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XE Market Analysis: Asia - Aug 26, 2016

By: XE Market Analysis

Markets were jerked around following Fed chief Yellen's Jackson Hole Speech, and subsequent comments from Fed VC Fischer. Yellen indicated the case for a rate hike had strengthened, while at the same time said inflation targets wouldn't be met for "the next few years". Read more

XE Market Analysis: Markets Pause for Fed Chair Speech

By: xemarketanalysis

OVERVIEW Typical quiet August trade has been amplified as market participants sit on their hands, waiting to hear what FED Chair Yellen has to say this afternoon. UK GDP reported a solid 2.2% growth year-over-year, more evidence of a strong economic data post Brexit vote. Japanese CPI falls to 0.5% against the expected 0.7% figure. Read more

XE Market Analysis: North America - Aug 26, 2016

By: XE Market Analysis

Languid summertime trading, exacerbated by the closing proximity of Fed Chair's Yellen speech today, continued. USD-JPY has remained in a tight orbit of 100.50, largely unmoved by Japanese inflation data which showed the BoJ-targeted core CPI reading fall to 0.5% y/y, below the median for an unchanged reading of -0.4% and the lowest rate in three years. Read more

XE Market Analysis: Europe - Aug 26, 2016

By: XE Market Analysis

Lackadaisical trade continued in the forex majors, with summertime conditions exacerbated by the wait for Fed Chair Yellen's keynote address later today. USD-JPY has remained in a tight orbit of 100.50, largely unmoved by Japanese inflation data which showed the BoJ-targeted core CPI reading fall to 0.5% y/y, below the median for an unchanged reading of -0.4% and the lowest rate in three years. Read more

XE Market Analysis: Asia - Aug 25, 2016

By: XE Market Analysis

FX trade was sluggish in N.Y. on Thursday, as the market girded for Fed Chief Yellen's Jackson Hole speech on Friday morning. A sharp rebound in durable goods orders, along with an in-line weekly jobless claims outcome gave the greenback a modest boost, though ranges overall were very narrow. Read more

XE Market Analysis: Brexit Hits German Business Morale

By: xemarketanalysis

OVERVIEW Germany's ifo business climate index fell unexpectedly to 106.2 in August from 108.3 in July, the steepest monthly decline since the Eurozone debt crisis in 2012. U.S. existing home sales fell 3.2% in July to 5.39 million units which was more than forecast however, prices continued to increase, rising 5.6% year-on-year. The Confederation of British Industry said its retail sales volume index rose to +9 in August, its highest since February. HIGHLIGHT The closely watched ifo economic institute's index fell to its lowest since February against expectations for a slight increase to 108.5. Read more

XE Market Analysis: Asia - Aug 24, 2016

By: XE Market Analysis

FX trade remained relatively quiet in N.Y. on Wednesday, as a combination of the Summer doldrums, and Friday's Yellen speech kept traders near the sidelines. The greenback perked up some in morning dealings, allowing EUR-USD to dip under 1.1250 before reversing to 1.1270. Read more

Housing heated up in July

By: New_Deal_democrat

It's time for my monthly look at housing, which is the most important long leading consumer sector in the economy -- and the news is almost completely positive. To begin, let me repeat the general paradigm: - interest rates lead housing sales - housing sales lead prices - prices lead inventory Interest rates have fallen in 2016 to near their 2013 lows: Unsurprisingly, new home sales have made several new highs, including a near 9 year high in yesterday morning's report for July -- but keep in mind that this report does get heavily revised: Since new home sales are usually the first housing metric that peaks, this suggests that a recession is at least more than one year away. Interestingly, even when we subtract the northeast region that includes New York (subject of 2015's distortion), permits have still gone sideways: A comparison shows that single family permits (blue) have also gone sideways this year, while multi-family permits (red) have been very volatile, and have not approached their mid-2015 high (which was the big NYC distortion): But housing starts show the actual economic activity, and these (blue in the graph below) have been in a slowly rising trend: While new home sales and housing starts have shown increases, housing prices are still going sideways: and although I won't show a graph, July 2016 prices were actually slightly lower than prices 12 months ago. Meanwhile inventory has actually turned down slightly in the last few months: When we put hew home sales (blue), prices (red), and inventory (green) all together, normed to 100 at the end of the last recession: we see that - sales started up in the beginning of 2011, hit plateaus in 2014 and 2015, and have started up again in the last few months - prices started up at the end of 2011, and have been flat ever since late 2014, and - inventory started up in mid-2012, and has continued to increase until plateauing and turning down slightly this year. Most importantly, the decline in interest rates should continue to fuel improvement in sales. Read more

XE Market Analysis: SA Rand Slumps Amid Spy Scandal

By: xemarketanalysis

OVERVIEW The South African Rand fell to its lowest in a month after another finance ministry scandal. U.S. new home sales had an unexpected jump of over 12% in July driven by surging Midwest sales. German GDP data for the second quarter showed the 0.4% rise was driven by exports, higher state spending, and private consumption as investment remained sluggish. UK mortgage approvals from the British Bankers Association fell to 37.6k in July, their lowest in eighteen months but broadly in-line with market forecasts. HIGHLIGHT The South African Rand has fallen by almost 5% against the US Dollar – its lowest in a month - as trouble reemerged in the beleaguered finance ministry. Read more

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