The housing start report for the month of April is awaited impatiently, as the ideology in markets and for officials is that unless the housing market finds the desired bottom the downside effects to the financial crisis and the economy are to resume as well.
Expectations are that builders have attributed with the slowest pace in 17 years as housing starts are expected to fall further to 935 thousand on an annual pace according to median estimates after 947 recorded in March. While building permits which is the gauge of future performance for the sector probably have dropped to an annual of 915 thousand after 927 thousand recorded in March.
The problem is stemming from that sector as it was the base from where the problem escalated. The financial crisis began after the credit meltdown was pushed by defaults on loans and escalating housing market troubles which is what as we know is as the subprime mortgage collapse.
US officials are working at arms length to contain the contagion which has already spread into the economy. They are aiming to secure citizens in their homes and not be facing more homelessness as foreclosures are still high and defaulting on mortgages are still present which is further ache to consumers and the banking sector which is as we know suffered major losses correlated to the credit meltdown.
So the confidence and activity needs to be restored in the economy and the sector in specific and the start to be is to create a bottom. Confidence is a concept that analysts differ upon its actual correlation to consumer behavior and spending pattern yet still markets do take it much into consideration. May's preliminary Michigan Confidence is expected to continue to slow to least in almost 26 years at 62.0 after 62.6 in April.
So the trend today and the dollar's trend is to be defined by the data especially as we head to the weekend and squaring will already be in action. So the sentiment is to be locked especially as the Feds actions are still very speculative since they are worried now about price stability yet inflation indicators and especially the CPI easing provided the room for markets to take advantage of the possibility that if growth is to further deteriorate they will act in a firm and timely manner. So stay tuned and hold your horses until you actually set your mind to the weekend and for that we say WE CAN'T WAIT FOR THE WEEKEND TO BEGIN