US Existing Home Sales disappoints as purchases unexpectedly fell for the first time since March, pointing to a slower recovery in the housing sector.

  • Purchases dropped 2.7% in August to a 5.1 million annual rate, the second highest level in the last 23 months according to the National Association of Realtors.  Existing home sales were forecast to rise to a 5.35 million annual rate.  On the brighter side, unemployment claims dropped last week to 530,000, the lowest level in two month, signaling the job market is healing.
  • The sterling falls to 5 month lows reaching 1.5915 from 1.6385, yesterday's high.  Pound's initial support from the lack of discussion among MPC members on current levels of QE and deposit rate disappeared following BoE Governor King's comments.  He reiterated that a weaker pound is 'helpful' to rebalance the UK economy towards a focus on exports.
  • The Euro tumbled after hitting the 1.48-level, as the market stated selling euros at a strong pace, breaking through a support trend-line that has been solid for the past two weeks.
  • The German Ifo business climate rose from 90.5 to 91.3 in August versus expectation of 92.1.  According to the Ifo President, Hans-Werner Sinn, appraisals of the business situation and outlook have improved.  However, by far the greater number of firms still assesses the business situation as poor.
  • Crude oil fell to a one-month low to $65.55 a barrel causing the Canadian dollar to slide the most in two month.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.4665 with a preference to enter into long positions at 1.4675
  • The GBPUSD pivot point is at 1.5950 with a preference to enter into long positions at 1.5960

Today's calendar and market movers:

  • US Durable Goods Orders month on month expected to drop to 0.5%
  • Revised University of Michigan Consumer Sentiment expected to post 70.3
  • US New Home Sales expected to rise to 440,000

Stocks:

  • Wall Street drifted lower, Dow -0.42%, S&P -0.95% and NASDAQ -1.12%, as signs of weakness in the housing sector and investors' worries that policy makers might be curbing stimulus efforts too soon.
  • As of 06:00 GMT the Nikkei is trading at -2.64% and the Hang Seng at -0.56%.