Existing Home Sales in the U.S. plunged according to Tuesday’s report and this confirmed ‘whispers’ that had surrounded the number before its release. The USD traded in a stable manner against the EUR and GBP yesterday and held onto its gains made earlier. Wall Street declined before the issue of the housing figures and equities essentially moved cautiously thereafter. Today New Home Sales statistics will be published and an outcome of 333k is anticipated. Also Core Durable Goods Orders will be brought forth, but investors will keep their eyes glued on the housing sector data. Yesterday proved that investors seemed to know that the bad result was coming as they participated in an early sell off in equities. Tomorrow weekly Unemployment Claims figures will be released and its numbers the past month have cheered very few.
The U.S. government essentially proved that their policy, which included tax breaks for first time home buyers that came to an end the month before, merely delayed more pain in the housing market. Not only do questions continue to be raised about housing and employment, but this coming Friday the Revised GDP will be brought forth and it stands to reason that investors will be nervous about this too. In the past few weeks a growing chorus of market participants has openly expressed their fear that a double dip recession is just around the corner. Optimists seem to be in short supply and while some are pointing to ‘cheap’ prices on Wall Street for well known equities, others are simply asking where growth is going to come from. The USD is trading in its ‘traditional’ safe haven mode and given the amount of lackluster sentiment in the broad markets it may continue to find backing.
Written by bforex.com