
The Durable Goods report for the USA is due out this morning. This
will provide figures for the manufacture of higher priced items with a useful
life of three years or more.
It is regarded as an important indicator of the confidence that
manufacturers have in the future of the economy, because it indicates the
willingness or otherwise of businesses to invest in productive capacity. Consumers
too, only spend on large ticket items if they feel confident enough to either
take out a loan or to dip into their savings.
As with alls reports, however, it is the trend, month on month and year
on year that is most significant in terms of validity in making trading
decisions.
The Fed will be watching, of course. They will factor this month’s
durable good report figures into their models to determine whether or not
economic growth is such that it is safe to start to unwind Quantitative Easing
(QE). Therefore you can rely on it that the hedge funds and institutions that
move the FX markets will also hold off on trading decision today until the
report is to hand.
It is also of significance that the US housing figures are also due out
today. This is effectively a major durable good, although it is dealt with in a
separate report.
Thats really informative and interesting to know thanks.
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