Friday, 03 April 2015 06:48

Brief Note on U.S. Trade Balance

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We are expecting small correction in trade deficit for March. As reported in Factory Orders New orders for manufactured durable goods in March increased $6.0 billion, 2.6 percent to $234.8 billion.

Shipments of manufactured durable goods in March, up two consecutive months, increased $2.5 billion or 1.1 percent to $236.6 billion. New orders and shipment of transportation goods also increased second month consecutively by 4% and 1.1% respectively.

While in ISM released Manufacturing PMI new orders remain unchanged but exports grew by 1.5 percentage points. On the other side imports also increased by 3.5 percentage points.

Moderate commodity prices, especially energy commodity prices, are not likely to create major change in trade balance. S&P GSCI index for energy commodities fell from the month high of 348 to 330 in March.

We may see trade deficit near to $40 billion for March.

DXY index has weakened today before trade balance data. Strong gain in GBP after better than expected Service PMI and gain in EUR with all positive readings had pushed dollar index to 79.103. Little change in trade deficit not likely to support DXY. We may see the index near to 79.20 to 79.25 after the data release.

 

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