Sydney, Feb 27, 2012 AEST (ABN Newswire) - With most other series trending higher, the good run for US housing data continued on Friday with new home sales beating forecasts for January. Although below the 324k annual pace seen in December, the 321k rate beat economic forecasts and continued the modest recovery from the lows struck in 2010/11. With building permits, housing starts and the NAHB confidence survey all trending higher, there are now clear signs that a recovery is underway.
With momentum going in the right direction, markets will be looking for further confirmation of a recovery when new home sales data is released later on this evening. Given improvements in the job market and consumer confidence, economists expect a 1pct increase following a 3.5pct decline in December
Overnight Market Wrap
A mixed session for risk assets to end off the working week as better-than-expected economic data in the States was offset by renewed geopolitical concerns surrounding Iran. Equities were largely bid with European indices the best performers with gains in the region of 0.5-1pct.
While the S&P500 closed at its highest level since 2008, gains were whittled away late in the session as NYMEX crude soared towards $110 per barrel, Despite the good economic data, the USD was once again offered with the Euro climbing above 1.3450 on the back of short covering and programmed buying correlated to the crude price. Continuing the strange price action witnessed there, commodities markets were all over the shop with gold lower, silver unchanged and base metals up in excess of 1.5pct. Last but not least, US treasuries finished lower with yields across the curve up by 2-4bps.
The Day Ahead
After rallying throughout much of last week, Australian stocks look set give back ground this morning with SPI futures pointing to a decline of 7pts on the open. While we may open weaker, gains across the energy and materials sectors, coupled with a close above the 200-day MA last week, may see stocks eke out a small gain by the close of trade today.
- With little in the way to guide it, the Australian Dollar is expected to have a quiet session with the currency expected to oscillate between USD1.0660-1.0750 during Asian trade.
- A calendar full of second-tier economic releases this evening with US pending homes sales the undoubted data highlight. Elsewhere we receive information on Eurozone money supply, German retail sales, French producer prices and UK house prices from Halifax.
Contact
David Scutt
Treasury Dealer
Email: david.scutt@arabbank.com.au
Phone: +61-2-9232-3844
| ||
|
