U.S. Existing Home Sales Plunge More Than Expected In May

Trading 22 juin 2020 Commentaire »

Existing home sales in the U.S. tumbled by much more than anticipated in the month of May, according to a report released by the National Association of Realtors on Monday.

NAR said existing home sales plunged by 9.7 percent to an annual rate of 3.91 million in May after plummeting by 17.8 percent to a rate of 4.33 million in April. Economists had expected existing home sales to slump by 4.8 percent to a rate of 4.12 million.

Existing home sales declined for the third straight month and are down by 26.6 percent compared to the same month a year ago.

"Sales completed in May reflect contract signings in March and April - during the strictest times of the pandemic lockdown and hence the cyclical low point," said Lawrence Yun, NAR's chief economist.

He added, "Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year."

The report said the median existing home price in May was $284,600, down 0.7 percent from $286,700 in April but up 2.3 percent from $278,200 in May of 2019.

NAR also said there were 1.55 million homes for sale at the end of May, up 6.2 percent from 1.46 million at the end of April but down 18.8 percent from 1.91 million a year ago.

The unsold inventory represents 4.8 months of supply at the current sales rate compared to 4.0 months of supply in April and 4.3 months of supply in May of 2019.

"New home construction needs to robustly ramp up in order to meet rising housing demand," Yun said. "Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates."

The report also said single-family home sales plunged by 9.4 percent to an annual rate of 3.57 million in May, while existing condominium and co-op sales plummeted by 12.8 percent to a rate of 340,000.

On Tuesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of May.

Economists expect new home sales to jump by 2.7 percent to an annual rate of 640,000 in May after rising by 0.6 percent to a rate of 623,000 in April.


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*Eurozone June Flash Consumer Confidence ?14.7 Vs -18.8 In May, Consensus -15

Trading 22 juin 2020 Commentaire »

Eurozone June Flash Consumer Confidence ?14.7 Vs -18.8 In May, Consensus -15


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Dollar Little Changed Following U.S. Existing Home Sales

Trading 22 juin 2020 Commentaire »

Following the release of U.S. existing home sales for May at 10:00 am ET Monday, the greenback changed little against its major rivals.

The greenback was trading at 106.83 against the yen, 1.1247 against the euro, 1.2431 against the pound and 0.9485 against the franc around 10:01 am ET.


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Euro Little Changed After Eurozone Consumer Sentiment Index

Trading 22 juin 2020 Commentaire »

Following the release of Eurozone flash consumer sentiment index for June at 10:00 am ET Monday, the euro changed little against its major counterparts.

The euro was trading at 120.13 against the yen, 1.0663 against the franc, 0.9050 against the pound and 1.1243 against the greenback around 10:03 am ET.


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*U.S. Existing Home Sales Plunge 9.7% In May

Trading 22 juin 2020 Commentaire »

U.S. Existing Home Sales Plunge 9.7% In May


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Dollar Mixed Ahead Of U.S. Existing Home Sales

Trading 22 juin 2020 Commentaire »

At 10:00 am ET Monday, U.S. existing home sales for May will be released. Ahead of the data, the greenback traded mixed against its major rivals. While it held steady against the pound, it dropped against the rest of major rivals.

The greenback was worth 106.84 against the yen, 1.1239 against the euro, 1.2423 against the pound and 0.9489 against the franc as of 9:55 am ET.


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German GDP To Fall Sharply In Q2, Bundesbank Says

Trading 22 juin 2020 Commentaire »

The German economy is set to contract significantly in the current quarter and much more than the rate reported in the first quarter, Bundesbank said in its monthly report released Monday.

According to central bank, gross domestic product will fall around 10 percent in the second quarter.

The largest euro area economy had contracted 2.2 percent in the first quarter, which was the biggest fall since the first quarter of 2009 and the second largest since the German unification.

The economic stimulus package announced by the government should boost the recovery but it will hardly have any effect in the second quarter, the bank said.

