Thursday, 27 February 2014

US new home sales jump

Wednesday brought an end to the recent run of weak data from the US, with new home sales reportedly rising 9.6 percent in January to the highest level in more than five years.

Bill McBride tells us not to read too much into the January sales rate though.

Even though the Census Bureau reported that new home sales rebounded in January from the low December rate (and the December sales rate was revised up), January and December are seasonally weak months - and there is a large margin of error to the initial release - so I wouldn't read too much into one month of data. Also reported sales were only up 2% year-over-year (not much).

Nevertheless, he expects the US housing recovery to continue.

There was also good news from Germany on Wednesday. GfK's consumer confidence index rose to 8.5 going into March from 8.3 in February. The March reading is the highest since January 2007.

In the UK, fourth quarter growth was confirmed at 0.7 percent on Wednesday. The recovery broadened as business investment and trade picked up.

Also on Wednesday, Brazil raised interest rates by 25 basis points to 10.75 percent. The latest rate increase came after six consecutive 50-basis-point hikes.

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