Flash PMI and home sales firm
The August HSBC flash PMI rose 0.5 to 51.9. The U.S. continues to show strength relative to China and the EZ basis the HSBC PMI data. Output rose 0.7 to 52.4, new orders rose 1.6 to 52.6, and backlog expanded 2.9 to 51.6. However, employment fell 0.2 to 52.5. The data does not seem to be strong enough to generate confidence in growth or weak enough to lift recession fears.
July new home sales rose to 372,000 [about 365,000 expected]. Sales exceeded estimate, but the level of activity is still depressed. The graphic following puts sales in perspective. What remains more interesting is the low level of inventories. Competition from the existing market is holding back inventories, but the data also indicates that a spark in housing demand could quickly help growth by translating into new construction.
The September 10 year contract continues to work on yesterday's rally. Chart watchers will probably eye the 7/27 low of 133-26+ and the 8/10 high of 133-27+ as important to direction and a continued rally. Today's low at 133-10 and the high from 8/15 at 133-06 may be monitored below for insight into the rally's strength.
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July new home sales rose to 372,000 [about 365,000 expected]. Sales exceeded estimate, but the level of activity is still depressed. The graphic following puts sales in perspective. What remains more interesting is the low level of inventories. Competition from the existing market is holding back inventories, but the data also indicates that a spark in housing demand could quickly help growth by translating into new construction.
The September 10 year contract continues to work on yesterday's rally. Chart watchers will probably eye the 7/27 low of 133-26+ and the 8/10 high of 133-27+ as important to direction and a continued rally. Today's low at 133-10 and the high from 8/15 at 133-06 may be monitored below for insight into the rally's strength.
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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