals from Trump and his trade advisor gave a glimmer of hope that the Mexican tariff war may not eventuate helped the Dow for a second consecutive night with a rally of 0.80%. Equities are of course supported by increasing speculation that the US will cut rates sooner rather than later. The US Beige book reported that the US economy continues to expand but at a modest pace overall from April to May. Additionally overnight US non-manufacturing data surprisingly improved.

Not too much on the data front today with our Trade balance at 11.30am and overnight the European Central Bank decision on interest rates.

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