What Happens to EUR/GBP When Durable Goods Orders Plummet?
What happens when durable goods orders plummet? Capex signal, manufacturing weakness, and investment cycle implications.
How EUR/GBP Responds
Scenario Background
Durable goods orders measure new orders placed with US manufacturers for long-lived items (machinery, transportation equipment, computers, appliances). Core capital goods orders (ex-defense, ex-aircraft) are the cleanest capex signal, while headline orders include volatile aircraft categories that can swing prints significantly.
Read full scenario analysis →Historical Context
Durable goods orders have seen sharp declines during every recession: 2008-2009 (peak -40% YoY), 2020 (-60% in April), and 2001 (peak -25%). Post-COVID orders have been elevated due to pent-up demand, supply chain catch-up, and AI-related capex (semiconductors, data center equipment). Core capital goods orders have been particularly resilient in 2023-2024.
What to Watch For
- •Core capital goods orders YoY turning negative
- •ISM Manufacturing new orders below 45
- •Business investment in GDP data turning negative
- •Capacity utilization declining below 76%
- •CEO confidence surveys declining sharply
Other Assets When Durable Goods Orders Plummet
Other Scenarios Affecting EUR/GBP
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