US DATA: Softer Durables Revisions Don't Dispel Positive End-2024 Momentum
Factory orders were slightly disappointing in December, contracting by 0.9% M/M (0.1pp more than expected), with November's revised down 0.4pp to -0.8%. The ex-transport orders figure was better however, showing growth of 0.3% vs 0.2% in Nov. The durable and capital goods components of the report were little changed from the advance release (overall durables orders -2.2% unch, ex-transport 0.3% unch, core cap goods orders up 0.4% vs 0.5% advance / core cap goods shipments up 0.5% vs 0.6% advance).
- While this was a 4th contraction in 5 months for factory orders, with momentum appearing to slip again (3M/3M SAAR at -3.1%, weakest since March 2024) and the level of orders below mid-2023 levels, overall we continue to see green shoots for manufacturing. That's evident in the ex-transport orders figure which remains heavily influenced by volatile components such as aircraft (-45.7% M/M, which looks largely due to poor Boeing net orders).
- It's also evident in the durable goods orders, even if the downward revisions show slightly less momentum than previously thought. Core capital goods rising 3.3% 3M/3M SAAR (3.8% pre-revision) with shipments up 2.4% (3.0% pre-revision) and both categories rising Y/Y suggests improving dynamics.
- Survey data, including this week's expansionary ISM for January (with strong New Orders), continue to point to a stabilizing manufacturing sector going into 2025, and the durable goods orders/shipments provide some of the initial "hard" data pointing in a similar direction.
- Of course there are countervailing risks, including on tariffs (which may actually have helped boost factory numbers in late 2025 amid front-running), but overall the data bode well for business capex going into 2025 amid signs the broader economy could be regaining some momentum.
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JGB TECHS: (H5) Returns Lower
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.12 @ 15:01 GMT Jan 03
- SUP 1: 141.65 - Low Dec 30
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed and are yet to fully recover, touching 141.65 on the way lower. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.56, a Fibonacci projection point on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
USDCAD TECHS: Bull Flag Highlights A Clear Uptrend
- RES 4: 1.4669 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4392 @ 15:50 GMT Jan 3
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4307/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD is unchanged and bulls remain in the driver’s seat. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4307, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Southbound
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6408 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6247/6282 High Dec 30 / 20-day EMA
- PRICE: 0.6204 @ 15:21 GMT Jan 3
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A bearish trend condition in AUDUSD remains intact and the pair continues to trade closer to latest lows. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6282, the 20-day EMA.
