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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.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.