U.S. Housing Market Remains Solid
|U.S. Review
U.S. Housing Market Remains Solid
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In a light week of U.S. economic indicators, we focus on the housing market with existing home sales and the FHFA home price index released during the week. Existing home sales climbed more than expected in January, reaching a new-cycle high, but the solid pace will likely not be sustained in the coming months, as borrowing costs rise and inventories remain at a historically low level.
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Resulting from lean inventories, home prices remained firm in January, with the three-month moving average median home resale price up 6.0 percent year over year and FHFA home prices up 6.3 percent above year-ago levels.
Global Review
Global Economy Continues to, Slowly, Improve.
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The Markit PMIs for the manufacturing and services sectors improved in February in the Eurozone and in Germany. Both manufacturing PMIs hit a cycle high, underscoring the improvement in this sector in the global economy.
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In South America, the Brazilian central bank lowered its Selic benchmark interest rate to 12.25 percent from 13.0 percent, and has brought interest rates down 200 bps since September of last year. We still see some more interest rates cuts in the coming months, as the rate of inflation has come back to the central bank's target of 4.5 percent plus/minus 2 percentage points.
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