Well...US GDP was reported overnight and it was a stinker, far below even expectations of a weak result of 1 per cent growth.
It had seemed that the US economy was recovering nicely, with real GDP growth apparently picking up steadily over time.
Moreover, payrolls growth until lately had been recording some astonishing gains, which had been to some extent also supported the JOLTS survey and jobless claims.
GDP slows to crawl speed
Over the past three quarters, however, GDP appears at face value to have slowed from an annualised pace of 5 per cent in Q3 2014, to 2.2 per cent in Q4 2014, to just 0.2 per cent in Q1 2015.
Which is a crawl.
First quarter growth had been weak in 2014 too, blamed on bad weather, but this result was in no way encouraging, and was in any case propped up by inventories (which will thus act as a drag in the next quarter).
Hikes pushed out
In all likelihood, this soft result effectively rules out the chances of an imminent rate hike by the Federal Reserve.
Interestingly the United Kingdom has recently experienced a similar dynamic with record high employment and unemployment declining to just 5.6 per cent.
Yet "Cool Britannia" saw a very weak preliminary GDP result reported for Q1 2015, suggesting that productivity may be in the gutter.
None of the above is particularly helpful to the Reserve Bank in Australia, which is on balance looking for a lower dollar at around US ~70 cents, yet instead now has a dollar at US ~80 cents.
Markets weren't quite sure what to make of the US GDP result, but the pressure seems to be on for another rate cut to be delivered in Australia.
Failure to cut rates could see the dollar creeping back above US 80 cents.
Iron ore futures are getting walloped today too...