US Durable Goods orders fall sharply in December

Jan 28 2016, 2:07 pm

Today’s Economic events

  • Australia Export prices q/q -5.40% vs. -3.90%; import prices q/q -0.30% vs. -0.80%
  • Spain retail sales y/y 3.20% vs. 4.20% previously
  • UK Q4 GDP preliminary 0.50% vs. 0.50%; y/y 1.90% vs. 1.90%
  • UK Index of services 3m/3m 0.60% vs. 0.60%
  • Germany CPI m/m -0.80% vs. -0.80%; y/y 0.50% vs. 0.40%
  • US Durable goods orders -5.10% vs. -0.50%; core durable goods orders -1.20% vs. -0.10%
  • US weekly jobless claims 278k vs. 281k

Coming up

  • Pending home sales

The Asian markets were trading mixed today after yesterday’s FOMC statement saw the Federal Reserve leaving base rates unchanged but struck a cautious tone on the global economic developments, modest growth in the US and inflation. The Nikkei 225 closed -0.71% and the Shanghai Composite fell -2.85% for the day. Economic data this morning included Australia import/export figures which showed a sharp decline in exports while imports improved modestly in comparison. AUDUSD managed to keep up its gains from yesterday and is currently up 0.75% for the trading at 0.708. NZDUSD managed to turn around after falling to 0.6427 yesterday on a dovish RBNZ which left interest rates unchanged. The Kiwi is currently up 0.60% against the US Dollar trading at 0.647.

In Japan, there were some political changes as Akira Amari, the economy minister stepped down from his role, paving the way for Nobeteru Ishihara. Despite the change in the key ministry, most economists expect no change to Abe’s policies.

Amari was one of the key ministers in pushing forward with Abe’s economic reforms, nicknamed ‘Abenomics

The Bank of Japan is due to meet tomorrow but is expected to stay on the sidelines. USDJPY is trading flat today up 0.14% for the day but is range bound within yesterday’s price action.

The European session saw the equity markets trading in the Red. The German DAX was down -1.79% while the London FTSE100 was down -0.85% at the time of writing. Economic data from Europe included Germany inflation numbers which fell -0.80% as expected. The EURUSD is up 0.25% for the day, trading at 1.091 at the time of writing. The single currency managed to hold on to the steady gains since yesterday. Prices briefly fell earlier today to test session lows of 1.0875 before reversing higher. The GBPUSD is also trading strongly today, gaining 0.70% for the day after initially opening near the lows of 1.4239.

In the US, monthly durable goods orders numbers released today showed another bout of weakness in the factory sector as the headline orders fell -5.10% on a seasonally adjusted basis from a month ago, posting a sharp decline since August 2014, according to numbers released by the US Commerce Department. Excluding transportation, orders fell -1.20%. The US Dollar eased back on the data coming off yesterday’s dovish FOMC statement. Meanwhile, the weekly US jobless claims posted the first week of improved numbers as weekly claims rose less than expected by 278k below estimates of 281k. The US equity markets are however pointing to a higher open today with the Dow Jones and the S&P500 expected to open 0.27% and 0.40% higher respectively.

On the commodity front, Oil prices are up 4.71% today. The gains came about despite yesterday’s Crude Oil inventories showing a bigger than expected build-up in the US commercial stockpiles. WTI Crude Oil is currently trading at $33.5 a barrel. Gold prices, which surged to a one-month high yesterday are seeing a modest pullback today. Gold is currently down -0.37% for the day trading at $1120 an ounce.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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