Durable goods orders held back by autos

Wells Fargo Research Team Wells Fargo

Durable goods orders rose just 0.4% in August as the pent up demand in the auto sector is showing some signs of exhaustion. The slowdown in core orders was more gradual and shows the capex recovery continues.

Auto Orders Retreat After Early Summer Surge

Durable goods orders slowed sharply in August, increasing just 0.4% after an upwardly revised gain of 11.7% in July. The downdraft stemmed in part from a 4.0% drop in motor vehicles as pent up demand from shutdowns shows signs of exhaustion.

Nondefense capital goods orders ex-aircraft (core orders), however, posted a better-than-expected gain of 1.8% on top of an upward revision to July.

Core Orders Point to Capex Recovery Continuing

The rise in core orders suggests that while slowing, the recovery in capex is not screeching to a halt and starting from a better place. Gains are also broadening beyond tech-related orders.

Nondefense capex shipments jumped 3.3% in August. Through the first two months of Q3, the series is up at a 33% annualized rate and signals equipment spending will be a key contributor to the third quarter's bounce back in GDP.

Download The Full Economic Indicators

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.