In a week less pre-occupied with trade disputes and geopolitics, the focus of the week for many bond market observers, investors and economists was the US June quarter GDP figures. The US Commerce Department has now released second quarter (Q2) 2018 “advance” GDP estimates on Friday night Australian time and they indicate the US economy grew at an annualised growth rate of 4.1%. This estimate is the first of four estimates and subject to three more revisions over the next two months.
The growth figure was below the 4.2% median of market estimates but well above than the revised first-quarter figure of 2.2%. NAB Head of FX Strategy, Ray Attrill, said while the figures were only just below expectations, some of the details of the report suggested some third quarter weakness was to be expected. “Consumers and exports led the gains during the quarter, but with soybeans leading the rise in exports and tax cuts behind the consumer, the sense of payback in Q3 (September quarter) took some of the gloss off the impressive numbers.”
