US: Data point to stronger growth in Q2 – Nomura

Analysts at Nomura note that the advance US goods trade balance came in stronger than expectations, registering a deficit of $64.8bn (Nomura and Consensus: $69.0bn).

Key Quotes

“The data imply notably higher net exports in Q2 than we expected. The upside surprise was driven by strength in goods exports, which increased 2.1% m-o-m, while goods imports were up only 0.2%.”

“May durable goods orders fell 0.6% m-o-m, below our expectation but above market consensus (Nomura: -0.5%, Consensus: -1.0%), driven by sharp declines in orders for motor vehicles and parts as well as civilian aircraft.”

“Coupled with elevated trade tensions, weaker-than-expected shipments data indicate increased downside risk to equipment investment in Q2 and beyond.”