U.S. existing home sales rose more than expected to 5.00 million units in July, a 3.1% gain in the month, following June's revised sales figure of 4.85 million. With that gain the index rebounded to the highest level in five months, although the range in the past 11 months has been relatively narrow, according to the National Association of Realtors (NAR).

Economists were expecting the July data to rise to only 4.91 million. Total housing inventories rose to a record-high 11.2-month supply in July, up from the 11.1-month supply in June.

However, a number of economists are suggesting the rise in sales has more to do with foreclosure-related sales than a true stabilization of the housing market. Ian Shepherdson, chief U.S. economist at HFE, said it's "hard to avoid the conclusion that sales have bottomed out," but added sales have likely increased from homes in foreclosure rather than a pickup in the regular sales market.

Texas business activity climbed up in August according to the Dallas Fed's manufacturing report released Monday, improving to a reading of -18.8 from July's -27.4 level. The production index remained flat in August, while new orders dropped significantly to -14.6 from -7.7 in the previous month.

In an interview with the New York Times, Philadelphia Fed President Charles Plosser said he might consider dissenting in favour of raising interest rates to fight inflation and maintain the Fed's credibility. "Dissent serves a function of illuminating for the public the nature of the policy debates," the Federal Open Market Committee voting member was quoted as saying.

It was a quiet news day in Canada, where the lone morning release consisted of farm cash receipts. The Statistics Canada data showed that soaring prices for wheat and canola helped Canadian crop farmers rake in more than $11 billion for their products in the first half of 2008, an increase of 30.8% from the same period last year and 56.9% above the five-year average.

Meanwhile, livestock producers saw their January to June results heading in the opposite direction, with cash receipts down 4.3% to $8.8 billion from the same period in 2007.

The main news over the weekend stemmed from a meeting of current and former central bank heads in Jackson Hole, Wyoming, where they discussed the current financial crisis and how to avoid similar collapses from occurring in the future. According to Bank of Israel Governor Stanley Fischer, however, the meeting "didn't settle a whole lot."

European Central Bank President Jean-Claude Trichet and Federal Reserve Governor Frederic Mishkin both defended the central banks and their results over the past year. Meanwhile, former Bank of England policy-maker Willem Buiter argued that the central banks' enthusiasm in assisting investors in trouble was "unhealthy and dangerous", and presented a paper saying that the Federal Reserve had been too quick to assist financial institutions.

Speaking in an interview with the BBC following a meeting of central bankers in Jackson Hole, Wyoming, Bank of England Deputy Governor Charles Bean said he expects the British economy to recover as commodity prices stabilize. However, he said the financial market turmoil is likely to drag on for some time.

Meanwhile, according to Reuters, an introductory note from the International Monetary Fund, prepared for a meeting of the G20, revises down global growth forecasts for the euro zone and the United States. Reuters reported that the IMF now sees global growth in 2008 at 3.9% versus the 4.1% reported in July, while growth in 2009 is now forecasted at 3.7% compared to the previous estimate of 3.9%.

The euro zone is now expected to grow 1.4% in 2008 compared to the 1.7% forecast back in July, and 2009 GDP is projected at 0.9% compared to the 1.2% growth rate predicted previously.

By Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it , with contributions from Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it , Patrick McGee, This email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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