Weekly economic & financial commentary
|Summary
United States: COVID Rise Jitters Financial Markets, while Housing Perks Up
- July's NAHB Housing Market Index slipped one point to 80. Housing starts beat expectations and rose 6.3% during June, although building permits fell 5.1%. Existing home sales climbed 1.4%. The Leading Economic Index (LEI) advanced 0.7% in June. Initial jobless claims rose to 419K for the week ended July 17.
- Next week: Durable Goods Orders (Tuesday), Q2 Real GDP (Thursday), Personal Income & Spending (Friday)
International: ECB's Easing Measures Going Nowhere Fast
- The European Central Bank made it clear at its monetary policy meeting this week that its main policy rates are unlikely to increase for the next few years amid a shift in its thinking about its inflation target. Eurozone PMI data for July were generally encouraging, but rising COVID cases present a downside risk.
- Next week: Canada CPI (Wednesday), Eurozone GDP (Friday)
Interest Rate Watch: Faster Growth and Inflation, Tapering Ahead, but Lower Rates?
- When the 10-year Treasury yield peaked in late March, markets were pricing a fed funds rate of roughly 2.25% for that one-year period five years out, not too far from the FOMC's "long-run" dot of 2.50%. Fast-forward to today and market pricing has tumbled to less than 1.50% for roughly the same period.
Credit Market Insights: Will Canada’s Housing Market Sustain Its Frothiness?
- Around the world, house prices have been soaring, and Canada's housing market has emerged as one of the frothiest. While the Canadian economy is on track for a strong year in 2021, the lack of affordability and easing lending standards have raised some concerns.
Topic of the Week: Housing Is Moving Back into Balance
- While declining affordability and supply shortages have pressured housing activity in recent months, we believe the housing market is now beginning to come back into balance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.