US DATA: Core Durables Goods Orders Chalk Up A Robust Q3
Core durable goods orders continued a string of solid readings in recent months with the preliminary September readings, pointing to decent momentum for production into Q4.
- Core durable goods orders were stronger than expected in preliminary September data, rising 0.9% M/M (sa, cons 0.3) after an upward revised 0.9% M/M in Aug (0.4) – all in nominal terms.
- That’s an impressive upward revision since the full factory orders August release, which had confirmed this print at 0.4%, was published just six working days ago in post-shutdown catch-up. It highlights the fluctuations that can continue to be seen as the data backlog is caught up on.
- A string of solid monthly readings for core orders sees them up 7.6% annualized in Q3, helping them hold around the 4% Y/Y mark for four of the past five months (using the seasonally adjusted data to allow for holiday and trading day differences).
- Core shipments meanwhile also increased 0.9% M/M (cons 0.2) after a not as weak as first thought -0.1% M/M (initial -0.4%).
- Shipments are tracking at 5% annualized in Q3 whilst the Y/Y continued its upward trend, hitting 4.1% Y/Y to catch-up with prior strength in core orders as would normally be the case.
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EQUITY TECHS: E-MINI S&P: (Z5) Starts The Week On A Bullish Note
- RES 4: 6953.25 2.000 proj of the Aug 1 - 15 - 20 price swing
- RES 3: 6912.25 3.000 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 2: 6900.00 Round number resistance
- RES 1: 6892.50 Intraday high
- PRICE: 6887.25 @ 14:49 GMT Oct 27
- SUP 1: 6812.25/6731.66 High Oct 9 / 20-day EMA
- SUP 2: 6645.22 50-day EMA
- SUP 3: 6540.25 Low Oct 10 and a key short-term support
- SUP 4: 6506.50 Low Sep 5
The trend condition in S&P E-Minis remains bullish and the contract is trading higher today, as it begins the week on a bullish note. The fresh cycle high confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on the 6900.00 handle next. Initial firm support to watch lies at 6731.66, the 20-day EMA. The 50–day EMA is at 6645.22.
US TSYS/SUPPLY: Preview Early Treasury 2Y Note Auction
Tsy futures are holding modestly lower/off lows (TUZ5 -1.75 at 104-10.5 vs. 104-10 low; TYZ5 currently -5 at 113-09 vs. 113-04 low) ahead of the $69B 2Y note auction (91282CPE5) at 1130ET, WI is currently running at 3.500%, 7.1bp rich to last month's sale.
- September recap: Muted Tsy react after the latest $69B 2Y note auction (91282CPB1) came out on the screws: 3.571% high yield vs. 3.571% WI; 2.51x bid-to-cover vs. 2.69x prior.
- Peripheral stats: Indirect take-up at 57.75% from 57.09 prior, directs recede to 30.77% vs. 33.16% prior, primary dealer take-up up to 11.49% vs. 9.74% prior.
US TSY OPTIONS: Midmorning Adds: 5Y Midcurve Put Condor, 10Y Spds
- 20,000 wk5 FV 108.75/109/109.25/109.5 put condors (exp 10/31)
- 7,646 TYH6 107.5/109/110.5 put flys ref 113-03
- 2,000 TYF5/TYG5 112 put spds, 13 ref 113-03
- 2,000 USZ5 118/119/120/121 call condors, 118-09
