U.S. Review
Inflation Rising, Housing Not so Much
- Despite the acceleration in consumer prices, the Fed is unlikely to change its current course for a rate hike in the middle of next year.
- The housing recovery remains slow. Existing home sales perked up in June, while new home sales erased all of the gains made in May.
- Durable goods orders beat expectations and the factory sector looks to have improved further into July.
- The economy appears to have bounced back in the second quarter and should maintain growth just shy of 3 percent for the rest of the year.
Global Review
Global Economy Continues to Grow at Modest Pace
- Data released this week showed that real GDP growth in the United Kingdom remained above an annualized rate of 3 percent in the second quarter. Economic growth in the Eurozone, however, remains soft. It is difficult to envision a robust expansion if the French economy, which accounts for20 percent of Eurozone GDP, continues to struggle.
- The rate of real GDP growth in China has stabilized at around 7.5 percent in recent quarters, and the smattering of data that we have thus far in Q3 has also been encouraging.
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GBP/USD retreats to 1.2500 on renewed USD strength
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