On Tuesday we experienced two highly important data releases that came from States. Namely, annualized Gross Domestic Product in the third quarter and also annualized Existing Home Sales.
Issued GDP turned out to be the highest for the prior three months. 2.5% in comparison with 2.3% expected and 2.0% previous. It is important to notice that explicit contrast between released GDP and both forecasted and previous, shows an important improvement of pace of U.S. economy recovery. Change was mostly driven by growths in consumer spending, government expenditure and export. On the other hand Existing Home Sales (Home Resales) release was worse than previous value and near to expected values set by surveys. Ongoing decline in existing home market lasts since November, 2009.
Interesting but no so crucial for U.S. economy were FOMC Meeting Minutes, which provided us with a glance at overall atmosphere during conducted three weeks ago FOMC officials gathering. Analysis of minutes provides us with insights that QE2 will be maintained and that majority of participants of meeting is concerned about GDP and employment figures.
Comprising the list of Wednesday’s bad releases, the Core Durable Goods Orders (excluding volatile and thus likely to distort underlying value transportation industry) were considerably worse than both expected and previous value. -2.7% in October, in comparison with 0.7% forecasted and 1.3% previous. What is more concerning, decline of orders was driven by mutual drop in virtually each of sectors. This issued that in October almost none of sectors was sound, which may in future slacken demand. It is also important to notice that transportation industry orders dropped as well. Rather sharp drop down in October was also recorded in the New Home Sales. This data is in line with ongoing recession in the building industry and released on Tuesday Existing Home Sales decline. Median new home price dropped to seven-years-low in October, as well. More optimistic for U.S. economy was released on Wednesday (due to bank holiday) Initial Claims. 407,000 of those who filed for unemployment benefits was the lowest figure since July 2008. Sharp surge in Jobless Claims is in line with enduring job market recovery.
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