US Durable Goods Order Rise Less than Expected

United States (US) manufactured durable goods orders increased 2.2% in February 2012 to $211.8 billion making it the fourth increase out of five months, according to the US Census Bureau on Wednesday. Durable goods are items that can be used for more than three years, are typically more expensive and can be put off to purchase at a later time. Increases in these tend to signify consumers and companies are comfortable enough with present economic conditions to purchase these non-essential items. Yet, February’s result came in lower than economists’ forecasts of a 3.0% increase. Moreover, when excluding transportation, new orders for durable goods gained 1.6%. Transportation equipment, increasing the past four months, gained the most for durable goods, up 3.9% or $2.1 billion in February. 

Shipments of manufactured durable goods lowered 0.4% or $0.89 billion in February to $206.6 billion after increasing the previous two months, including January’s with a 0.1% increase. Manufactured goods’ inventories increased 0.4% to $373.7 billion, which is the highest level since numbers began being published. Capital goods orders, excluding defense, rose 1.5% to $81.8 billion.

In other news, US crude oil refineries averaged a bit below 14.5 million barrels a day in the week ending March 23^rd, 88,000 more a day from the previous week. Consequently, oil prices fell to near $106 per barrel, indicating demand continues to be weak. Additionally, consumption could remain lower as gasoline prices reach approximately $4.00 per gallon.

The EURUSD dropped on negative sentiment from Wall Street after the release of the disappointing durable goods order report. The pair fell below support at 1.3300 briefly but looks to be consolidating as we near the end of the U.S. session. If this level holds, we expect the EURUSD to trade in a range between 1.3300 and 1.3360. 

Eugene Ross, Analyst

Admiral Markets

At any use of the analytical material taken from a site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing center «Admiral Markets», the reference to a company site is obligatory.