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US Home Sales Data Improves

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US Home Sales Data Improves

The US National Association of Realtors has released it’s Pending Home Sales figures for the month of March. Month on month this figure is 3.4%, an improvement on the previous months fall of 0.8%. Year on year this figure has contracted by 7.9%, again an improvement on last month reading of -10.5%.

Sluggishness is still evident in the housing market in the US, which by most other metrics is performing sufficiently well to stage a successful recovery. A run of increasingly strong GDP readings over the past several quarters is however likely to be interrupted later this week as economic commentators expect the preliminary Q1 growth statistic to fall back to just 1.1% from a Q4 2013 recording of 2.6%. Much of this will be explained away by the excessively harsh winter that the US was subjected to this year, and given the run of positive data over the past couple of months, it would be difficult to argue with this analysis.

Later this week, the Federal Reserve will have a lot to consider when it meets for the third time this year. Their monetary policy stance firmly remains ‘accommodative’ however it is still likely that there will be a further reduction in the bond purchase program which will have a tightening effect on the money supply. Recent inflation concerns around the US economy are creating a dilemma for the Feds policy makers. There is not yet any urgency for the Fed to address this balancing act and so markets are expecting this Wednesday’s policy meeting to be a business as usual affair in terms of likely Fed actions.

The real event that holds the market moving potential will be the Feds Monetary Policy statement that will be released subsequent to the meeting, this will be closely examined in an effort to discern the future leanings of individual FOMC members with a view to discerning any changes to the Feds market action timeline.

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