Last week several big economies have reported their third-quarter GDP reports and the scorecard may not be what many have expected especially after the Japanese economy entered its second official recession in as many years. The Japanese GDP report showed a contraction of 1.6% in the third-quarter which followed a much steeper contraction of 7.3% in the second-quarter as compared to 2013. The Japanese recession was largely due to Abenomics as the economic policy of Prime Minister Abe is know.

Germany reported its third-quarter expanded 1.2%. This was the final reading and showed no change. The positive was a strong increase in exports of 1.9% which was more than double the initially reported increase of 0.9%. Private consumption was also revised sharply higher to 0.7% from the 0.1% initially reported. Despite better individual components in the German GDP report the overall growth rate remained unchanged at 1.2% which suggests that the initial report may be have been extremely inflated.

The US reported its third-quarter GDP which was revised higher to reflect a growth rate of 3.9% annualized. Despite the expansion in the GDP report forex traders are wary that the government figures seem to be out of line with economic reality. The US Dollar was unable to mount a substantial rally after the release of the GDP report due to the lack of trust in the US data. This distrust is most evident with the NFP reports as two congressional hearings are planning to investigate the BLS which released the monthly labor report for overstating the figures.

The UK followed with its GDP report and showed a strong 3.0% growth rate in the third-quarter, matching the growth rate of the second-quarter. Looking deeper through the report it showed a strong gain in government spending of 1.1%. This is considered a negative for the health of the economy. Exports showed a contraction of 0.4% while total business investment contracted by 0.7%. Imports did increase by 1.4%. The British Pound was punished for the composition of the GDP report and closed last trading week around session lows.

The Canadian GDP report was released last Friday and showed a much stronger Canadian economy. The annualized growth rate came in at 2.8% which beat estimates for a growth rate of 2.1%, but marked a slower economy than in the second-quarter when the Canadian economy increased by 3.6%. The Canadian Dollar sold off heavily as the growth rate slowed down substantially, but managed to close off its session lows.