USA weekly unemployment claims remain in a tight range whilst existing home sales stagnate

Mar 21 • Morning Roll Call • 1867 Views • Comments Off on USA weekly unemployment claims remain in a tight range whilst existing home sales stagnate

shutterstock_23023696There was mixed data coming out of the USA on Thursday, however, the main indices brushed off any lingering doubts regarding the Ukraine/Crimea crises and any negative readings emanating from any USA publishers to close up on the day. Existing home sales came in below expectations at an annualised rate of 4.60 million for February. The Conference Board LEI was up for the USA to 99.8 for the month of February.

However, once again the weekly unemployment count proved to be volatile, but still trapped in a tight range. The reading for last week was 320K, a five thousand increase on the previous week’s reading. The advance number for seasonally adjusted insured unemployment during the week ending March 8 was 2,889,000, an increase of 41,000 from the preceding week’s revised level of 2,848,000.

February Existing-Home Sales Remain Subdued

Home prices continued to show solid growth in most of the country due to limited inventory conditions, but rising prices and severe winter weather caused existing-home sales to slip in February, according to the National Association of Realtors. Total existing-home sales, which are completed transactions that include single-family homes, town homes, condominiums and co-ops, declined 0.4 percent to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January, and 7.1 percent below the 4.95 million-unit level in February 2013. February’s pace of sales was the lowest since July 2012, when it stood at 4.59.

March 2014 Business Outlook Survey

Manufacturing activity rebounded in March, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, and shipments increased and recorded positive readings this month, suggesting a return to growth following weather-related weakness in February. Firms’ employment levels were reported near steady, but responses reflected optimism about adding to payrolls over the next six months. The survey’s indicators of future activity reflected optimism about continued growth over the next six months. Indicators Suggest Activity Rebounded This Month.

The Conference Board Leading Economic Index® for the U.S. Increases

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.5 percent in February to 99.8 (2004 = 100), following a 0.1 percent increase in January, and a 0.1 percent decline in December.

The U.S. LEI increased sharply in February, suggesting that any weather-related volatility will be short lived and the economy should continue to improve into the second half of the year,

said Ataman Ozyildirim, Economist at The Conference Board.

The strengths and weaknesses in the LEI were balanced in February, with large increases in housing permits and the interest rate spread more than offsetting decreases in the workweek.

US Unemployment Insurance Weekly Claims Report

In the week ending March 15, the advance figure for seasonally adjusted initial claims was 320,000, an increase of 5,000 from the previous week’s unrevised figure of 315,000. The 4-week moving average was 327,000, a decrease of 3,500 from the previous week’s unrevised average of 330,500. The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 8, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 8 was 2,889,000, an increase of 41,000 from the preceding week’s revised level of 2,848,000.

Market overview at 10:30 PM UK time

The DJIA closed up by 0.67%, SPX by 0.60%, NASDAQ by 0.27%. Euro STOXX closed up 0.41%, CAC up 0.46%, DAX up 0.21%, FTSE closed down 0.47%. The DJIA equity index future is up 0.78%, SPX future up 0.75%, NASDAQ up 0.47%. The euro STOXX future is up 0.32%, DAX future up 0.10%, CAC up 0.36%, FTSE future is up 0.54%.

NYMEX WTI oil is down 0.94% on the day to $99.43 per barrel, NYMEX nat gas was down 2.56% to $4.37 per therm. COMEX gold was down 0.81% to $1330.50 per ounce with silver down 2.62% on COMEX to $20.28 per ounce.

Forex focus

The U.S. currency advanced 0.4 percent to $1.3779 per euro late afternoon New York time. It touched $1.3749, the strongest since March 6th, after rallying 0.7 percent yesterday. The dollar appreciated 0.1 percent to 102.39 yen after rising 0.9 percent yesterday. The yen gained 0.3 percent to 141.07 per euro. The dollar gained to the strongest level in two weeks against the euro after Federal Reserve policy makers signaled they’ll probably raise interest rates by the middle of next year.

New Zealand’s dollar weakened for a second day after the nation’s statistics agency said gross domestic product rose 0.9 percent in the fourth quarter, versus a revised 1.2 percent during the previous three months. The kiwi fell as much as 0.7 percent to 85.02 U.S. cents before trading at 85.32 cents, down 0.3 percent.

Bonds briefing

The benchmark 10-year yield was little changed at 2.77 percent as of 5 p.m. in New York following yesterday’s increase of 10 basis points. The price of the 2.75 percent security due in February 2024 was 99 26/32.

The 30-year bond yield rose one basis point to 3.66 percent. The two-year note yield was little changed at 0.42 percent after gaining seven basis points yesterday, the most since 2011. Five-year yields were little changed at 1.7 percent after touching 1.75 percent yesterday, the highest since Jan. 10th. The difference between yields on 10- and 30-year U.S. Treasuries narrowed to the least since 2010 after the Federal Reserve indicated interest rates may rise faster than anticipated while the pace of growth is moderate.

Fundamental policy decisions and high impact news events for March 21st

Friday Japan enjoys a bank holiday; Europe’s current account is expected to print at -$18.4 bn. The EU continues with its economic summit. The UK’s public net sector borrowing figure is expected to come in at £7.8 bn. Core CPI and CPI for Canada is expected to come in at 0.5% and 0.6% respectively. Retail sales in Canada are predicted to rise by 0.9%. Consumer confidence for Europe is expected to come in at -12.
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