The annual pace of new home sales in the US stands at 369K .Early expectations stood on 347K, so this is quite a positive surprise. The rise from the previous month is an impressive 7.6%. This is a two year high.
The initial report for last month showed a rise to 343K from 322K beforehand. So, also the trend is positive.
Housing continues to stabilize in the US. EUR/USD is ticking higher and so is USD/JPY – a “risk on” reaction.
The situation of the housing sector is one of things topping the Federal Reserve’s agenda. Buying more Mortgage Based Assets as part of QE3 was on the cards.
The chances are lower now.
Recent building permits numbers also support the positive trend, although existing home sales didn’t rise.
The Fed recently decided on extending “Operation Twist” but refrained expanding its balance sheet. While the door is still open, chances are falling as time passes by.
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