BUNDS: Bund jumps 17 ticks on the Trump Tariff post

December's advance durable goods report was solid overall, despite a large miss in the headline orders figure (-2.2% M/M vs +0.6% expected, prior rev -2.0% from -1.2%).

• That's because the miss was driven by a further drop in new orders in the extremely volatile nondefense aircraft and parts category (-45.7% M/M, after -20.1% in November), for the lowest level of orders in the category since December 2020 when excluding the one-off net negative figure in June 2024 due to Boeing order cancellations. Industry reports suggest that Boeing net orders were weak in December as well.
• Indeed the core figures were stronger than expected: ex-transportation durables orders were in line at +0.3% (-0.2% prior), but the capital goods orders growth of  0.5% (0.3% expected) especially impressed on a big upward revision to prior (0.9% vs 0.4% initially reported). Core shipments rose 0.6% (0.2% expected), up from 0.4% prior (upwardly rev from 0.3%).
• Ignoring aircraft orders for a moment, the report suggests rising momentum in capital equipment spending. It's been the most solid 2-month period for core capital goods orders since late 2022/early 2023, with the 3M/3M SAAR pickup to 3.8% a 27-month high and the 5th consecutive monthly acceleration.
• Core shipments were the strongest in 11 months, with the Y/Y (+0.7%) a 10-month high and momentum picking up to 3.0% (3M/3M SAAR, a 22-month best).
• The "soft" data (including improving ISM and S&P Manufacturing PMIs, and regional Fed manufacturing surveys) have been pointing to a stabilizing manufacturing sector for a few months now (albeit from soft levels), and the durable goods orders data appear to be "hard" data pointing in a similar direction.
• That bodes well for business capex going into 2025, and suggests that the broader economy may be regaining some momentum.

OI data points to net short cover in most SONIA futures during Monday’s rally, as core global STIR curves reacted to DeepSeek’s AI advances, experiencing dovish repricing alongside a bid in wider core global FI markets.

• Only limited rounds of net long setting were seen through the blues.

• MNI: US REDBOOK: JAN STORE SALES +4.5% V YR AGO MO
• US REDBOOK: STORE SALES +4.9% WK ENDED JAN 25 V YR AGO WK