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. Builds an economic picture of how busy the manufacturing industry will be over the coming months and is considered a leading indicator. “It affects Retail Sales, CPI and GDP. A currency will be affected eventually by the consequences of these numbers but not always straight away,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.com Trade Desk Thoughts: Orders for Durable Goods, those designed to last three years or longer, decreased by $1.3 billion or 0.8% last month to $161.2 billion seasonally adjusted, the Census Bureau said. This was the seventh decrease in the last eight months and followed a 2.1 percent February increase. Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders also decreased 0.6 percent.
“Companies are adjusting inventories to retreating demand and have put off plans to upgrade and spend on capital equipment. Friday's data showed manufacturers' durable goods inventories in March decreased a second straight month, sliding 0.9%.
Within the durables data, unfilled orders are a sign of future demand. That category decreased in March for a sixth month in a row, falling 1.4%, an indication the economy will restrain the factory sector in coming months,” TheLFB-Forex.com Trade Team said.
Shipments of manufactured durable goods in March, down eight consecutive months, decreased $3.0 billion or 1.7 percent to $175.0 billion. This followed a 0.8 percent February decrease. Inventories of manufactured durable goods in March, down three consecutive months, decreased $3.7 billion or 1.1 percent to $331.6 billion. This followed a 1.3 percent February decrease. Orders for non-defense capital goods excluding aircraft, a key barometer of business investment, rose by 1.9%.
Forex Technical Reaction: S&P futures fell almost 3 points during the news release, bouncing from the session’s high. The release was felt in the currency market also, as the euro dropped 30 pips as the numbers hit the wires.