U.S. factory orders rise in line with expectations in September

U.S. factory orders data for the month of September indicate towards some easing in underlying orders activity, in line with last week’s advance durables data and survey readings from the ISM and elsewhere. In all, factory orders rose 0.7 percent sequentially in the month, consistent with consensus expectations.

Most of the monthly swing was because of declines in the volatile transportation and defence categories, with overall defence orders falling 14.5 percent after September’s 48.8 percent rise and a deceleration in transportation orders to 1.9 percent after an outsized 13.3 percent gain in September. Stripping transportation, orders rose 0.4 percent sequentially for the second straight month, while ex-defence orders remained the same on the heels of August’s 1.5 percent gain.

Final estimates for the durables categories remained the same after rounding from last week’s advance prints, and with overall orders rising 0.7 percent sequentially, and new orders of durables excluding transportation moving sideways.

Nondefense capital goods’ estimates continue to be in line with a decelerating business investment entering third quarter 2018, with orders of nondefense capital goods excluding aircraft and parts dropping 0.1 percent sequentially and shipments of core capital goods dropping 0.1 percent for the second straight month.

Core capital goods orders rose 8.8 percent three month saar in September, while core capital goods shipments rose 7.3 percent.

“With today’s estimates in line with our expectations given last week’s advance durables data, revisions to our GDP tracking forecast were minimal. Hence, our tracking estimate for Q3 2018 still stands at 3.6 percent q/q saar”, stated Barclays.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -44.1086. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex