Growth in the US to have risen with ongoing labor softness and the verdict is to be seen on dollar exchange rates!!!
A new week is in the making dear reader that will uncover to us crucial signs on the state of the U.S economy; while today will be time given to investors to ponder upon the effect of the incoming data to be imposed. Today is only the quiet before the storm as top notch fundamentals are on the queue, as after the sentiment was propped up last week by better then expected home sales data and the governmental attempts to pass the bill to ease jittery markets by supporting the two GSEs, insights will either berate or congratulate the dollar and with GDP expectations I see the latter to be the prevailing probability!
The advanced reading for the second quarter GDP is to be the first to attract all the attention, with still roaming fears over the state of the economy the sentiment remains fragile and easily influenced those days, especially with earnings outlook and the financial sector's performance still weighing much in the back of markets heads. GDP growth is expected with a remarkable rise and as we have seen exports have been favorable and consumption was actually propped up remarkably by the impeccable timing chosen for the rebates to be distributed that supported Americans spending and that is something that for me Bernanke's efforts must be saluted!
Odds for a rate hike to be seen by the Feds in September are on the rise as still the effect of "sooner rather than later" still lingers in the market as Fed members are tilting to a hawkish stance discarding the delicate state of the economy on bias to inflationary effects. How much would strong growth affect that ongoing perception well logically it is to be immense offsetting any weakness to be revealed later through the week by the continuing job loss seen in the economy!
That is to be the other focal concern to markets as July's payroll details are to be revealed through the renowned Labor Report. Unemployment rate is expected with a rise and the monthly change in payrolls is to show more jobs being lost as the economy still battles strong signs of softness. Yet so far once more recession fears are on the balance as again it is thought that the largest economy in the world is to escape the once assured doomed recession to only replace it with sluggish growth which is to be only an era to lay grounds to a very strong comeback.
Still though as we can see GDP growth is to be strong combined with soft labor market and prevailing weakness in the manufacturing sector which is something that markets should question ahead of pricing in the dollar's strength based on soon to be seen rate hikes. Even if some argue that markets are resuming to normal I BEG TO DIFFER!
As long as volatility is still high and markets tend to continue to overrate all incoming data with a new sentiment shaping each day I think that rules out normality and rationality! Oil had much to influence this concept and after seeing a record above $147 trading below $125 a barrel is much of a relief yet did market question here the effect it will bestow on American inflation???
Since domestic inflation still abides with continuing jobs loss and sluggish demand wont the ease swelling in commodities induced inflation once more provide a spare margin for the Feds to withhold steady rates to stimulate the economy??? That is one question markets are discarding and I think they should take into consideration for to me despite hawkish comments heard I think Bernanke was loud and clear when he stressed surprisingly on "significant" risks to growth after calling them to somehow diminished! Ponder upon this thought today dear reader ahead of our fundamental fiesta and do not let the market heat into your head instead you help lead the cattle better than following others lead…
A new week is in the making dear reader that will uncover to us crucial signs on the state of the U.S economy; while today will be time given to investors to ponder upon the effect of the incoming data to be imposed. Today is only the quiet before the storm as top notch fundamentals are on the queue, as after the sentiment was propped up last week by better then expected home sales data and the governmental attempts to pass the bill to ease jittery markets by supporting the two GSEs, insights will either berate or congratulate the dollar and with GDP expectations I see the latter to be the prevailing probability!
The advanced reading for the second quarter GDP is to be the first to attract all the attention, with still roaming fears over the state of the economy the sentiment remains fragile and easily influenced those days, especially with earnings outlook and the financial sector's performance still weighing much in the back of markets heads. GDP growth is expected with a remarkable rise and as we have seen exports have been favorable and consumption was actually propped up remarkably by the impeccable timing chosen for the rebates to be distributed that supported Americans spending and that is something that for me Bernanke's efforts must be saluted!
Odds for a rate hike to be seen by the Feds in September are on the rise as still the effect of "sooner rather than later" still lingers in the market as Fed members are tilting to a hawkish stance discarding the delicate state of the economy on bias to inflationary effects. How much would strong growth affect that ongoing perception well logically it is to be immense offsetting any weakness to be revealed later through the week by the continuing job loss seen in the economy!
That is to be the other focal concern to markets as July's payroll details are to be revealed through the renowned Labor Report. Unemployment rate is expected with a rise and the monthly change in payrolls is to show more jobs being lost as the economy still battles strong signs of softness. Yet so far once more recession fears are on the balance as again it is thought that the largest economy in the world is to escape the once assured doomed recession to only replace it with sluggish growth which is to be only an era to lay grounds to a very strong comeback.
Still though as we can see GDP growth is to be strong combined with soft labor market and prevailing weakness in the manufacturing sector which is something that markets should question ahead of pricing in the dollar's strength based on soon to be seen rate hikes. Even if some argue that markets are resuming to normal I BEG TO DIFFER!
As long as volatility is still high and markets tend to continue to overrate all incoming data with a new sentiment shaping each day I think that rules out normality and rationality! Oil had much to influence this concept and after seeing a record above $147 trading below $125 a barrel is much of a relief yet did market question here the effect it will bestow on American inflation???
Since domestic inflation still abides with continuing jobs loss and sluggish demand wont the ease swelling in commodities induced inflation once more provide a spare margin for the Feds to withhold steady rates to stimulate the economy??? That is one question markets are discarding and I think they should take into consideration for to me despite hawkish comments heard I think Bernanke was loud and clear when he stressed surprisingly on "significant" risks to growth after calling them to somehow diminished! Ponder upon this thought today dear reader ahead of our fundamental fiesta and do not let the market heat into your head instead you help lead the cattle better than following others lead…
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