US stocks managed to squeeze out some gains despite further signs of the US housing market remains weak ahead of key official reports this week. The US Housing Market Index failed to meet estimates dropping 2 points to a level of 14 from an expected and previous level of 16. Nevertheless, despite a lack of conviction the The DOW and S&P rose 0.56 and 0.60 percent respectively.
US investors are keenly awaiting key housing data which is expected to show growth in the housing sector which remains a primary hindrance on sustained US recovery. Quarterly earnings will also be released from financial heavy weights Goldman Sachs and Morgan Stanly. Tech bellwether Apple will also release Q2 earnings.
Across the Atlantic, Ratings agency Moody’s cut Ireland’s debt rating from Aa2 to Aa1. According to Moody’s, the debt rating downgrade was in response to Irelands “gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,
The Aussie dollar remained fairly directionless, albeit composed at the top end of 86 US cents. At the time of writing the Aussie is buying 86.8 US cents – price action in the domestic session is likely to be governed by the release of the the RBA minutes for the July meeting.
The statement released after the meeting showed the RBA’s view of the global economic outlook was less dovish than anticipated. The RBA kept benchmark rates at 4.5 percent “pending information about international and local conditions for demand and prices” – In a statement governor Glenn Stephens acknowledged potential headwinds abroad (in reference to Europe’s uncertain economic outlook and employment woes in the States) however, the bank also suggested local growth is likely to remain about trend going forward. On China, the statement said “There are indications that growth in China is now starting to moderate to a more sustainable rate.”Reserve Bank governor Glenn Stevens will also give a speech in Sydney today entitled Some Long Run Effects of the Financial Crisis.