Release Explanation: A monthly report on home prices with mortgages backed by Fannie Mae and Freddie Mac released by the Office of Federal Housing Enterprise Oversight. Important since the housing market is included in most economic forecasts. Retail Sales, CPI, and PCE in the US. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the US consumer. There is a very strong impact on the sentiment towards the US Dollar from this report.

Trade Desk Thoughts: U.S. home prices rose 1.7% on a seasonally-adjusted basis in January, the Federal Housing Finance Agency said today. Economists had expected to see a 0.2% decline for the month. December’s previously reported 0.1% increase was revised to a 0.2% decline. For the year to January, U.S. prices fell 6.3%. Prices have now fallen by 9.6% from the peak in April 2007.

Prices rose or were flat in eight of nine regions in January; only the Pacific states registered a decline, down 0.9%. Prices rose 3.9% in the East North Central region, which includes most of the Great Lakes states. Prices rose 3.6% in the South Atlantic region (from Delaware to Florida).

In the past year, prices are down in all nine regions, led by the Pacific with a 21.1% decline. The smallest price decline has been the 0.4% drop in the West South Central (which includes Texas, Oklahoma, Arkansas and Louisiana).

Forex Technical Reaction: The S&P 500 was declining by just over 1% after Monday's huge increase and the dollar was lately trading relatively flat against the majors although it was higher on the day.