US data point towards solid growth – Deutsche Bank

FXStreet (Delhi) – Jim Reid, Research Analyst at Deutsche Bank, notes that there was a positive take away from the latest preliminary October durable goods orders which, boosted by aircraft orders, were up a sharp +3.0% mom (vs. +1.7% expected) with the ex-transportation also up a better than expected +0.5% mom (vs. +0.3% expected).

Key Quotes

“Impressive also were core capex orders which were up sharply last month (+1.3% mom vs. +0.2% expected), with September revised up seven-tenths to a +0.4% gain. Last month was the biggest monthly gain in 3 months, driven in particular by higher orders for machinery and computers.”

“Meanwhile, last month’s personal income reading was up +0.4% which has now helped to lift the savings rate to 5.6% which is the highest since December 2012. Personal spending (+0.1% mom vs. +0.3% expected) was a bit lower than expected. It was hard to get too excited about the latest inflation data where the October PCE deflator printed at +0.1% mom last month and a tenth below expectations, keeping the YoY rate unchanged at +0.2%. The PCE core was also a tenth below expectations at 0.0% mom, which kept the YoY rate at +1.3%.”

“Elsewhere, new home sales were up a solid +10.7% mom (+6.8% expected) clip in October, although the steep fall in September was revised lower still. The September FHFA house price index was up +0.8% mom (vs. +0.4% expected).”

“Initial jobless claims were down 12k last week to 260k and near the recent lows. The flash November services PMI was up a robust 1.7pts to 56.5 (vs. 55.1 expected) which, along with the manufacturing print, helped nudge the composite up 1.1pts this month to 56.1 which would be the highest since April if it stays there.”

“Finally the last read of the University of Michigan consumer sentiment number for November was revised down 1.8pts to 91.3 but still a bit higher than that seen in October and September. The 1y and 5-10y inflation expectations were revised up however, by two-tenths and one-tenth to 2.7% and 2.6% respectively.”

Jim Reid, Research Analyst at Deutsche Bank, notes that there was a positive take away from the latest preliminary October durable goods orders which, boosted by aircraft orders, were up a sharp +3.0% mom (vs. +1.7% expected) with the ex-transportation also up a better than expected +0.5% mom (vs. +0.3% expected).

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