More resilient economic data increases the risk of a harder landing eventually

It’s been a mixed trading session on Thursday as we get more evidence of economic resilience from the US which has left investors wondering whether they’ve once again underestimated how much monetary tightening is going to be necessary.

This has been a common theme this year with markets repeatedly reflecting a far more optimistic outlook on interest rates despite the economic figures continuing to outperform. Investors are finally, reluctantly, coming around to the Fed’s way of thinking although we are still seeing a surprising amount of resilience in stock markets considering every additional rate hike increases the risk of recession and a harder landing.

The first quarter GDP number was the most surprising given it significantly surpassed expectations but initial jobless claims were also much lower than forecasts and the recent trend. Resilience is not something we usually complain about but on this occasion, it could be to the economy’s detriment.

Consolidating after the recent surge

Bitcoin remains in consolidation between $30,000 and $31,000 after jumping more than 20% over the last couple of weeks on the back of some favourable news flow. It hasn’t all been favourable recently, of course, but perhaps the ETF filings are viewed as a more significant development than the SEC charges which could ultimately prove to be a positive if it creates some much needed clarity on the regulatory landscape.

For a look at all of today’s economic events, check out our economic calendar:

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.