The National Association of Home Builders’ index rose a further two points to 16 in May, the highest since September 2008 and extending the slow improvement that started in March when the index stood at 9. The trough was actually in January at 8. Also the current level remains at stress levels though. The 50 level separates a positive from a negative climate. Lower mortgage rates, lower housing prices and a tax credit probably are behind the improvement in the mood of homebuilders. The advance was driven by the current sales and future sales indices while the traffic subindex stabilized.
EMU: both exports and imports rose in March
In the euro zone, the seasonally adjusted trade balance showed a sharper than expected contraction of the deficit. The trade deficit contracted from a revised 2.9B to 2.1B in March, while the consensus was looking for an outcome of -3.8B. Looking at the details, exports rose by 1.4% M/M, the second consecutive monthly increase and also imports (0.6% M/M) grew in March. The improvement in exports was driven by exports from euro zone’s biggest economy, Germany. The second consecutive, albeit modest rise in the exports, following really crashing figures in Q4 of 2008, support evidence that global demand is stabilizing as the inventory cycle seems to have run its course.
