Yesterday the US economic docket provided some unexpected headwinds with actual figures disappointingly worse than expected. The third reading for annualized Q/Q GDP was out significantly lower at -2.9% compared to a previously stated -1.0% and expectations of a -1.8%. In May US durable goods orders shrank by 1% swinging from a +0.8% in the previous month. Even personal consumption was revised lower to 1%. In contrast June preliminary reading for the health of the services sector was positive up to 61.2 from a previous 58.1.

Major US equities turned into positive territory bouncing back after recent declines as investors looked past the final 1Q GDP reading and opting to take the cue from the services sector optimism. The US Dollar was seen weakening across the board as the US GDP data hit the wires but was seen consolidating by the time the services sector data hit the wires around 1 hour 15 minutes later.

EUR/USD hit highs of 1.3651, an approximate 50-pt rally from where it was prior to the data; support for the Yen peaked when the USD/JPY hit session lows of 101.62. Even gold surprised higher as the USD weakened despite technical studies were suggesting a continuation lower could be in the cards – finally this did not materialize and the precious metal rose to $1324.85 for the day.

Asia took the positive cue from their US counterparts this morning; we see that major equity indices are indeed in positive territory. Support amongst the major currencies was mostly visible for the New Zealand Dollar this morning, with the Kiwi attracting most support so far today. NZDUSD is pushing higher again towards August ’11 highs of 0.8843 as it is currently making 0.8776 as it takes the cue from the mixed data out of the US and interest rate differentials.

Good Day,