The US Commerce Department released U.S. GDP figures estimates for the second quarter which showed an annual growth rate of 2.3%, lower than the consensus estimate of 2.7%. However, first quarter GDP was revised up to 0.6% for the quarter in contrast to the previous estimate of -0.2%. The US currency reacted by strengthening, usually a sign the currency markets think higher US rates are more likely, although the bond market reacted differently with Treasurys falling on the day.
ANZ said the figures were “solid” even though the headline number was less than expected and “underlying details were better”. Overall the numbers supported the FOMC’s upbeat tone from earlier in the week and the US central bank is “on course to hike with data still tracking in the right direction.”
