24 Jun 2015
Durable Goods offering little for Fed to move on - ING
FXStreet (Guatemala) - Rob Carnell, analyst at ING Bank explained the disappointments in the US durable goods orders released in the US session.
Key Quotes:
"US investment is still limping along, at least, according to the latest durable goods orders and shipments information."
"And there is little sign of a robust bounce back, which could dampen thoughts of a 3Q15 rate hike from the Fed. Headline durable goods orders fell for a second month by -1.8%, to sit 5% below last year’s level, and though this looks better when viewed ex the volatile transport sector, the 0.5% mom gain in this core measure only just absorbs last month’s decline."
"Other watched components of this choppy series include the capital goods orders and shipments, here, it is the three month moving average we watch, and the annualised rate of -7.9% for core capital goods orders is only marginally less bad than it was in March, though an improvement on the dire April figure. The story on core capital goods shipments is a little better, at only -1.8% (3mma annualised) than the negative trend prevailing in March before the April spike down, but is not exactly impressive."
"The impact of low oil prices on the extraction sector may still be weighing on this data, though this should start to lift in the next couple of months as the worst of this negative shock passes through. Inventory to shipments ratios remain very steady at 1.67, so no imminent production spike can be anticipated."
Key Quotes:
"US investment is still limping along, at least, according to the latest durable goods orders and shipments information."
"And there is little sign of a robust bounce back, which could dampen thoughts of a 3Q15 rate hike from the Fed. Headline durable goods orders fell for a second month by -1.8%, to sit 5% below last year’s level, and though this looks better when viewed ex the volatile transport sector, the 0.5% mom gain in this core measure only just absorbs last month’s decline."
"Other watched components of this choppy series include the capital goods orders and shipments, here, it is the three month moving average we watch, and the annualised rate of -7.9% for core capital goods orders is only marginally less bad than it was in March, though an improvement on the dire April figure. The story on core capital goods shipments is a little better, at only -1.8% (3mma annualised) than the negative trend prevailing in March before the April spike down, but is not exactly impressive."
"The impact of low oil prices on the extraction sector may still be weighing on this data, though this should start to lift in the next couple of months as the worst of this negative shock passes through. Inventory to shipments ratios remain very steady at 1.67, so no imminent production spike can be anticipated."