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Risk-off conditions weighed on the dollar through the N.Y. morning session on Monday, though the unit bounced some following the London close. USD-JPY remained heavy into the close however, printing 100.25 lows. EUR-USD topped at 1.1279, though eased back under 1.1260, with the announcement of Italy's constitutional referendum (December 4) prompting some position squaring. Read more
Normally the most reliable indicator for the housing market is permits, because it tends to slightly lead starts, and is much less volatile. Because of distortions in May and June 2015 all due to NYC, it has not been the case since then (although it should become more reliable again by next year, and the distorted YoY comparisons fade): New home sales have more often than not peaked before housing permits, but they too are more volatile and often heavily revised: So this morning's report on new home sales is particularly helpful. Read more
OVERVIEW Due to concerns over the Deutsche Bank’s financial health, shares across Europe have fallen. Germany's IFO Institute reported that companies were "clearly more optimistic" in September as their business climate index rose to 109.5, it’s highest since May. Bank of Japan Governor Kuroda said that the bank is ready to use every available tool to achieve its 2% inflation target however, a stronger Yen continues to act against their efforts. HIGHLIGHT The Pound is under pressure again as the negative risk sentiment fuels concerns over the recent Brexit-related headlines, sending the Pound down towards post-Brexit lows. US DOLLAR The Dollar is slightly weaker as investors position themselves cautiously ahead of tonight's first presidential debates. Read more
The dollar traded generally weaker, losing over 0.5% to the yen, which outperformed amid a risk-off backdrop. USD-JPY fell to a 100.38 low, and EUR-USD a two-session high of 1.1281, aided by a much stronger than expected September German Ifo business expectations survey. Read more
The dollar has been trading generally softer in pre-European trade so far today. This follows the Fed signalling last week that prospects for a monetary policy tightening are further down the road than markets had been anticipating. USD-JPY edged out a two-session low of 100.70, and EUR-USD a two-session high of 1.1241. Read more
Currently, the NY and Atlanta Fed are predicting 3Q GDP growth of 2.3% and 2.9%, respectively. At Wednesday’s meeting, the Fed released their latest GDP predictions, which projected 1.8% growth in 2016. This is .2% below their June projections. Read more
Housing dominated this week's news. On Tuesday, the Census reported that housing permits were down .4% M/M and 2.3% Y/Y. The same report showed housing starts decreased 5.8% M/M and rose .9% Y/Y. But the longer trend for both shows a relatively stable state since early 2015: On Thursday, the NAR reported that existing home sales declined .9% M/M but were up .8% M/M. Read more
What’s behind the weak global trade situation? Both the EU and OECD attempted to answer that question this week, with each institution releasing a study on the topic. The EU argued there were several factors, starting with a changing composition of global trade elasticities: Shifts in the global trade elasticity can reflect both changes in individual country elasticities and the change in the relative weights of each country within the global aggregate. Read more
August data included a decline in the index of Leading Indicators, due to the poor ISM manufacturing index and manufacturing work hours. Housing starts increased, but permits and existing home sales decreased. My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. Read more
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New home sales have more often than not peaked before housing permits, but they too are more volatile and often heavily revised:
So this morning's report on new home sales is particularly helpful.&p[images][0]=/s3/files/styles/large/s3/image_800.jpg?itok=CuORnG9C){kind=link}
