FXCMTR - New home sales fall short of expectations
Actual: 2.6%
Consensus: 5.0%
Previous: -4.2% (revised -3.9%)
Even though new home sales increased by 2.6 percent in the month of March, the rise fell short of expectations. Just as we expected, the more seasonal weather last month played a big role in the rebound in home sales. The positive read relieves some of the market’s concern about the housing market, especially as we enter into usually busy spring home sale season. Unfortunately it will not be enough to stop the dollar from hitting a new record high against the Euro. The Dow has hit a new all time high and it is clear that the Euro wants to do so as well. On balance, today’s numbers including durables are not very dollar bearish, but the sentiment in the market clearly is. We have the Beige Book report still due for release today. Inflation should continue to be a big concern, but watch out for any cautious comments on the labor market and business activity. If the districts confirm the concerns that consumers had yesterday, then the dollar could have a very hard time recovering.