U.S. factory orders rise below expectations in December

U.S. factory orders rose below expectations in December. On a sequential basis, factory orders were up 0.1 percent, as compared with consensus expectations of 0.5 percent. The durable component was up 1.2 percent, although the change in November was downwardly revised to a rise of 0.9 percent.

The nondurable component saw some surprise, recording a drop of 1 percent, as compared with a fall of 0.3 percent implied by the consensus headline figure. The fall was mainly seen in the petroleum and coal category, and the drop was mainly driven by lower prices. Orders for nondurable goods other than petroleum and coal was mainly unchanged. The modest change in nondurable orders ex-petroleum strengthened the flat pattern that emerged in the late summer. This sector is not in retreat, but it has lost momentum.

Durable goods rose 1.2 percent, a strong rise overall, but the advance was driven greatly by a rise in the volatile aircraft component. Bookings for motor vehicles also were strong. Orders for durable goods ex-transportation rose just 0.1 percent, strengthening the flat pattern recorded in the past many months.

“We keep a close eye on orders for nondefense capital goods other than aircraft because of the insights into business investment spending. This component fell 1.0 percent in December, revised from the -0.7 percent estimate published last week. The latest drop reinforced a downward drift that began last summer”, noted Daiwa Capital Market Research in a report.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -17.5915 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex