Just saw a breaking news, the GDP report that the Federal Reserve had been withholding is finally set to be released at 8:30 AM (Eastern Time) today. This data is very likely to directly set the tone for the market's short-term trends. Currently, the market is generally estimating around 3.2%, and the sentiment has mostly digested this expectation in advance. The key point is, in which direction will the actual published data lean?
If the actual data is less than 3.1%, it will be a clear signal of an economic slowdown, and the market will start betting on interest rate cuts, which is good for risk assets.
If the actual data equals 3.2%, consistent with market expectations, then the market is likely to oscillate, and don’t expect any major movements.
If the actual data is greater than 3.3%, the market will worry about an overheating economy, and the Federal Reserve may be even less inclined to cut interest rates, tightening liquidity expectations, which would be generally unfavorable for the market.
This is essentially a game where data influences market sentiment. Especially since the market liquidity has not been great recently, any results that exceed expectations could intensify market volatility. I believe this time the GDP data should not only be viewed by the numbers themselves but also how the market interprets them.
After all, in the phase where the logic of 'good economy means delaying interest rate cuts' still makes sense, even if the data looks good, if it triggers market concerns about tightening, it may actually lead to a market decline.
I advise everyone not to make hasty moves before and after the data is released, especially for those playing contracts, be careful of sudden price fluctuations and getting 'stabbed'. Wait for the market to digest the sentiment and find a clear direction before considering whether to follow up with operations.
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