Mixed data from the US: headline durable good orders missed with a drop of 0.1% in September, but this comes against an upwards revised 0.3% in August: 0.1% was initially reported. Core orders went out at 0.2% exactly as expected, but also here, instead of coming after a drop of 0.2%, the revised figure shows +0.1%. Jobless claims stand at 258K, a small miss against 255K predicted.
The US dollar is sliding, but the move is very limited. Will it continue higher? The fresh data, as well as the revised data, are both for Q3, therefore both feeding into tomorrow’s GDP release.
The bigger worries long-term could be derived from the non-defense, non-air orders: these fell by 1.2%, much worse than expected.
US durable goods orders were expected to rise by 0.1% in September, repeating the same growth seen in August (before revisions). Core orders carried expectations for an increase of 0.2% after falling 0.2% beforehand. Jobless claims were projected to stand at 255K, down from 260K seen last week.
Currency markets were mixed ahead of the publication with the pound jumping up and down on the good UK GDP while the euro was rising towards 1.0925. USD/JPY was stable around 104.70.
These figures are significant on their own, and they also have a further impact: they feed into the first GDP release, due tomorrow. The US saw weak growth for a long time and the GDP report for Q3 is expected to break the bad spell. See how to trade the US GDP with EUR/USD.
The second substantial impact is for the Fed: core orders are a good measure of investment, something that has been lacking from the US economy of late.
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