Previous: 108.2 (revised from 107.2)
Existing Homes (March)
To the surprise of the market, this morning’s US data was extremely ugly. Existing home sales saw the biggest drop in 18 years while consumer confidence sunk to an 8 month low. Despite the rally in the stock market, US consumers are not optimistic. Instead, they felt less comfortable with the current conditions in the labor market as well as the outlook for jobs in the months ahead Rising prices at the gas pump raised concerns about income and business conditions. The only saving grace in the data today was the third straight rebound in the prices of existing homes, but that will not be enough to convince traders that the housing market is stable. Overall, today’s reports only reinforces the Federal Reserve’s need to keep interest rates unchanged. The housing market could still see a significant slowdown while the latest rise in oil prices will keep costs of gas high. The problems that the US economy is facing are not going away, and today’s numbers provide a harsh reality check that could push the US dollar to fresh lows against the Euro and British Pound.