US: Trade balance and factory orders in focus - Nomura

Analysts at Nomura forecast US economy to post a trade deficit of $42.3bn for September and suggest that factory orders in September will likely indicate sustained momentum.

Key Quotes

“The advance estimate of the trade deficit for September came in at $64.1bn. Goods exports increased decently by 0.7% m-o-m but were outpaced by goods imports. It appears that much of the adverse impact from the recent hurricanes dissipated. However, much of the increase in exports was driven by firm increases in export prices, suggesting that there still may have been some lingering effect. On the service side, we expect trend-like gains in both service imports and exports. Altogether, we forecast a trade deficit of $42.3bn for September.”

“Factory orders: In an advanced reading, durable goods orders increased strongly in September with strength in the underlying components. A strong jump in nondefense aircraft orders contributed much of the upside surprise. Consistent with the strength in early durable goods orders data, factory orders in September will likely indicate sustained momentum in the industrial sector heading into Q4.”