- US Q4 GDP Matches Expectations of 4%
- US Economy Contracts For the First Time Since 2009, As Expected
BOTTOM LINE: The first look at US GDP in Q4 saw an increase of 4%, printing in line with expectations. However, while adding to the record mechanical increase in Q3, this was not enough to offset the 3.5% contraction for 2020. Therefore, marking the first time GDP has shrunk since 2009, when the US economy contracted by 2.5%. That said, while 2020 will be recorded as the worst year since 1946, with a vaccine rollout taking place accompanied by significant monetary and fiscal stimulus throughout the year, the outlook remains bright.
MARKET RESPONSE: The initial reaction had been muted with the data printing in line with expectations. However, at the time of writing the US Dollar has dipped slightly, while a notable bid has gone through the precious metals market with gold rise $15 to $1856, while silver has jumped from $25.30 to $26.15. I do not attribute this move to the US GDP report, but I am cognisant of the fact that we are approaching month-end and thus volatility across asset classes are likely to pick-up, particularly around the London fix. For more on the London fix, have a look at our trading guide.
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