Next report will be on may 25th
In the US, both housing starts and permits disappointed in April. Housing starts dropped by 12.8% M/M from an upwardly revised 525 000 to 458 000, while a figure of 520 000 was expected. Building permits fell (3.3% M/M) from a downwardly adjusted 511 000 to 494 000, while markets were hoping for an outcome of 520 000. Also homes under construction declined by 5.5% M/M to 685 000, while completed houses rose by 5.5% M/M. Both housing starts and permits are now at new record lows which indicate that the improvements in February were only shortlived and that the market of new homes remains extremely fragile.
EMU:German ZEW climbs above LT average
The German ZEW index extended its rebound as the headline index rose from 13.0 to 31.1 in May, while the consensus was looking for a more moderate improvement. The current situation however continued to deteriorate (-92.8 from -91.6). The ZEW index showed an impressive rebound since its record low (-63.9) reached in July 2008 and climbed this month even above its long term average of 26.2, which is a positive sign as the ZEW appeared somewhat leading to other confidence indicators in previous recessions.
Other: UK CPI falls to lowest level since january 2008
In the UK, CPI inflation came out lower than expected in March. On a monthly basis, consumer prices rose by 0.2% M/M, while the consensus was looking for a rise by 0.4% M/M. Looking at the details, food and non-alcohol (-0.5% M/M), housing (- 0.2% M/M) and household (-1.0% M/M) showed negative contributions, while the largest positive contributions came from communication (2.2% M/M), transport (1.6% M/M) and health (0.8% M/M). The yearly CPI figure dropped to 2.3% Y/Y, still above the Bank of England 2.0% target, but in the coming months, sharp declines in inflation are expected.
