Housing Starts Rise as Inventory Holds Back Sales

Wells Fargo Research Team Wells Fargo

U.S. Review

Housing Starts Rise as Inventory Holds Back Sales

Housing starts bounced back solidly in May following April’s upwardly-revised 3.1 percent fall, rising 5.0 percent to a 1.35 million-unit pace. Existing home sales fell for the second straight month in May and have fallen 3 percent over the past year, while inventory of homes for sale has fallen over 6 percent.
The current account deficit widened in Q1 following an upwardly-revised Q4. As a percent of GDP, the deficit has remained between 2 and 3 percent over the past several years, indicating that the economy is growing at about the same pace as the deficit.

Global Review

Canadian Stir-up

In Canada, a soft print for CPI inflation and indications of deterioration in retail spending take some of the wind out of the sails for rate hikes from the Bank of Canada.
Meanwhile, the Bank of England kept rates on hold but there is dissention in the ranks of the Monetary Policy Committee. The decision to remain on hold was split (6-3), as a growing number of MPC members indicate a preference to hike rates.

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Wells Fargo Research Team

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EUR/USD flirts with daily highs, retargets 1.1900

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