US factory orders increase slightly in August
US factory orders saw a modest increase in August, driven primarily by demand for electrical equipment, appliances, and components. However, this uplift was somewhat tempered by declines in commercial aircraft orders, highlighting mixed signals in the manufacturing sector. The overall neutral sentiment across major currencies suggests that market participants remain watchful of data that could signal shifts in economic momentum. As such, while the uptick in factory orders offers some reassurance, the underlying weaknesses in certain sectors warrant close attention.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). Reuters' view aligns more closely with the upper third — JPMorgan and ING share that framing.
How firms align
JPMorgan maintains an aligned target of 1.10, indicating confidence in a mild rebound in the manufacturing sector, while BofA’s lower target of 1.04 reflects a more cautious stance. See our internal reports for further insights from firms like JPMorgan and BofA.
What the data shows
The slight rise in factory orders may contribute to expectations around future economic growth, although significant weaknesses persist in certain areas. Recent publications suggest a cautious outlook; see insights at /research/factory-orders-analysis.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01US factory orders rise slightly, indicating mixed demand across sectors.
- 02Weakness in commercial aircraft suggests caution in the broader manufacturing outlook.
- 03Watch for potential shifts in economic data affecting USD positioning.
- 04Market sentiment remains neutral despite positive headline.
Market implications
Traders should monitor the 1.075 level closely for EUR/USD as data evolves, particularly with upcoming manufacturing PMI reports. A breach or hold here could signal shifts in sentiment.
Risks to this view
A reversal could occur if weak manufacturing data extends beyond commercial aircraft, leading to a more pronounced slowdown in the sector. Any unexpected shifts in Fed policy could also trigger volatility.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
Sources & References
How we cover this story