US: Durable goods orders likely to rebound in March - Rabobank

Sandeep Kanihama FXStreet Contributor

Rabobank analysts are expecting that the US durable goods orders are likely to show a rebound in March after a modest slowdown in February.

Key Quotes

“Since durable goods orders made a strong start in January, business investment is likely to make a positive contribution to economic growth in the first quarter. The Atlanta Fed’s GDPNow estimate of Q1 GDP growth (quarter-on-quarter, at an annualized rate) stood at 2.8% on April 19. Sometime after today’s durable goods orders the Atlanta Fed will publish its update of GDPNow. This will be the last nowcast before Friday’s (14:30 CET) official advance estimate of Q1 GDP growth by the Bureau of Economic Analysis (BEA). The current Bloomberg consensus forecast is 2.2%, somewhat lower that the Atlanta Fed’s estimate. However, we should keep in mind that the difference looks bigger in terms of the annualized growth rates used by the BEA.”

“The risk of a near term recession has fallen substantially and we expect the current economic expansion to become the longest on record in July.”

“Despite the stronger data the US treasury yield curve remains inverted at the 6 month- 5 year segment. This means that the curve continues to point to a recession in 2020. That’s why we expect the US economy to spend the second half of 2020 in recession and the Fed to cut rates in 2020, instead of another hike as implied by the dot plot.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.