There is no cheering in the financial markets on better than expected 2Q GDP report from US which showed recession in the economy eased quicker than expected. US stocks open nearly flat which commodities recover from earlier knee jerk reactions. Dollar fails to extend post GDP recovery and is back under pressure against most major currencies. After all, there isn't any clear direction in the financial markets in general.

Real GDP in US dropped -1.0% annualized rate in 2Q, better than expected -1.5% and showed significant improvement over 1Q's -5.5% contraction. However, personal consumption expenditures dropped -1.2% annualized rate versus a slightly increase in 1Q, suggesting consumer demand remains weak. Investment was another negative in the GDP report even though the decline of -13.5% was much better than 1Q's -39%. GDP price index rose just 0.2% comparing to expectation of 1.0%. Data from Canada saw GDP dropped more than expected by -0.5% mom in May.

Released earlier, Eurozone CPI dropped more than expected by -0.6% yoy in July comparing to consensus of -0.4%. However, unemployment rate rose slightly from downwardly revised 9.3% to 0.4% in Jun against expectation of 0.7%. Swiss KOF leading indicate also improved more than expected to -0.99 in Jul. Released from UK, Gfk consumer confidence was unchanged at -25 in July.

Data from Japan released overnight were generally negative. CPI inflation dropped more than expected by -1.7% yoy in June, a record low in at least 33 years. Unemployment rate rose more than expected to 5.4% in June, its highest level since June 2003. Household spending rose less than expected by 0.2% yoy in June. Housing starts dropped more than expected by -32.4% yoy in June. Though, Manufacturing PMI is back above 50 at 50.4 in July.

USD/CHF Mid-Day Outlook

 An intraday top is in place at 1.0933 ahead of 1.0938 resistance. USD/CHF's retreat from there is still in progress and intraday bias is mildly on the downside as long as 1.0890 minor resistance holds. But after all, short term outlook remains neutral. On the upside, break of 1.0938 will revive the case that USD/CHF has indeed bottomed at 1.0590 already. In such case, focus will turn to 1.0210 resistance for confirmation. On the downside, below 1.0730 support will indicate that rebound from 1.0622 has completed and will turn outlook bearish for a retest of 1.0590 low.

In the bigger picture, there is no change in the broader view that price actions from 1.2296 are consolidation to whole medium term rise from 0.9634 only, with fall from 1.1963 as the third leg. Above 1.0938 resistance will argue that fall from 1.1963 has completed and break of 1.1021 will solidify the bullish case and pave the way for strong rebound. However, failure at the current level, followed by break of 1.0730 will indicate that whole fall from 1.1963 is still in progress for another low below 1.0366. But after all, downside should be contained by 61.8% projection of 1.1740 to 1.0590 from 1.1021 at 1.0310 and bring reversal.


Economic Indicators Update

GMT Ccy Events Actual Consensus Previous Revised
23:01GBPGfK Consumer Confidence Jul-25-23-25 
23:15JPYManufacturing PMI Jul50.4--48.2 
23:30JPYUnemployment Rate Jun5.40%5.30%5.20% 
23:30JPYHousehold Spending Y/Y Jun0.20%0.30%0.30% 
23:30JPYTokyo CPI Y/Y Jul-1.70%-1.70%-1.30% 
23:30JPYNational CPI Y/Y Jun-1.70%-1.60%-1.10% 
05:00JPYHousing Starts Y/Y Jun-32.40%-30.60%-30.80% 
05:00JPYConstruction Orders Y/Y Jun-28.00%---41.90% 
09:00EUREurozone CPI Estimate Y/Y Jul-0.60%-0.40%-0.10% 
09:00EUREurozone Unemployment Rate Jun9.40%9.70%9.50%9.30%
09:30CHFKOF Leading Indicator Jul-0.99-1.45-1.65-1.49
12:30CADGDP M/M May-0.50%-0.30%-0.10%-0.20%
12:30USDGDP (Annualized) 2Q A-1.00%-1.50%-5.50% 
12:30USDGDP Price Index 2Q A0.20%1.00%2.80% 
12:30USDCore PCE Q/Q 2Q2.00%2.40%1.60% 
12:30USDEmployment Cost Index 2Q0.40%0.30%0.30% 
13:45USDChicago PMI Jul43.44239.9