Finally some good underlying data: core durable goods orders are up 0.5% in April, better than +0.3% expected. This also came on top of an(other) upwards revision to the March data to +0.6%. The headline orders number came out at -0.5% as expected, but on top of an upwards revision as well: 5.1% instead of 4.7% in March.
USD is stronger with EUR/USD sliding below 1.09.
More data: excluding defense and air, it’s 1% higher against 0.3% expected and with an upwards revision from -0.5% to 1.5% this time. Also other measures are better than expected for April and for the March revisions.
More:Â US data beats with higher confidence and better new home sales
Currency reactions
- EUR/USD slides back below 1.09, testing the lows at 1.0885. ECB QE still looms. More:Â Staying short EUR/USD targeting 1.0460 as USD tests momentum
- GBP/USD is below 1.54, UK data came out better than expected earlier with CBI Realized Sales hitting 51 points.
- USD/JPY continues north and is getting close to 123. The yen finally began moving.
- USD/CAD is on the verge of 1.24, despite stable oil prices. See: USD/CAD: Bullish Engulfing to 1.24 Neckline – SocGen
- AUD/USD trades around 0.7777.  See: AUD/USD: Bearish and Short – MS
- NZD/USD is around 0.7275.
US durable goods orders were expected to slide by 0.4% in April after a jump of 4.7% in March (revised data). Core orders carried expectations for +0.5% after an upwards revised 0.3%. This Q2 figure should be good to support the V-shaped economic activity theory.
The US dollar took a small break from its rally, with EUR/USD rising above 1.0925 just before the event, partially erasing the big falls.
The original publication for March, which showed yet another drop in core orders, was very worrying as it reflected an ongoing squeeze on investment.
Later we have quite a few more economic indicators as US traders return from their bank holiday. Consumer confidence and new home sales stand out.
