Intraday Market Thoughts

Home Sales Hurt US, China Indus Profits Next

by Adam Button
Oct 27, 2015 1:05

The US dollar stumbled on Monday in a modest retracement from last week's gains driven by soft home sales. The Swiss franc was the worst performer on the day while the antipodeans led. Chinese industrial profits are due later. Ashraf's Premium Insights issued a new trade on EURUSD with 2 charts and 6 reasons behind the decision ahead of Wednesday's Fed decision.

A steep stumbled in September US new home sales was the top news in New York trade. They fell to 468K compared to 550K expected. The US dollar fell 20 pips against the yen to a session low of 120.58 on the headlines but the pair eventually recovered back to 121.05.

The drop was driven by a 62% decline in sales in the northeast, possibly due to tax changes. Other regions fell 11% the data may be another element that gives the Fed pause. Durable goods orders on Tuesday is a final indicator before the FOMC.

Early in Asia-Pacific trading, the New Zealand dollar dipped trade figures. Exports fell to 3.69B compared to 3.90B expected. Imports rose to 4.91B compared to 4.77B expected. As a result, the monthly trade deficit in Sept was 1.2B versus 0.825m expected. NZD/USD immediate fell 20 pips on the headlines but quickly recovered. The RBNZ decision is tomorrow.

The overall theme in the market is consolidation ahead of the central bank decisions this week. That's likely to continue on Tuesday.

USDJPY pulled lower after Japan Sep producer prices came in within expectations at 0.6% y/y following 0.8% in Aug.   Chinese industrial profits are due at 0130 GMT after an 8.8% y/y decline in August. We continue to keep close watch on the Shanghai Composite. It rose just 0.5% on Monday despite the rate cut.

Act Exp Prev GMT
New Home Sales (SEP)
468K 549K 529K Oct 26 14:00
New Home Sales (SEP) (m/m)
-11.5% -0.6% 5.2% Oct 26 14:00
Durable Goods Orders (SEP)
-1.1% -2.3% Oct 27 12:30
Durable Goods Orders ex Transportation (SEP)
0% 0% Oct 27 12:30
Exports (New Zealand dollars) (SEP)
3.69B 3.90B 3.71B Oct 26 21:45
Imports (New Zealand dollars) (SEP)
4.91B 4.78B 4.79B Oct 26 21:45

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