Spreadex Market Update

Muscular Q3 growth fails to move US election-eyeing Dow Jones and dollar



Just as the UK figure did yesterday, the USA’s better than expected third quarter GDP reading was absorbed by the markets with a surprising amount of indifference this afternoon.

Hitting 2.9% at the annualised rate against the 1.4% seen in the second quarter – in other words a 0.7% leap across Q3 – the US GDP figure was the best since this time last year. Yet instead of boosting the dollar (as this substantial growth arguably gives the Fed the green light for a rate rise in December, Clinton win permitting) or the Dow Jones (which could have benefited from the confirmation that the US economy was back on track), the news was treated with barely a shrug.

The Dow struggled to eke out the 20 point increase promised before the open, while the greenback actually weakened slightly against the pound and the euro. Perhaps the US election is casting too long a shadow for the markets to focus on anything but who will end up in the White House (cough*Clinton*cough).

Elsewhere the European indices remained as uninspiring as they were this morning. The FTSE and DAX dropped by 0.3% and 0.5% respectively, while the CAC, lifted by its return to growth in Q3, sat relatively flat just above 4500. As for the pound, it recovered from its more excessive losses against the dollar, but still shed 0.1%, and continued to fall by 0.3% against the euro.

 

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