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Risk-on trade saw the dollar rally in N.Y. on Wednesday, taking EUR-USD briefly to lows of 1.3634 on rumored option backed selling from 1.3450. USD-JPY recovered nicely from its overnight three-month low of 100.82, coming close enough to hitting its downside target of 100.75, before trading up to 101.62 highs. Read more
This is the final installment of my more detailed look at the housing recovery. In part 1, I discussed how rising interest rates and rising prices have caused building of single family homes to stagnate for over a year. They are now 7% below their peak half a year ago. Read more
The USD lost ground to the outperforming GBP and JPY and was steady against the EUR. Cable surged around 70 pips to a peak of 1.6922 before settling around 1.6900. The move was sparked by U.K. April retail sales data, which smashed expectations at +6.9% y/y, the strongest y/y reading in a decade. Read more
USD-JPY dropped to a low of 101.13 after reversing from 101.39, which was seen in the immediate wake of the BoJ's decision to leave policy unchanged. Yesterday's three-month low at 101.10 has remained unchallenged so far. The BoJ's statement was largely unchanged, though there was an added optimistic note about capital expenditure. Read more
The dollar was mixed in very light N.Y. dealings on Tuesday, gaining modestly versus the euro, while losing some ground to the yen. EUR-USD spent much of its time under 1.3700, as sellers returned quickly on trips over the figure. USD-JPY held onto 101.20, though continues to look shaky. Read more
If the constructioin of single family homes has completely stalled for the last 16 months, apartment and other multifamily construction is on a tear. Here's the same graph comparing single family permits with multiunit permits that I started yesterday's post with, showing that literally all of the improvement in homebuilding since then has been in multifamily units of 5 or more, typically apartments and condominiums: In contrast to single family homes, apartment/condo building has completely recovered to its pre-Great Recession level: In fact, as this above graph shows, more multifamily permits were taken out in April than at any point in the last 25 years except for 3 months. Read more
The biggest mover in the Asia and European AM sessions was the AUD, which took a tumble following RBA Debelle's remarks that "lower capital inflows may result in a lower currency," and amid continued weakness in resource commodity prices. AUD-USD logged a two-week low of 0.9257 while AUD-JPY fell to a near two-month trough. Read more
JPY and AUD weakness was the main theme during pre-European trade in Asia. The yen weakened as stocks followed Wall Street's lead and rose. The Nikkei rose 0.8% as it rebounded from a one-month low, and most other regional bourses were higher, though China's Shanghai Composite was flat, failing to hold onto intraday gains as markets anticipate the prospect of about 100 initial public offerings that are due in the period from June to year-end. Read more
Based on the increase in interest rates last summer, by now I thought that housing in general would be down about -100,000 units a year. Although the housing market in general has slowed down, that hasn't happened, and the more volatile housing starts number showed a YoY increase of more than 20% YoY in April. When a forecast doesn't pan out as I expect, I try not to argue with the data. Read more
Based on the increase in interest rates last summer, by now I thought that housing in general would be down about -100,000 units a year. Although the housing market in general has slowed down, that hasn't happened, and the more volatile housing starts number showed a YoY increase of more than 20% YoY in April. When a forecast doesn't pan out as I expect, I try not to argue with the data. Read more
