US durable goods orders is expected to improve gradually

US durable goods orders to show a bottoming in capex

"A 0.8% m/m Increase in total bookings in May and a 1.0% m/m rise in orders excluding transportation", projected Socgen which are consistent with the tentative signs of bottoming in the manufacturing sector observed in the survey data.

There is a modest rise in manufacturing ISM in May and the diffusion index for new orders has now posted two back-to-back increases. This is consistent in the view that the capex cuts in the oil & gas sector should subside and fully dissipate during the summer months. 

"The drag from the dollar is likely to be more persistent, but on balance a reacceleration in equipment spending growth in second half of the year to about 5.8%, up from a 1.7% average over the past two quarters can be looked for", added Socgen.