US durable goods orders likely to rise on improvement in purchasing activity

The United States April Commerce Department durable goods orders report, expected to be released by 12:30GMT is likely to witness gain in the overall measure, remarkably on an improvement in purchasing activity though this year. However, downside risks still persist on likely contraction in aircraft and non-defense capital goods.

The overall measure is expected to rise 0.5 pct m/m in April as against the 0.8 pct reading in March. This should comply with a 0.3 pct increase in ex-transportation compared to 0.2 pct reading that occurred in March.

Meanwhile, capital goods orders, non-defense and ex-aircraft is also seen positive, with an expectation of +0.5% m/m in April, versus the -0.8% m/m reading seen in March.

Meanwhile, the core forward looking indicator, orders of non-defense capital goods, ex-aircraft held unchanged m/m in March, following the -2.7 pct m/m decrease seen in February, finishing 1Q16 on weaker footing.