Why first-estimate output figures rarely shake currencies

[FXS London Scalper]

GDP is the broadest measure of the economy, yet the first release often moves currencies less than monthly data like payrolls. a lot of what it contains was already visible in earlier indicators, and economists' nowcasts narrow the range of outcomes.

When GDP does move markets, it is usually because of components rather than the headline. A strong headline driven by stock building or public outlays may be read as weaker than one driven by consumer spending and business investment.

A worked comparison: two quarters with the same 2 percent annualised growth, one with consumption up 3 percent and inventories down, the other with consumption flat and inventories up sharply. Analysts would likely describe the first as healthier, and the currency reaction could reflect that.

The price indices released with GDP can also matter when inflation is the main theme. A trader can prepare a simple sheet for components before the release.

Do you trade GDP releases or skip them?