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The number of unemployment claims in the US ticked up from 364K (revised from 361K) to 366K. Expectations stood on 365K. So, no big surprise here. Continuing claims dropped from 3.336 to 3.305 million, also within expectations of 3.3 million.

Housing starts slightly disappointed and slid to 746K from 754K last month and expectations for 757K. On the other hand, building permits rose to an annual level of 812K, from 755K last month and a consensus of 770K – this is a significant improvement. Building permits are the highest since August 2008 – just before Lehman.

EUR/USD is  reacting  positively to this data rising above 1.23. USD/JPY also ticks up. It reached 79.40 before retreating.

All in all, the positive news triggers a “risk on” reaction: a weaker dollar and even weaker yen – no flight to safety right now.

With stable jobless claims at levels seen early in the year, and housing recovering after hitting a bottom, the incentive for more QE fell again. What could support QE3 is the inflation data from yesterday, showing another slowdown in price rises. Also manufacturing is quite weak.

However, other US figures such as retail sales and the recent NFP are positive.

Next up: The Philly Fed index for the manufacturing sector. See how to trade this event with USD/JPY.