OctaFX | OctaFX Forex Broker
Open trading account

Forex Flash: US growth rebound likely to be temporary - Nomura

FXstreet.com (Barcelona) - Nomura economist Charles St-Arnaud believes that the US growth rebound looks likely to be temporary.

He begins by noting that monthly GDP increased by 0.2% MoM in January, higher than expectations, and follows a decline of 0.2% in December. Further, he adds that the goods-producing side of the economy increased 0.4% on the month, with big rises in manufacturing (+1.2% m-o-m) and mining, quarrying, and oil and gas extraction (+1.2% m-o-m), while there was a decline in agriculture (-0.3% m-o-m) and construction (-0.1% m-o-m).

Additionally, the rebound in the manufacturing sector follows a sharp fall (-1.9% m-o-m) in December. The service sector increased by 0.2% m-o-m coming from a rebound in wholesale trade (+0.7% m-o-m) and arts, entertainment and recreation (+4.1% m-o-m) and some robust growth in real estate (+0.3% m-o-m), education (+0.3% m-o-m) and accommodation and food services (+0.8% m-o-m). However, there were some declines in transport (-0.2% m-o-m), finance and insurance (-0.1% m-o-m) and professional, scientific and technical services (-0.2% m-o-m).

Overall, St-Arnaud notes that while growth was stronger than expected in January, the details suggest that it could be short lived. He writes, “Roughly two-thirds of the growth over the month can be attributed to the rebound in manufacturing and wholesale, suggesting that the underlying strength of the economy is weaker than indicated by the headline number. Moreover, with these corrections out of the way, growth will likely be weaker in February, because of the weak momentum in the data. We continue to expect that growth in Q1 will be around 1.5% q-o-q ar.”

Forex Flash: 10-year US treasuries point lower in near-term – RBS

The market continues to see a 1.72% to 2.15% range in 10-year US treasuries, perhaps persisting through Q2. According to the RBS Research Team, “Key resistance remains 2.15% in 10-years while near-term support is 1.83% - our bias remains to modestly lower yields in the near-term because positioning is favorable (short) and medium-term charts are turning bullish for the first time since early December.”
Read more Previous

Forex: USD/CHF setting new lows at 0.9470/77

The USD/CHF downside has continued during American trading today as the pair finds itself under siege from a risk-on movement Thursday. At the time of writing the pair is now establishing fresh session lows at 0.9470/77, down a staunch -0.68% off its opening.
Read more Next
Start livechat