Today, advanced GDP data for the 1Q showed that US economic growth slowed more than expected in Q1, with GDP increasing at a 1.1% annual rate, down from 2.6% in the previous quarter. Economists had predicted a 2.0% growth rate.

The slowdown was primarily due to a downturn in private inventories (subtracted 2.26% from the number) and nonresidential fixed investment, though consumer spending saw an uptick. The Core PCE was also troublesome as it rose a greater than expected at 4.9% versus 4.4% last quarter.

Also showing strength was initial jobless claims which came in at 230 K versus 248K estimate. The jobs picture remains solid.

US yields rose following the data releases.

Looking at current levels:

  • 2 year yield 4.076% up 15.2 basis points
  • 5 year yield 3.594% up 13.0 basis points
  • 10 year yield 3.5 to 6% +9.6 basis points
  • 30 year yield 3.755% +6.6 basis points

Although yields are higher they still holding onto most of the declines since early March.The Federal Reserve meets next week, with expectations for another 25 basis point hike. The data did not change that assessment. Tomorrow, more inflation data will come out with in the form of month-to-month PCE, and the employment cost index for the Q1 (estimate 1.1% versus 1.0% last quarter).

In the US stock market today, the major indices were influenced by better earnings from Meta (and others including Microsoft this week). Dow Jones Industrial Average experienced its largest one-day gain since January 6, rallying 1.6% or 524 points. The S&P index rose 1.96% its largest gain since January 2023. The NASDAQ index led the gains with a 2.43% advance, which was the largest gain since March 16 when shares rose 2.48%. Meta's shares increased by 13.93%. Microsoft shares increased by 3.2%.

Amazon announced earnings after the close and beat on the top and bottom line. Shares are trading up 8.25% in after-hours trading.

Forex
The strongest to the weakest of the major currencies

In the US dollar, the NZD and AUD were the strongest of the major currencies as buyers entered after recent declines. The AUDUSD moved close to a swing area high near 0.65847 yesterday. Buyers need against the level and cracked the pair higher in training today.

AUDUSD
AUDUSD found early buyers against the high of a swing area

For the NZDUSD, looking at the hourly chart below, it bottomed and moved away from a lower swing area between 0.6119 and 0.61266. However, it also found willing sellers near the 200 day moving average up at 0.6159 level. Buyers and sellers are battling between those technical levels going into the new trading day.

NZDUSD
NZDUSD battles between support and resistance levels

The strongest of the major currencies is the CHF.

The USDCHF moved above a swing area between 0.8953 and 0.8959 on its way to a high at 0.89759. However momentum could not be sustained, and when price started to move back below the 0.8953 level, buyers turned to sellers pushing the price back toward its 200 hour moving average at 0.89339 (green line in the chart below). Support buyers came in against that key MA level. That MA level (it also responds with the underside of the broken trendline) will be a key barometer going into the new trading day for both buyers and sellers.

USDCHF
USDCHF falls back to the 200 hour moving average

In other markets as the day comes to a close and shows:

  • The energy sector rebounded from recent losses as oil prices stabilized. Investor attention is likely to shift towards quarterly results from major oil companies such as Exxon Mobil and Chevron, scheduled to be released on Friday.
  • Spot gold is trading down $2.11 or -0.11% at $1987.60
  • Silver is trading up $0.07 or 0.28% at $24.95
  • Bitcoin rebounded 24 hours after a sharp fall which is all the the digital currency move down to a low of $27,242. The current price is trading up at $29,682

Thank you for your support. Good fortune with your trading.