The market had been gearing itself for a rather soft GDP number tomorrow but today’s economic data suggests that we were getting a little overly pessimistic.
The current account deficit did widen appreciably but net exports had less of a negative impact on GDP than had been anticipated and the latest housing data showed a much larger rise in building approvals than had been expected (+9.3% against +1.5%). All of this augurs well for tomorrows GDP number.
We should see some short-term bears taking risk off the table ahead of tomorrow’s number but we can also expect any decent rallies to meet grateful selling from longer-term bulls. Ergo, volatility should be guaranteed.
