Release Explanation: Annualized number of existing residential buildings that were sold during the previous month, excluding new construction. They include both quantity and price statistics. 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: Existing homes sales rose 6.5% in December to a 4.74M annual pace, the National Association of Retailers said today, boosted by the biggest slump in prices since the great depression. Economists had expected to see a 4.4M annual rate in December.
The news here is good on two fronts, said Matthew Carniol, chief currency strategist at TheLFB-forex.com. Prices seem to fallen enough to attract some decent buying interest and inventories decreased sharply.
Sales were down 3.5% compared with a year earlier. Resale's averaged 4.91M in 2008, down 13% from 2007 and the fewest in 11 years.
The inventory of existing homes fell 16.9% to a 9.3 month supply at the current sales pace, down from 11.2 months in November. The median price of an existing home fell 9.3% in 2008 from the prior year, the biggest decline since records began and the biggest since the Great Depression.
Resale's of single-family homes increased 7% to an annual rate of 4.26M. Sales of condos and co-ops rose 2.1% to a 480,000 rate.
Forex Technical Reaction: The dollar has been weakening overnight against the euro, pound and aussie, and the S&P opened about 1% higher on the day. After the report the dollar retraced slightly, and the S&P jumped to better than a 2% gain.