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US GDP Beat Sends US 10yr Yields to Three Month Highs

US GDP Beat Sends US 10yr Yields to Three Month Highs

Gregory Marks,

Talking Points:

-GDP Annualized (QoQ) (3Q S) comes in better than expected at 3.6% vs. 3.1% surveyed and 2.8% prior

-GDP Price Index (3Q S) beats at 2.0% vs. 1.9% surveyed and prior

-Initial Jobless Claims (NOV 30) better than expected at 298K vs. 320 expected and 321K prior revised

-Personal Consumption (3Q S) comes in at 1.4%, slightly below 1.5% expectations

U.S. GDP figures for the third quarter annualized beat market expectations of 3.1% to come in at 3.6%. Although Personal Consumption missed expectations by a tenth of a percent, the massive beat in GDP figures in addition to better than expected Initial Jobless Claims boosted the greenback and sent U.S. 10yr yields to three month highs. Currently above 2.85%, we have not seen these yields on the 10yrs since mid September.

Dow Jones FXCM USDollar Index (5-Minute Chart)

US_GDP_Beat_Sends_US_10yr_Yields_to_Three_Month_Highs_body_Picture_2.png, US GDP Beat Sends US 10yr Yields to Three Month Highs

Source: FXCM Marketscope

Strength in the USDollar was short lived despite the strong data and the Dow Jones FXCM USDollar Index retraced gains before the top of the hour. Market participants may be waiting for tomorrow’s non-farm payroll print in order to get final confirmation before the week is out in regards to the strength of U.S. data. If we see a beat in non-farm payrolls on Friday, market participants may continue to sell Treasuries and buy Dollars ahead of the Fed’s December FOMC meeting and rate decision.

US_GDP_Beat_Sends_US_10yr_Yields_to_Three_Month_Highs_body_Picture_1.png, US GDP Beat Sends US 10yr Yields to Three Month Highs

Gregory Marks, DailyFX Research Team

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