US new home sales jump 9.6% to 468K. This is a big positive surprise that contradicts all the bad weather explanations. The annualized number of new home sales in the US was expected to slide from 414K to 406K in January. Sales of new homes are only a small part of the real estate market, but a sale results in a lot more economic activity than one of an existing home. Good news comes also from the previous figure: January’s number was revised up to 427K.
The safe haven dollar and yen were strengthening towards the publication, mostly on events in the Ukraine. EUR/USD lost the 1.37 level, GBP/USD dropped to 1.6650 and USD/JPY is down to 102. This is a “risk off” environment. The US dollar is now stronger across the board, including against the yen.
Is the US economy economy coming out from the storm or is this an outlier? It is still hard to tell. With more bad weather in February, it is hard to say when exactly we will get “clear” data. Perhaps only data for March released in April could give straight answers. But, this will be after the FOMC meeting, which is likely announce another tapering of QE.
The bigger economic figures are scheduled later in the week, with the revision of US GDP standing out.
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