Halister News

(Bloomberg) -- April durable goods orders may become market moving, with Fed speakers highlighting need for improved activity data, Citigroup head of G-10 FX strategy Steven Englander writes in note received today.

• Greater chance of a June/July hike could translate into higher probability of two Fed hikes this year
  • This could be challenging for EM, but stronger U.S. growth is ultimately more reassuring for global asset markets than weak growth
• Market expectation is for modest rise in orders
  • Median estimate in Bloomberg survey is +0.5%
  • Citigroup economists see much better outcome of +2.5%, driven by survey indications, lagged effects from USD softness and strong aircraft orders
• When Fed speakers talk of “data quality” they are looking squarely at housing, which has been doing fine, and investment, which has not
• Fed officials would like to see some sign of stronger investment, both as a mechanical plus for GDP and to reassure that businesses see some hope for the future
• EUR/USD steady at 1.1137
• USD/JPY up 0.2% to 110.15