U.S. New Home Sales Report – January 2009
January 28th, 2009 Posted in Market Movers
Following last week’s article, U.S. Building Permits for December 2008, this week I decided to focus your attention on the U.S. New Home Sales report, which is scheduled for January 29th at 15:00 GMT.
Unlike the U.S. Building Permits indicator, this report is measuring the annualized number of actual new single family homes that were sold during the previous month. Considering that the acquisition of a new home is leading to a wide variety of additional expenses, from furniture and appliances, to signing on a mortgage, and I’m sure you can all use your imagination to think of all kinds of other expenses. The act of purchasing the new home is essential for the economy’s good health and good cycling.
As you all know, the recent months were characterized by cutting down on large expenses by the average consumer due to the poor financial status. The New Home Sales report describes quite an accurate picture of this gloomy condition.
Ever since December 2006, when 1,120,000 new homes were sold, the figures have been declining consistently. During the first half of 2007 about 900K new homes were sold. In the second half, the numbers reached as low as 700K. Then in 2008, there was a coherent drop which reached its peak on the last publication, when only 407K new home acquisitions were reported during last November.
I cannot over-emphasize the effect of this on the U.S. and global economy, and I cannot over emphasize the impact it has on the U.S. Dollar, causing the leading currency to act according to jungle rules.
The JPY is getting ridiculously stronger, and all the experts will go on and repeat the word “repatriating” to try to put a logical label on this phenomenon, but the truth is that no one could have predicted this bullish trend, and frankly, no one did.
Crude Oil prices have dropped from over $140 a barrel to almost $30 a barrel. The most common explanation for it was “low demand;” well, I don’t remember reading any forecast from a serious analyst saying that demand for oil will drop for over 5%. So how can it be that oil prices dropped over 70%?
The reason: jungle rules. Tomorrow’s New Home Sales is one of the best mirrors of this fact. Trust me, as soon as you’ll start to see positive signals from the U.S. housing sector, both the forex market and commodities market will once again apply to sane and logical rules, returning to former rates. Until then, expect the unexpected.
If you’d like to discuss these issues in a more comprehensive manner, you can contact me at yan@forexyard.com.
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Tags: American Market, Forex Trading, ForexYard, New Home Sales, US New Home Sales, USD
