Trade Desk Thoughts - Durable Goods Orders

Durable Goods Orders (July) Actual 1.3%, Expected 0.1%, Previous 1.3% (Revised from 0.8%)

Release Explanation: The value of new purchase orders placed with manufacturers that have a life span of more than three years. These can include; aircraft, household appliances, computers and automobiles. The report builds an economic picture how busy the manufacturing industry will be over the coming months. Retail Sales, CPI and GDP are directly affected by Durable Goods orders. A currency will be affected eventually by the consequences of these numbers, not always however straight away.

Trade Desk Thoughts: New orders for manufactured durable goods in July increased $2.9 billion or 1.3% to $219.3 billion, the U.S. Census Bureau announced today. This was the third consecutive monthly increase and followed a 1.3% June increase. Excluding transportation (core durable goods), new orders increased 0.7%. Excluding defense, new orders increased 2.8%. Shipments of manufactured durable goods in July, up three of the last four months, increased $5.3 billion or 2.5% to $218.3 billion. This followed a 0.9% June increase. Nondefense new orders for capital goods in July increased $4.5 billion or 6.3% to $76.3 billion.

"Strong aircraft sales made a big contribution to durable goods orders in July," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "However, even with this volatile component stripped out orders rose 0.7%, against an expectation of a 0.5% fall. Also, business spending rose 2.6%, the biggest gain since April, after analysts had expected a decrease 0.1%.

Forex Technical Reaction: S&P futures had a positive reaction to the report, but it looks as if speculation regarding potential damage from Hurricane Gustav is weighing on dollar sentiment. Oil is up nearly $2 (1.7%)

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