EURUSD, 1hr
The U.S. durable goods report undershot assumptions due primarily to a weak round of equipment figures, alongside a small March durable orders rebound despite a defense orders surge with a slight drop ex-transportation, alongside the expected small shipments decline with a restrained inventory figure. We lowered our Q1 GDP growth forecast to a flat figure from 0.3% with a 6% (was 4%) contraction rate for real equipment spending, alongside an $11 (was $5) bln inventory subtraction. We expect a still-lofty $67 bln Q1 inventory accumulation rate that will weigh on Q2, where we now expect 2.0% (was 2.2%) GDP growth with a 4% (was 6%) bounce in equipment spending and a $20 bln inventory subtraction. We expect a flat March factory inventory figure with a 0.1% total business inventory rise, given today’s flat factory durable inventory figure. We assume a 0.1% March factory orders rise with a 0.5% factory shipments decline, given an assumed 0.5% nondurable shipments and orders drop.
EURUSD rallied higher from 1.12870 to 1.1334 and GBPUSD rallied from 1.4560 to an 11 week high at 1.4622.
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