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• Final Q3 GDP was 3.1% annualized
• Final Q2 reading was +3.0% annualized
• Consumer spending: +4.2% vs +2.8% prior
• Durable goods: vs +7.6% prior
• GDP final sales (excluding inventories): 3.2% vs 3.3% prior
• GDP price index (GDP deflator): 2.2% vs 2.4% expected
• Core PCE (excluding food & energy): 2.5% vs 2.2% prior
• PCE price index: 2.3% vs 1.5% prior
• PCE services excluding energy and housing +3.3% vs +2.7% prior
• Business investment (nonresidential fixed investment): -2.2% vs 4.0% prior

I highlighted the likelihood of a downside miss before the report and that’s what unfolded but it looks like the market was ahead of the consensus. Moreover, there are some cooler indications on the inflation side of this report, which should filter into tomorrow’s PCE report (adding downside risks for the dollar).

Contributors and subtractors:

• Consumption: +2.82% vs +2.48% prior
• Government: +0.42% vs +0.86% prior
• Net International trade: +0.04% vs -0.43% prior
• Inventories: -0.93% vs -0.22% prior

I’ll be curious to see how that government number develops in the next four years.

This article was written by Adam Button at www.forexlive.com.

The consensus on today’s US Q4 GDP report is for 2.6% q/q annualized growth in a slowdown from 3.1% in Q3.

Risks are to the downside.

That’s because yesterday two critical inputs for the report were released and both missed badly. Wholesale inventories were lower by 0.5% after a 0.2% decline in November and the advance goods trade deficit for December was 122B compared to 105B expected.

With those, the consensus on GDP has ticked to 2.6% from 2.7% but most economists don’t adjust their forecasts so late in the game.

To get a sense of how deeply those misses sting, the final Atlanta Fed GDPNow estimate was cut to 2.3% from 3.2%. That number is probably a good indication of where the market is now priced for GDP, though with so many cross-currents in the market, today’s report could still catch many off guard.

At the same time, the bond market appears to have noticed with Treasury yields down 3-6 bps across the board ahead of GDP, which is due at the bottom of the hour.

This article was written by Adam Button at www.forexlive.com.

Headlines:

• ECB set to wrap up the central bank bonanza this month
• Weekly update on interest rate expectations
• The bond market is in focus as yields edge lower
• A clash in month-end FX rebalancing signals this month – Deutsche
• BOJ’s Himino says will raise rates if economy, prices move in line with forecast
• Eurozone January final consumer confidence -14.2 vs -14.2 prelim
• Eurozone Q4 flash GDP +0.0% vs +0.1% q/q expected
• France Q4 preliminary GDP -0.1% vs 0.0% q/q
• Germany Q4 preliminary GDP -0.2% vs -0.1% q/q expected
• Italy Q4 preliminary GDP +0.0% vs +0.1% q/q expected
• Spain January preliminary CPI +3.0% vs +2.9% y/y expected
• Germany December import price index +0.4% vs +0.3% m/m expected
• UK December mortgage approvals 66.53k vs 65.40k expected

Markets:

• JPY leads, EUR lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields down 6.3 bps to 4.492%
• Gold up 0.8% to $2,779.53
• WTI crude down 0.2% to $72.48
• Bitcoin up 1.2% to $104,972

The dollar is keeping more mixed in European morning trade, with little significant headlines to really move markets.

Traders are still digesting the Fed decision from yesterday but all in all, there wasn’t too much to really scrutinise as noted here. USD/JPY is a decent mover on the day, lower by 0.6% to 154.30 but it owes to a drag in bond yields. 10-year Treasury yields are flirting with a drop below 4.50% and that’s keeping pressure on yen pairs today.

Besides that, the dollar is trading mostly little changed or marginally higher against the rest of the major currencies. EUR/USD is down 0.2% to 1.0395 while GBP/USD is down 0.2% to 1.2430. USD/CAD is down 0.1% to 1.4410 while AUD/USD is down 0.1% to 0.6225 currently. The changes across the board aren’t reflective of much as we await US traders to enter the fray.

We did get euro area Q4 GDP data and those reaffirmed poor showings in France and Germany, that led to a stagnation in the Eurozone economy in the final quarter of 2024. It is as anticipated and won’t mess up expectations for the ECB ahead of their policy decision later.

In other markets, equities are keeping steadier after the drop in Wall Street yesterday. European indices are looking to close out the month on a high note while US futures are also sitting higher, hoping to bounce back in this back and forth week.

