North American Summary and Highlights 30 April

North American session

Q1 US GDP fell by 0.3% annualized, not far from downgraded consensus expectations, with an above consensus 3.5% rise in the core PCE price index. The strength of Q1 core PCE prices was later shown to come from an upward revision to February. March was unchanged, weaker than expected. March pending home sales showed an unexpectedly strong rise of 6.1%. 

The UST curve steepened and equities struggled, though equities came off their lows after the March core PCE price data. USD moves were modest, with some gains after the GDP report that corrected after the March core PCE data. USD/JPY was slightly firmer near 142.85 and EUR/USD slightly weaker near 1.1340.  

AUD/USD however was marginally firmer edging above .64 while USD/CAD moved below 1.38 after earlier rising to 1.3850 on a 0.2% decline in Canadian February GDP. Trump expressed optimism over relations with Canada. Less significantly, Bank of Canada minutes from April 16 showed that a 25bps easing was considered, before reaching a consensus to leave rates unchanged. 

European morning session 

The USD was generally stronger through the European morning, gaining around 15 pips against the EUR to 1.1365 and half a figure on USD/JPY, which traded up above 143. The EUR gained some ground on the crosses, helped by stronger than expected Eurozone Q1 GDP data, which rose 0.4% q/q against a market consensus of a 0.2% gain. Other data included provisional French, Italian and German state CPI data, all of which was broadly in line with consensus, showing a small decline in the y/y rate in April. German retail sales numbers for March were also close to consensus, showing a broadly flat trend.