Trade Desk Thoughts - Pending Home Sales

Pending Home Sales (August) Actual 7.4%, Expected -1.5%, Previous -3.2%

Release Explanation: This reports the change in the number of homes under contract which are still awaiting the closing transaction. It is an important since the housing market is included in most economic forecasts. Retail Sales, CPI, and PCE in the US. 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: In August, Pending Home Sales on a seasonally adjusted basis rose by 7.4%, the most since October 2001. In the year to August, sales rose 8.8%. All four regions showed monthly gains, with the largest (18.4%) in the West and the smallest (2.3%) in the South. For the year, pending sales fell 2.1% in the South, but the other three regions showed gains. The largest gain was in the West (37.8%) and the smallest was in the Northeast (2.0%).

"Markets are far more concerned with the possible effects of the coordinated rate cuts announced by the Fed," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. " Going forward, the chances of seeing a recession in the developed economies have risen. Still, any positive report on housing is welcome given the present circumstances."

Forex Technical Reaction: The are wild swings taking place in the currency markets this morning based on the announced rate cuts. USD/JPY is off the lows of the day and equity markets were recently trading in positive territory.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.

The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.