American housing market slumps

American housing market slumps

In December, American homebuilding went down to a more than two-year minimum because construction of both single as well as multi-family housing dipped. Undoubtedly, that’s another sign that in the fourth quarter the US economy had lost momentum.

However, there was some upbeat news on the American economy. For example, on Tuesday, data revealed a rebound in consumer confidence in February following three monthly dives in a row. The American economy’s outlook is still overshadowed by worries of a deceleration in global surge, weakening fiscal stimulus, trade clashes, not to mention uncertainty over the UK’s departure from the EU.

Fed Chair Jerome Powell once again drew attention to these risks. He reaffirmed the Fed’s patient approach to lifting rates further in 2019.  

In January, housing starts headed south by 11.2% to a seasonally updated annual rate of 1.078 million units. It turns out to be the weakest outcome since September 2016. November’s data was updated downwards to indicate starts at a 1.214 million unit rate versus the previously posted tempo of 1.256 million units.

As for other details of the report, they happened to be dismal too. It drops a hint that  the housing market could still be sluggish notwithstanding an easing in mortgage rates. Meanwhile, in December, housing completions reached a more than one-year minimum, and while building permits went up, they were powered by the volatile multi-family housing segment.

Financial analysts had hoped that housing starts would dip to a tempo of 1.250 million units in January.

Aside from that, the evergreen buck tumbled versus a pack of its key peers. American Treasury prices went up, while shares on Wall Street demonstrated mixed performance.


Time to sell Alibaba
Time to sell Alibaba

Chinese stocks were pressed by the US plans to kick them off US stock exchanges. Alibaba has already plunged by 4% in pre-market hours.

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FED and BOE Make Another Attempt to Beat Inflation
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The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.

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