Another good day of data form the US: new home sales beat expectations and rose to annual level of 504K, a jump of 18.6%! It is the highest monthly gain since 1992. Consumer confidence jumped to 85.2 points. The dollar is slightly stronger, unable to make a big gain despite a second day of upbeat housing data.
Sales of new homes were expected to rise to an annual level of 442K in May from 433K in April (now revised down to 425K, making the jump even bigger). The Fed has recently expressed worries about the state of the housing sector recovery. The CB Consumer Confidence indicator was predicted to advance from 82.2 (83 points originally reported) to 83.6 points in the current month of June. Consumer confidence is now at the highest level since January 2008.
Towards the publications, EUR/USD traded on higher ground, at around 1.3620, GBP/USD still suffered the dovish U-turn from Carney and dropped below 1.70, and USD/JPY was under the magnetic level of 102. Also USD/CAD is moving higher after the publication.
More data: the strongest jump was recorded in the Northeast. Monthly supply is down from 5.3 in April to 4.5 months in May, the lowest since May 2013.
Only the second tier Richmond Fed Manufacturing Index disappointed with a drop from 7 to 3 points in June.
Sales of new homes are the minor part of total sales. However, the sale of every new house triggers wider economic activity, such as the construction of roads, schools, etc.
Today’s S&P Case Shiller Composite 20 HI showed a weaker than expected annual rise in prices: 10.8% for April instead of 11.7% expected and 12.4%. On a monthly basis, prices fell according to this highly regarded survey. The official House Price Index for April remained flat, less than a rise of 0.6% expected on a monthly basis.
Yesterday, the US reported that the sales of existing homes jumped by 4.9% to 4.89 million (annualized), beating early expectations. So all in all, we have a slowdown in price rises together with more transactions.
Here’s a deeper look in the USDCAD ranges
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