A Guide To US Durable Goods Orders

Sep 28, 2:59 pm
Durable Goods Orders

After a lack of fundamentals and low trading volume in Europe today, all eyes turns to the US again. Traders will be awaiting two major events, including Durable Goods Orders and the testimony of the Federal Reserve Chair Janet Yellen.

Definitions

Durable Goods Orders: this indicator measures the change in the total value of new purchase orders placed with manufacturers for durable goods

Core Durable Goods: this indicator is similar to Durable Goods Orders, but it measures the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items

Janet Yellen's Testimony: Yellen is due to testify on supervision and regulation before the Committee on Financial Services in Washington DC today

Why This Is Important

Durable Goods Orders is a leading indicator of the nation’s production. Rising purchase orders means that manufacturers will increase activity as they work to fill the orders.

As for Janet Yellen's testimony, as head of the central bank, which controls short-term interest rates, she has more influence over the nation's currency value than any other person. Traders scrutinize her public engagements because they are often used to drop subtle clues regarding future monetary policies.

Expectations

Indicator

Forecast

Previous

Durable Goods Orders

-1.0%

4.4%

Core Durable Goods Orders

-0.5%

1.3%

Market Impact

Today’s economic releases are set to have a notable impact on the markets, especially the US Dollar pairs. The expectations are pointing to weaker results for the month August. If the figures come in as expected, the US Dollar is likely to lose some grounds. A weaker reading, however, would increase the downside pressure while a higher reading would maintain the US Dollar stabilization ahead of the Federal Reserve Chair testimony.

What Matters The Most

In today’s figures, traders should focus on Core Durable Goods Orders more than the Durable Goods Orders. This is primarily because core goods figures show the real production levels by excluding volatile goods.

Nour Eldeen Al-Hammoury

Nour Eldeen Al-Hammoury has more than ten years of experience in focusing on foreign exchange and global economic developments, as well as central bank policies and intermarket analysis (global markets relationships). Nour Eldeen is a regular on many major TV networks (several times each) such as: BBC Radio, BBC World News, Al-Jazeera, Al-Hurra TV CNBC Europe, CNBC Asia, CNBC Arabia, Al Arabiya, Bloomberg, Russia Today, Dubai TV, Sama Dubai, Skynews Arabia, Qatar TV and Future TV News.