U.S. durable goods orders likely to have rebounded strongly in June – Wells Fargo

U.S. durable goods orders are expected to have rebounded in June. In the prior month, durable goods had dropped 0.4 percent. The fall was slightly smaller than anticipated, due to the 15.5 percent sharp rise in defence orders. Core capital goods orders were also revised up to a 0.3 percent rise in May, coming on the heels of April’s standout 2 percent rise. Shipments continued to be strong, rising 0.6 percent in the month.

The recovery in June in industrial production also implies that durable goods orders are likely to have rebounded in June, noted Wells Fargo in a research report. Unfilled orders continue to rise in the midst of a slower inventory growth, as businesses continue to face supply-chain constraints in meeting rising customer demand.

The recent rate of capital expenditure spending still represents a deceleration from the record pickup in spending registered in the second half of last year.

“However, we look for durable goods orders to rise 3.2 percent in June, signaling a solid pace of equipment spending in the remainder of the year”, added Wells Fargo.

At 21:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bearish at -75.2338. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex