US data looks good: new home sales are up 3.5% to 592K in June from an upwards revised 572K in May. The figures are annualized. Consumer confidence is at 97.3 points in July, better than expected albeit similar to a downwards revised figure of 97.4 for June.
The US dollar is slightly stronger after the publication.
Earlier, Markit’s flash services PMI for July disappointed with only 50.9 points against 52 expected.
Sales of new homes were expected to rise by 1.6% to 560K in June. May saw 551K (before revisions). The Conference Board’s consumer confidence measure carried expectations for a drop from 98 to 95.9 in July.
Sales of new homes trigger wide economic activity, much more than existing, second-hand homes. Those existing home sales beat expectations.
The US dollar was on the back foot prior to the publication. This was clearly evident against the yen. Markets are bracing themselves for a disappointment from the BOJ amid talk of only a small stimulus package.
Also, the pound, that suffered some worries about cuts, is bouncing back up.
The big events are yet to come: durable goods orders tomorrow serve as a warm up to the Fed decision. In addition, the US releases the first GDP numbers for Q2 on Friday.
More: FOMC Previews
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