Release Explanation: Annualized number of new single-family homes that were sold during the previous month 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. sales of new homes plunged to a record low in January, the Census Bureau said today in Washington.
Purchases fell 10% to a 309,000 annual pace, the lowest since records began being kept in 1963. The median price of a new home decreased by 13.5% to $201,100, the lowest level since December 2003. Sales of new homes were down 48% from January 2008.
A more foreclosures come onto the market, prices are likely to decline, said Matthew Carniol, chief currency strategist at TheLFB-forex.com. And as employment worsens, the number of foreclosures is likely to increase. According to a report from RealtyTrac last week, foreclosures rose 17.8% in the year to January.
Fed officials don't see labor markets improving until 2011. Fed Chairman Bernanke this week said the U.S. economy is in a severe contraction, and warned the recession may last into 2010 unless policy makers can stabilize the financial system.
The number of new homes for sale at the end of the month fell 3.1% to 342,000. Inventories rose to a record 13.3 months of supply at the current sales pace.
Sales of new houses decreased in three of four regions, led by a 28% plunge in the West. Purchases increased 13% in the Northeast.
Forex Technical Reaction: Equity markets were recently trading up 1.36% and the dollar was lower against the higher-yielders.