In December, US pending home sales rose by 1.0% M/M after a sharp decline in the previous month (-16.4% M/M), which was exactly in line with expectations. Regional details show that sales rose in the Midwest (5.2% M/M), Northeast (2.3% M/M) and South (2.2% M/M), while sales dropped in the West (-3.8% M/M). The outcome might indicate that the housing market is somewhat stabilising after the swings caused by the government’s tax credit. The tax credit was due to expire at the end of November, but it was recently expanded until April; which might cause new swings in the coming months.
EMU: PPI inflation remains exceptionally low
In the euro zone, producer prices rose by 0.1% M/M in December, while the consensus was looking for a flat outcome. On a yearly basis however PPI inflation rose from -4.4% Y/Y to -2.9% Y/Y. Looking at the details producer prices of intermediate, capital, durable and non-durable consumer goods rose by 0.1% M/M, while energy prices fell by 0.2% M/M. Nevertheless, producer price inflation remains at exceptionally low levels, which raises expectations that inflationary levels will remain subdued in the coming months.
