A positive growth story from the US - BAML

By FXstreet.com | August 04, 2014 AAA

FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained that the better-than-expected 2Q GDP growth and the upward revision for 1Q and 2013 paint a positive growth story for the US.

Key Quotes:

“The 6q moving average of GDP growth rose to 2.4% in 2Q, near the highest level since the recovery began."

"This contrasts sharply with the numbers before the revisions which together with the consensus forecast for 2Q would have placed the 6q moving average of GDP growth at just 1.8%, close to the lowest level in five years”.

“We suspect the new information will go some way to help diminish the prevailing pessimism about the US economy's potential growth rate, especially given the signs of stabilization of the labor participation rate”.

"In our view, 5y rates five years forward (perhaps the closest thing to the market's forecast of potential GDP growth), which are 100bp below where they were at the start of the year, are too low, especially with elevated inflation breakevens. We expect a rise towards 4% over the course of 3Q, with the likely firming of healthcare spending in 2H as well as the growing supply of long-dated Treasuries that the market will have to absorb without help from the Fed or China."

comments powered by Disqus
Related Forex Analysis
  1. AUD/USD Recovery Hopes Fade With Reversal Pattern Lacking Confirmation
    Forex News

    AUD/USD Recovery Hopes Fade With Reversal Pattern Lacking Confirmation

  2. USD/JPY bulls need to take a breath before a new attack at 110.00
    Forex News

    USD/JPY bulls need to take a breath before a new attack at 110.00

  3. Crude Oil Recovers Ahead Of Inventories, Platinum Hits Multi-Year Low
    Forex News

    Crude Oil Recovers Ahead Of Inventories, Platinum Hits Multi-Year Low

  4. GBP/USD nervous below 1.6200, waiting for data
    Forex News

    GBP/USD nervous below 1.6200, waiting for data

  5. Dollar’s Current Bull Leg Strongest since Rally Through Crisis
    Forex News

    Dollar’s Current Bull Leg Strongest since Rally Through Crisis

Trading Center