The US durables report revealed a firm 1.7% February orders gain thanks to a 4.3% rise in transportation orders, alongside a 0.4% increase in orders ex-transportation that slightly beat assumptions. We saw a firm round of equipment data, lean shipments and inventory gains, and a 6.3% defense orders drop. Expectations are now for a Q4 GDP growth boost to 2.0% from 1.9%, with a hikes of $6 bln for inventories and $2 bln for construction, but downward bumps of $1 bln for consumption and $3 bln for net exports. Expectations are also for a 1.5% Q1 GDP growth with a 5% growth rate for real equipment spending, after a 1.9% Q4 clip, alongside a $10 bln Q1 inventory subtraction that leaves a $42 bln accumulation rate.
Meanwhile, U.S. Markit manufacturing PMI was 53.4, with the services index at 52.9, for the preliminary March readings. Both of those dropped from their respective February prints of 54.2 for manufacturing (and 55.0 in January, the highest going back to March 2015) and 53.8 for services (January’s 55.8 was the best since November 2015). The March preliminary composite index slipped to 53.2 from 54.1, but is a 13th straight month in expansionary territory (over 50). Hiring generally eased across the various sectors.
USDJPY remains capped at 111.50 and supported at 111.00 today as markets continue to mark time. President Trump threw down the gauntlet on the Affordable Care Act (ACA) repeal, saying he would leave it in place if he didn’t get a vote on it from the House by today and move on to the rest of his agenda. That left markets in limbo, since they’ve priced in tax reform and deregulation, and would have to sort through the political implications of a failure on ACA.
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