In July, new home sales rose for the fourth consecutive month. On a monthly basis, new home sales rose by 9.6% M/M to a total annualized number of 433 000, well above the estimated 390 000. Regional details show an increase in the Northeast (32.4% M/M), South (16.2% M/M) and West (1.0% M/M), while sales fell in the Midwest (-7.6% M/M). The total number for sale fell from 280 000 to 271 000 and months’ supply dropped from 8.5 to 7.5, well below the high of 12.4 reached in January. These data confirm again that the US housing market has started to recover.
US durable goods orders rose by 4.9% M/M in July, while the consensus was looking for an increase by 3.0% M/M. The previous figure was upwardly revised from - 2.5% M/M to -1.3% M/M. Looking at the details, the better than expected outcome was mainly due to nondefense aircraft orders (107.2% M/M), but also electrical equipment, fabricated metals, primary metals and computers, electronics rose. Machinery orders however dropped by 6.6% M/M. Excluding transportation, the durables rose by 0.8% M/M, broadly in line with expectations.
EMU: German IFO shows sharpest increase since 1996
The German IFO business climate indicator improved for the fifth straight month in August. The headline index rose from an upwardly revised 87.4 to 90.5, while a figure of 89.0 was expected. The improvement was led by the expectations sub-index (95.0 from 90.4), but also the current assessment improved (86.1 from 84.4). The indicator confirms again that the German, economy is recovering from its descent.
