Good News Bad Action - Add Short USD Positions

11:01: The dollar is trending lower. The euro will find support 1.2438 and 1.2414. See resistance at 1.2512 and 1.2546. Dollar has also turned lower against the yen. Major support is at 114.20 and 113.78. Interesting that the dollar cannot rally on the “strong” headline US data. This may be a bearish sign.

7:35: Strength is broad in the report. This is likely to push the Fed toward more aggressive rate hikes. This will hurt demand for the treasury auctions. However, do remember that the series went -8.9% in January, +3.4% in February, and 6.1% in March. The three month average is 0.2%. Few will look at it this way. By comparison, the average in Q4 was +3.63%.

7:33: Transportation was strong with vehicles and parts up 2.8%. Nondefense air was up 71.1%. Machinery (7.5%), primary metals (1.1%), and fabricated metals (1.3%) rose. Computers rose 7.5%, while electronic equipment fell 1.8%.

7:31: Capital goods excluding defense and aircraft rose 3.0%, but they were down 0.8% ad flat in January. Thus, there is some payback to weakness in January and February.

7:30: Durable good orders rise 6.1% and rise 2.8% excluding transport. Bearish bonds and bullish dollar at first blush.