Durable Goods Orders Rose in September
Durable goods orders increased by $6.3 billion to $345.4 billion in September, following a slight rise in August. This data is critical as it reflects consumer and business confidence, essential in the current economic climate. A sustained uptick in durable goods orders could support a stronger outlook for economic growth and influence the Federal Reserve's monetary policy trajectory, ultimately affecting USD dynamics.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.075, which is the median across 8 firms. On the upper bound, Goldman sees a potential target of 1.12 while BofA is more conservative with a target of 1.04, suggesting diverging views on currency strength amidst economic indicators like today’s durable goods report.
How firms align
JPMorgan aligns closely with the positive interpretation of this durable goods data, targeting 1.10, reflecting an optimistic stance on economic resilience. Conversely, BofA remains a holdout, with their target at 1.04, hesitant about the underlying economic momentum supporting sustained growth against potential headwinds. For more details, see our internal reports on each firm.
What the data shows
This increase in durable goods orders supports recent forecasts indicating potential upward pressure on the USD, aligning with our previously published insights on consumer spending trends and manufacturing outlooks.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Durable goods orders increased, signaling potential consumer confidence.
- 02USD could gain strength if economic growth persists.
- 03Be cautious of downside risks should subsequent data disappoint.
- 04Inflation dynamics remain key as we reflect on durable spending trends.
Market implications
Traders should monitor the upcoming economic data releases, particularly next month’s employment figures, as they may provide further insights into USD movements. Our consensus EUR/USD target remains pivotal at 1.075, with market positioning hinging on data outcomes.
Risks to this view
Should subsequent data releases indicate a slowdown in consumer spending or manufacturing output, this could invalidate the current bullish sentiment on the USD. Specifically, any weak prints in upcoming job reports could prompt a reevaluation of forecasts.
Sentiment by currency
USD+EUR~JPY~GBP~Composite USD score: +0.35
Sources & References
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