EUR/USD tests the lows again. Finally.
By Ian McKendry
WASHINGTON (MNI) – Major U.S. housing indicators painted a bleak
picture of the market in February, but many economists believe a housing
rebound may not be needed for a broader economic recovery.
David Onyett-Jeffries, economist at RBC, told Market News
International Wednesday that “we are seeing a moderate pickup, but again
because the level of activity is so low it is not exactly going to have
any significant contribution to growth in the U.S.”
This is an opinion shared by Ian Shepherdson of High Frequency
Economics, who in a research note said, “We should make it clear that we
do not regard a rebound in home sales and prices as an essential driver
of broad economic recovery”
The expectation of economic growth without the aid of housing is
also evidenced in GDP projections. For example, against a backdrop of
oversupply, negative equity, tight lending standards and high
unemployment, the Blue Chip forecast for 2011 real GDP growth is +3.1%.
A U.S. Census Bureau report published Wednesday showed new home
sales were at record lows in February — falling 17% to a 250,000
seasonally adjusted annual rate.
This followed a disappointing existing-home sales report by the
National Association of Realtors Monday, in which existing-home sales
fell 9.6% in February to a seasonally adjusted annual rate of 4.88
million after improving in January and December.
However, RBC’s Onyett-Jeffries said the level of activity in the
housing market is at such low levels that even small changes can cause
big swings in the reports.
“We are bouncing along the bottom — the recent slew of housing
reports are not exactly great but they haven’t fundamentally changed our
outlook yet because our outlook is not overwhelmingly rosey,” he said.
A survey of 111 economists, real estate experts and market
strategist published Tuesday by MacroMarkets suggests housing prices are
unlikely to recover until 2013.
“Overall, the sentiment among our expert panel regarding the U.S.
housing market outlook continues to deteriorate,” Robert Shiller,
co-founder of MacroMarkets, said in a statement accompanying the survey.
The housing market is not necessarily going to be a drag on the
economy “and not going to be a huge boost,” Onyett-Jeffries said.
** Market News International Washington Bureau: (202) 371-2121 **
EUR/USD back above 1.4130, a minor rally. US stocks maintain their bid. All good in the neighborhood.
Do not think this move in EUR/USD means anything until we see levels above 1.4165. That would be a good size move relative to what we have seen so far today.
For all those who have posted comments that I was not able to approve or address, I apologize. I am new at this and only have two hands, one of which I wish had a beer in it at this time. I will not tell Jamie he has it easy anymore.
Maybe a little risk on as AUD pushes towards the highs. Makes sense as mining stocks are well bid.
The good…I can post anything I like as I will not be here tomorrow and lots of you think I am Jamie anyways.
The bad….the markets are not moving fast and even at this slow speed they make some of the posts you are composing irrelevant before you hit the publish key.
Another good….some of our more knowledgeable readers can keep me from straying too far if I do not know what I am talking about, sort of like my wife.
But definitely not an overreaction. Guess the Asian CB will have to wait to pick up some “weak” EUR’s. Overall, the afternoon nap continues. All the problems in the Eurozone cannot damage the good EUR.
At 3 PM EDT/1900 GMT. It is thought that he will have resignation in hand if vote goes as expected. This may have been baked in the FX cake and I will be disappointed. Not easy making money with no volatility.
–President Reported Preparing For New Election
LISBON (MNI) – Portugal’s President Anibal Cavaco Silva is prepared
to accept the resignation of Prime Minister Jose Socrates and is getting
ready to call an election to choose a new government, Portuguese daily
Jornal Publico reported on its website Wednesday evening.
The news comes as the Parliament nears the end of a debate on the
minority Socialist government’s proposed package of new austerity
measures amid strong signs that the bill will be defeated. Rejection of
the measures, which are strongly endorsed by Portugal’s European Union
partners, would amount to a vote of no confidence in Socrates’
Socrates is planning to meet with Silva at 19h00 GMT/1500 EDT, and
it is widely anticipated that he will tender his resignation in that
meeting if the parliamentary vote goes as is widely expected. Socrates
is scheduled to address the nation at 20h00 GMT/1600 EDT this evening.
The political instability that would ensue from a collapse of the
government, combined with market tensions that have pushed Portuguese
ten-year bond yields to a euro-era high above 8%, seem likely to
increase the pressure on Lisbon to seek a financial aid package from the
European Financial Stability Facility and the International Monetary
Portugal president ready to accept resignation.
Info passed to me by market friends. Have not seen it myself.
From my limited knowledge and what I have learned in the past 5 minutes, the Portugal president is ready to accept the PM’s resignation. He just has not seen it yet!
Oh and the Eiffel Tower is reopened.
For those of you just tuning in, this is Jesse Livermore filling in for Jamie. Had to log in under his name as the website did not want to play games with Jesse.
I was promised that the Portugal “event” would occur 2 to 3 hours after debate started. I am waiting and it looks like so is everyone else.
Would start a rumor if I thought it would help. One time Jamie had Greenspan on his way to the hospital and then dead. Resulted in Jamie’s only call from the FED and they were not asking his opinion of monetary policy
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