GDP from the USD shocked the market
23 December 2022
It was a weird day yesterday. The Macro calendar supposes not to disturb normal trading. The only important data was the GDP from the US but it was the final number, which is usually in line with expectations. This time it was different. Instead of the 2.9% rise, we got 3.2%, which is a huge beat. Indices went nuts. Nasdaq lost 2.5%, SP500 1.4 and Dax finished 1.3% lower. And this is after a bounce as, during the session, indices were much lower than that.
It is not the first time that great data has had a bad influence on stocks. In this case, markets got scared that splendid GDP will cause FED to keep its hawkish stance for longer. Well, do not ask me if that makes sense as 70% of trading is human psychology, not logic. Today, stock traders try to shrug off yesterday’s bad session and so far, their success is limited but is present. DAX is currently 0.5% higher while SP500 futures are up 0.35%.
The calendar today already gave us interesting data, which was the CPI in Japan, which came to 3.7%. This is the highest in…40 years! It is also higher than the BoJ target of 2%. That increases the speculation about a possible intervention from BoJ. Until recently, BoJ was like a hibernated Godzilla but this may change rapidly delivering some extraordinary volatility on the Yen.
Later in the day, we will get the GDP data from Canada but it is hard to imagine that it would spark a huge reaction like yesterday.
Friday seems great for the Oil, which is currently trading 2% higher. It is also decent for the precious metals as Silver climbs 1.5% higher, while Gold is up 0.6%. It is partially influenced by the weaker USD, which is the second weakest currency right now, right after the Japanese Yen. Rises in commodities are positive for commodities currencies like AUD or CAD, which are up 0.5% and 0.3% respectively.
I will use this opportunity to wish everybody a Happy Christmas! I hope that market will give you some nice gifts that you deserve.