Thursday holds the key to the US GDP release

Thursday holds the key to the U.S. GDP release

The Bureau of Economics Analysis will release its quarterly updated report on the United States Gross Domestic Product on Thursday (August 29) at 12:30 GMT, and the estimates point to a now habitual 2.8% growth rate for the second quarter this year. 

A good GDP report may indicate that the U.S. economy is growing normally. This might have implications for financial markets, corporate strategies, and the value of the U.S. dollar. If the GDP were better than expected, it would show optimism toward more consumer spending or increased business investment, which could sound the bell for economic confidence. If the growth rate is not as forecasted, that could signal danger and economic challenges such as high inflation, low exports, or diminished government spending.

The importance of the GDP figure is the implications it would have. Because it measures economic activity, a healthy growth rate may be taken so that recession remains at bay, with substantial ramifications for interest rates and potential movements in the dollar and current account deficits. A below-expectation GDP, on the other hand, could trigger economic stagnation and set off waves of changes in investor sentiments and policy considerations. Policymakers and financial institutions could, at this moment, adopt a wait-and-see attitude, as the pace with which the response will be made depends on whether the report will match the growth expectations set or turn out to be quite different from such assumptions.

For now, the projection of 2.8% remains a benchmark, but the actual figure, once released, could set the tone for economic discussions in the coming weeks.

U.S. Crude Oil Stocks Report to be Released Today

The U.S. Energy Information Administration, EIA, will publish its latest data on Crude Oil Stocks Change today. Market consensus projections point to a decrease of around 2.239 million barrels this week, compared to a decrease of 4.649 million barrels in the previous week 

That means, should there be a materialization of the forecasted decline in crude oil stocks, reflecting a less sharp decrease in inventory compared to a week ago.

On the other hand, considerable deviations from the actual change in crude oil stocks against the forecast may trigger marked market reactions. This can be a drag on oil prices. On the other hand, if stocks fall over what was forecasted, it may indicate stronger demand or supply constraints, which could drive higher oil prices.