Trade Desk Thoughts - Existing Home Sales (July)

Existing Home Sales (July) Actual 5.0M, Expected 4.92M, Previous 4.86M

Release Explanation: This is a monthly report by the National Association of Realtors that covers statistics on sales and prices of existing single-family dwellings for the nation and the four regions on an annualized basis. It is an important report since the housing market is included in most economic forecasts. These figures include condominiums and co-ops, in addition to single-family homes. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the US consumer. There is a very strong impact on the sentiment towards the US Dollar from this report.

Trade Desk Thoughts: The report offers a mixed bag of information because while July's sales improved 3.1% from June, inventories rose 0.9% to an 11.2 month supply, the highest since April, while median home prices fell 1.25% from June and are down 7.1% for the year. "Overall, the report still indicates the housing market is weak," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "Sales are losing pace to the supply coming onto the market as prices decline. However, there is evidence that lower prices are attracting buyers."

Forex Technical Reaction: The dollar weakened in the hours leading up to the release, possibly on speculation the report would be weaker than expected. Oil had risen 0.8% and S&P futures were down 0.5%.

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