United States GDP Growth at 2-Year High

News Event

From Trading Economics: The United States economy expanded an annualized 2.9 percent in the third quarter of 2016, more than 1.4 percent in the previous quarter and beating market expectations of a 2.5 percent rise, the advance estimate from BEA showed. The increase in real GDP reflected positive contributions from personal consumption expenditures, exports, private inventory investment, federal government spending, and nonresidential fixed investment that were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports increased.

Market Closing Wrap

In European Equity Markets, weak corporate results weighed on European stocks on Friday, while choppy trading in banking shares took away some of the sector's recent gains. Earnings disappointments from the likes of Novo Nordisk soured the mood, with the stock down 15 percent. BNP rose 0.9 percent after the French bank said it was planning more cost savings to offset the squeeze on revenue from low-interest rates and may consider raising the proportion of earnings it pays out in dividends. Satellite firm Eutelsat rose 7.3 percent after results that showed a steady start to the year. Elsewhere, shares in digital security firm Gemalto fell 7 percent after a worse-than-expected outlook for 2017.

In Currency Markets the U.S. dollar fell from a three-month high against the yen and fell against the euro on Friday after federal government data showing a deceleration in U.S. consumer spending in the third quarter overshadowed a stronger-than-expected overall economic growth reading. The dollar was last down 0.09 percent against the yen at 105.18 yen. It touched a session low of 105.06 yen after briefly hitting a three-month high of 105.50 yen shortly after the U.S. GDP data. The euro was last up 0.35 percent against the dollar at $1.0932. Sterling was up 0.12 percent at $1.2177. The dollar index was last down 0.18 percent at 98.706.

In Commodities Markets  oil prices fell below $50 on Friday, on track for their biggest weekly loss in six weeks, on doubts about OPEC's planned output cut and ahead of U.S. rig count data that has steadily increased in the last few months. Brent crude futures were down 48 cents at $49.99 a barrel. The contract had hit a session low of $49.89. U.S. West Texas Intermediate crude was down 52 cents at $49.20 a barrel after hitting a low of $49.10.  Spot gold was up 0.3 percent to $1,271.90 an ounce and is up 0.5 percent this week. In other precious metals, silver gained 0.8 percent to $17.83 an ounce and platinum rose 1.4 percent to $978. Palladium rose 1 percent to $616, having earlier touched a 16-week low of $608.47.

In US Equity Markets stocks  rose on Friday as robust economic data shone light on the strength of the U.S. economy, while upbeat results from Alphabet and Chevron offset the decline in health stocks and Amazon. The S&P 500 was up 0.28 percent, at 2,138.97 and the Nasdaq Composite was up 0.19 percent, at 5,225.76. Alphabet's 2.5 percent rise and Chevron's 3.7 percent jump on upbeat earnings buoyed sentiment. Amgen fell 9.2 percent after the world's largest biotechnology company reported sales for its flagship drug that disappointed investors and analysts. Mastercard touched a record high of $107.50 after the world's second-biggest payments processor reported a 21.2 percent jump in quarterly profit.

In Bond Markets  U.S. Treasury yields climbed to five-month peaks on Friday, helped by gains in German and British bonds as well as data showing the world's largest economy grew at a faster pace than expected in the third quarter, suggesting U.S. interest rates will most likely rise in December. Benchmark 10-year Treasury notes were down 2/32 in price to yield 1.852 percent, up from 1.843 percent late on Thursday. U.S. 30-year bonds were 6/32 down in price to yield 2.612 percent, up from Thursday's 2.602 percent. Germany's 10-year bund yield earlier rose to 0.219 percent, its highest since early May.

Source: Institute of Trading and Portfolio Management