Good or bad US data and the buck buyers keep hovering it up. Fed hike is the only show to watch
You know the old saying, if the price can't fall on bad data...
Now these numbers don't spell doom for the US economy but here we are again seeing worse numbers. Ok, the drop in existing sales isn't going to rock any boats but at the moment we're not in the bullish phase new home sales are in. On paper that's better for the economy as new builds offer the economy more than existing sales, or churning old stock, if you like
Manufacturing continues to fall from the highs last year as the Markit numbers show us a dead cat bounce for Q1 and the Philly Fed can't even print better orders numbers without a warning. As for the KC index just out, the only positive number you'll see is if I forgot to put a minus sign on one
There's a simple reason why the buck isn't falling with the data, and reader Jewell Mehedi has hit the nail on the head also. It's that as far as the market is concerned, for this year, the Fed is the only game in town for possible rate hikes
Here's a great graph from John Kicklighter over on Stocktwits that shows a great representation of where central banks are on monetary policy
Personally I'd put the BOE and BOC much higher but that's just my opinion
Our man Adam is spot on too with his assessment following the housing starts data this week
"The market really, truly, deeply wants to get behind the idea of a strong US dollar and US economy."
In an effort to not sound like I'm talking my book, the economy has got a lot to live up to compared to expectations but the market is right, at the moment the Fed is the only game in town this year (though I think the BOE might still sneak in also), and while that thought is front and centre, that's the reason this buck won't drop, whatever the bad news is
