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Lots of numbers: jobless claims disappointed with a rise to 313K, worse than expected. CPI fell 0.7% m/m, more than expected, but due to oil. Core CPI actually rose +0.2%, better than expected. Y/y -0.1% in the headline number and 1.6% in core CPI. Durable goods orders rose 2.8%. However, durable goods orders rose by only 0.3%.

The numbers can cause a lot of confusion. However, in the bigger scheme of things, jobless claims still show a growth in jobs and core inflation is A-OK.  The dollar is stronger.

All the data:

  • Durable goods orders rose 2.8%, but suffered a downwards revision for the previous month from -3.3% to -3.7%.
  • Excluding defense and air, they rose +0.6%.
  • Excluding transpiration they rose 0.3%.
  • CPI dropped -0.7% m/m and -0.1% y/y. Previously it was +0.8%.
  • Core CPI rose +0.2% +1.6% y/y – the y/y rise is exactly like the previous month. This clearly shows that  lower oil prices do not weigh on other prices.
  • Jobless claims jumped 31K to 313K.
  • Continuing  claims stand at 2.401.

Currency  reaction

Special focus:  EUR/USD finally falls out of range – more to come?

  • EUR/USD is reacting with a fall below the 1.13 level and is still above support at 1.1270. Update: the pair dips to a new low below support at 1.1240.  Opinion:  The Case For Cutting Our EUR/USD Forecasts – Goldman Sachs
  • GBP/USD extends the falls to  1.5470.
  • USD/JPY makes the climb above 119 after the move.
  • USD/CAD has a strange reaction due to Canadian inflation figures. Canada reported a  monthly drop of 0.2% and rose 1% y/y. Core CPI  is up 0.2% m/m and 2.2% y/y. These are strong number tghat eventually keep USD/CAD balanced around 1.2460.
  • AUD/USD  extends its falls to 0.7860.
  • NZD/USD is at 0.7560.

Background

A big bulk of US figures was released all at once: jobless claims were expected to  stand at 288K after 283K last week.  Headline inflation carried expectations for a fall of 0.6% in January after -0.4% in December m/m. Core inflation was expected to rise 0.1% after a flat number beforehand. Durable goods orders were expected to rebound 1.7% after a fall of 3.3% and core orders +0.6% after -0.8% last month.

The dollar was stronger after Bullard’s bullish comments.  US data has been mixed of late, especially retail sales.

more coming