The package has helped to lift sentiment among businesses and consumers, the bank noted.


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Why not bet on the pound’s growth?

Trading 22 juin 2020 Commentaire »

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The prospect of the absence of negative rates in the UK, in theory, was supposed to cause a pound rally, but this did not happen. Let's try to figure out why and what positions on the pound are most profitable now.

Traders were enthusiastic about the decision of the Bank of England to keep the rate at the lowest level of 0.1%. But market players were a little alarmed by the position of one of the senior members of the English regulator. Andy Haldane voted to keep the target level of asset purchases unchanged. In his opinion, the current policy of the BoE favors economic recovery and the return of inflation to the 2% target.

Nevertheless, the pound lost ground. The continuation of the downward trend, including in relation to the dollar, market players associate with continuing concern about Brexit. Pressure on sterling is also exerted by the BoE's penchant for pursuing a soft policy if the situation requires it, and the situation may require it, since the prospects for inflation and the economy remain vague.

The GBP/USD pair ended in negative territory last week. Today, the course is slightly higher. Sterling gained 0.8% against the dollar and reached a local high at 1.2450 in the US session. However, this did not happen at all because of the attractiveness of the pound, but because of the US dollar's weakness.

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The dollar index was steadily losing value at evening trading, the quote was prepared to go below 97 points, threatening an upward trend in the US currency. Recently, the dollar has been extremely sensitive to the growth of stock indices, which have been increasing today, despite the alarming situation with coronavirus in America and in the whole world. However, investors are a little nervous because of the risks associated with the second wave of the pandemic, which means the dollar has a chance of recovery. This, in turn, will put pressure on the pound.

As for the factors that come specifically from the pound, there is little positive. Most strategists predict a decline in sterling due to the threat of Brexit without agreement. In addition, the measures taken by the BoE may not be enough to compensate for the consequences of the coronavirus pandemic. And if you allow a new outbreak in the UK, how did this happen in other countries? The answer is obvious.

The fundamental background does not yet create the prerequisites for long positions on the GBP/USD pair. Despite today's rise, the pair is trading below a key resistance level of 1.2590.

Meanwhile, volatility in this pair may increase on Tuesday. The publication of business activity indexes is expected. The growth of indicators will support the GBP/USD rate.

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BoE Chief Says Asset Purchases To Be Reversed Before Hiking Rates

Trading 22 juin 2020 Commentaire »

Bank of England Governor Andrew Bailey said the bank should adjust its quantitative easing programme before starting to lift interest rates.

The central bank reserves cannot be taken for granted, Bailey wrote in an article published on Bloomberg.

"When the time comes to withdraw monetary stimulus, in my opinion it may be better to consider adjusting the level of reserves first without waiting to raise interest rates on a sustained basis," he said.

"Elevated balance sheets could limit the room for maneuver in future emergencies," Bailey said.

Bailey said he did not want high central bank holdings of government debt to become a permanent feature. The financial system must not become reliant on these extraordinary levels of reserves.

Last week, the central bank raised its QE by GBP 100 billion to GBP 745 billion. The bank had reduced the benchmark rate to a historic low of 0.1 percent in March.


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Indian Rupee Climbs To 6-day High Against U.S. Dollar

Trading 22 juin 2020 Commentaire »

The Indian rupee firmed against the U.S. dollar in evening deals on Monday, as the latter fell across the board and regional shares gained.

The benchmark S&P BSE Sensex rose by 179.59 points, or 0.52 percent, to 34,911.32, while the broader NSE Nifty index ended up 66.80 points, or 0.65 percent, at 10,311.20.

Another round of military talks between India and China was underway to ease border tensions and pharmaceutical companies like Glenmark, Hetero Drugs, and Cipla have repurposed at least five drugs to help treat coronavirus patients, helping underpin investor sentiment.

The Indian rupee climbed to a 6-day high of 75.71 versus the greenback, from Friday's closing value of 76.04. On the upside, resistance is likely seen near the 72.00 level.


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