On Friday, the US Core Durable Orders release for the month of July came up much lower than expected. The release was expected to be a print of 0.5% but came out as a weak print of -0.4%. The Census Bureau announcement pushed the risk appetite lower as the stock markets and risk currencies fell. However, by the end of the session on Friday we saw the risk assets around the world rise in value after Ben Bernanke told Congressional leaders in America that the scope of monetary policy is still available for the Federal Reserve to use. The markets read this as a hint that QE3 is coming in September.
The truth is that this announcement is just the latest in disappointing numbers. When you look around the world, it appears that economies are slowing down on all continents. The Chinese have been showing weak numbers as well, and the slowdown in the United States would be punishing for global trade as it has been an outlier in the currently weak environment.
The lack of durable orders suggests that manufacturing is slowing down, which of course will lead into less employment, and obviously exports for the Americans. With this being said, the case for QE has yet another advocate.
U.S. Core Durable Orders Disappoint
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.