The US Trade Balance is worse than expectations. Should lower 3rd quarter GDP.
The Trade Balance came in at -36.472B which was worse than expectations. The Exports rose by 2.9%. The Imports rose by 5.8%. The Real Trade Balance was also more negative than last month. This is the value that gets plugged into the GDP for the 3rd quarter and the higher value will have an effect of lowering the 3rd quarter GDP. The Real Trade Balance fell to -41.714B from -37.861 B.
The initial reaction is a slightly lower dollar. The EURUSD has moved up to 1.4884 from 1.4875. USDJPY fell from 89.75 to 89.47. A lower dollar should lead to more exports and less imports. The problem is the US is reliant on imports from other countries (i.e. oil and other goods from China). As a result, the dollar moves may not necessarily have a huge effect on the margin. As a result, the effect may be shortlived this morning and focus may revert back toward the stock market opening shortly. Dow Futures are up 19 points. S & P are up 3 points
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