After Wednesdays data left dollar bulls a little dejected, the market was ready for a pick-me-up. Though, what traders received were modest improvements from the final GDP calculation and weekly jobless claims not the sort of indicators that trigger momentum without a serious surprise.
Accordingly, EURUSD spent most of the Asian and European sessions climbing slowly off of a 1.33 swing low before dropping 40 points off of 1.3355 on the greenback news. After the US news hit the wires, USDCHF widened its strict 1.2135 1.2180 range by 10 points to 1.2190 on the topside. Against the pound, the dollar advanced a mere 35 points after putting spending most of the early hours bouncing off of 1.9660 resistance. Finally, USDJPY blazed its own path as the market looked to take back the yens outsized gains from yesterday. The pair made one last spike lower in the early Asian session at 116.65 before setting off on a steady advance to 117.95.
In a big picture sort of perspective, todays economic indicators offered insight on two of the markets top areas of interest: growth and employment. However, traders were not as enthusiastic about the data as that. The principal release for the session was the final measurement of fourth quarter economic growth. As is typical, economists expected the final revision to match the first one with a 2.2 percent annual growth rate. Perhaps the modest outlook caught traders off guard; but when the actual print hit the wires higher at 2.5 percent, the dollar found a bid. From the breakdown in the component data, the improvements and declines came where the market would have expected. Both business investment and the housing market slowed in the fourth quarter than economists had originally though. Capital investment, which was a considerable contributor to growth in previous quarters, slipped 9.1 percent in the final three months of the year compared to the 8.5 percent contraction reported last month. A hot topic in recent weeks, residential investment was revised down from a 19.1 to 19.8 percent drop. Supplying the buoyancy the headline reported, exports were revised 0.1 percentage point higher while inventories received a hearty boost in a recount that lifted the tap from $17.3 billion to $22.4 billion. Despite the unexpected modification to headline growth though, the markets interest was rather limited. The 0.3 percentage point difference is not a considerable change compared to original revision from 3.5 percent pace of growth printed in the advance report to 2.2 percent.
Elsewhere in the news, the market was already fleshing out the official and unofficial consensuses for next weeks non-farm payrolls. First thing in the morning, the government reported a drop in initial jobless claims to 308,000. Initially, economists had collectively projected an increase to 320,000; but instead received the lowest print since early January. However, like the growth report, the employment number was not a market mover on its own. While first-time claims have hit a considerable low, it does not necessary mean businesses are picking up their hiring practices; rather fewer people are being laid off. Another add-in for NFP speculation was the Conference Boards Help Wanted Index for February. A lagging indicator, the measure of print ads slipped as expected to a read of 31 last month. In the span of a few months, the gauge has fallen considerably from 39 only a year before.
US equities felt out a modest relief rally in the opening hours of trade on Thursday after the GDP revision lifted investors growth and revenue outlooks. By 15:35 GMT, the S&P 500 paced the pack with a 0.47 percent climb to 1,423.85. The Dow Jones Industrial Average was in the midst of a 0.44 percent advance to 12,354.19 while the NASDAQ Composite marked a distant third with a 0.11 percent move to 2,419.81. Searching out a few of the leading market movers from the broad indices, it was obvious that both big and small caps were pushing the market. Financial giant Citigroup saw its shares rise 1.1 percent to $51.53 after reporting plans to double its branch presence in China in 2007. Conversely, mobile phone parts maker RF Micro Devices lowered its first quarter revenue and earnings outlooks due to slow demand from a major but unnamed client. Shares of RF plunged $0.72 or 10.2 percent to $6.36 on the news.
Treasuries were little swayed by the modest adjustment to GDP. The ten-year note was trading 3/32nds lower at 99-30 by 15:35 GMT after its yield added a basis point to 4.632. Bonds moved only 1/32nds lower to 98-22 as yields held steady at 4.833.