Elsewhere, we do have gold nudging closer to test its October high near $2,790 while Bitcoin is still floating above $100,000 in search of its next momentum leg over the last week-and-a-half.

This article was written by Justin Low at www.forexlive.com.

Deutsche says that their month-end FX model is hinting at conflicting signals from a relative equity performance versus a seasonal performance standpoint. The firm says that rebalancing flows on the back of relative equity performance suggests mild USD buying against the euro. However, seasonality points towards broad USD selling – in particular on month-end itself and the first trading day of February.

That being said, Deutsche is quick to point out that there are bigger factors in play in markets this week. The whole issue involving Nvidia, DeepSeek, and tech shares in general is something that stands out alongside key earnings releases. We’ll be getting Apple’s earnings later today of course after Meta, Microsoft, and Tesla yesterday.

The Fed was the other key factor but we’ve already gotten over that hump now. From earlier: What’s the takeaway from the Fed yesterday?

This article was written by Justin Low at www.forexlive.com.

• Prior -14.5
• Economic confidence 95.2 vs 94.1 expected
• Prior 93.7
• Industrial confidence -12.9 vs -13.8 expected
• Prior -14.1
• Services confidence 6.6 vs 6.0 expected
• Prior 5.9; revised to 5.7

Slight delay in the release by the source. Euro area economic sentiment edged higher to start the new year with a decent improvement in services sector confidence. While there was also some improvement in manufacturing confidence, it remains highly subdued at the moment. All that being said, the overall outlook remains challenging at best for the Eurozone at the moment – not least with Germany still remaining problematic.

This article was written by Justin Low at www.forexlive.com.

• Prior +0.4%
• GDP Q4 Y/Y +0.9% vs +1.0% expected
• Prior +0.9%

Among the Member States for which data are available for the fourth quarter of 2024, Portugal (+1.5%) recorded the highest increase compared to the previous quarter, followed by Lithuania (+0.9%) and Spain (+0.8%). Declines were recorded in Ireland (-1.3%), Germany (-0.2%) and France (-0.1%). The year on year growth rates were positive for nine countries and negative for three.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior 6.3%; revised to 6.2%

It is a slight increase in the jobless rate to wrap up the year but still lower than where it was in January at least i.e. 6.5%.

This article was written by Justin Low at www.forexlive.com.

• Prior 65.72k
• Net consumer credit £1.0 billion
• Prior £0.9 billion

Net borrowing of mortgage debt by individuals rose to £3.6 billion in December, up by £1.0 billion following a decrease in net borrowing of £0.9 billion in November. Of note, the annual growth rate for net mortgage lending was seen up by 1.5% to end the year, up from 1.3% in the month before. That marks a continuation in the upward trend stretching back to April last year.

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 31/1/2025 first appeared on IC Markets | Official Blog.

After the FOMC meeting decision yesterday, 10-year yields in the US raced to a high of 4.59% but that didn’t last long. We’re now seeing yields fall back quickly to under 4.51% again. And that is starting to invite a test of a key neckline on the chart, as seen above.

Bonds were offered quite strongly to start the year as broader markets were fearing Trump’s policies ahead of his inauguration. But with tariff fears receding, we are starting to see things turn around a fair bit.

I’d be watching the neckline near 4.50% quite closely as we look to end the week. Even without any major headlines to impact the narrative, a technical breakdown here could offer traders something to work with in the meantime.

In turn, this will also have a say in how USD/JPY plays out with the pair still toying with a potential break below 155.00 this week.

The drop fell under the figure level earlier in the week but rebounded as Trump floated tariffs again on Tuesday here. The bounce coincided with a rebound off the 50.0 Fib retracement level at 153.75, so that will still be a key technical support level to watch out for before the week ends.

This article was written by Justin Low at www.forexlive.com.

• Prior +0.0%
• GDP Y/Y +0.5% vs +0.6% y/y expected
• Prior +0.4%

The quarter on quarter change is the result of a decrease of value added
in both agriculture, forestry and fishing and in services, whereas the
contribution of industry is positive. From the demand side, there is a
negative contribution by the domestic component (gross of change in
inventories) and a positive one by the net export component.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior +0.1%

As a whole last year, the German economy is estimated to have contracted by 0.2%. That follows from the 0.1% contraction in 2023. And if this continues in 2025, it will mark the first time since the reunification in 1990 that Germany suffers three straight years of declining GDP.

This article was written by Justin Low at www.forexlive.com.