US Home Sales Fell in January

U.S. home sales unexpectedly fell for a second straight month in January, weighed down by a persistent shortage of houses that is pushing up prices and keeping first-time buyers out of the market.

The National Association of Realtors said on Wednesday that existing home sales dropped 3.2 percent to a seasonally adjusted annual rate of 5.38 million units last month. December’s sales pace was revised down to 5.56 million units from the previously reported 5.57 million units.



Economists polled by Reuters had forecast existing home sales rising 0.8 percent to a rate of 5.60 million units in January. Sales fell in all four regions last month. Existing home sales, which account for about 90 percent of U.S. home sales, declined 4.8 percent on a year-on-year basis in January.

via CNBC

USD Higher Ahead of Minutes

The dollar rose to its highest level in a week on Wednesday and world stocks fell for the third day as investors braced for minutes from the Fed’s last policy meeting to see if they would herald more rises in interest rates and global bond yields.



Wall Street looked set for a weaker session, with equity futures down around 0.2 percent and the VIX volatility gauge up for the third day in a row.

The dollar index, which measures the greenback against a basket of peers, rose 0.2 percent. The index has bounced almost 1 percent so far this week, after slumping 1.5 percent the previous week to its lowest level in three years [FRX/].

MSCI’s world index of stocks was down 0.1 percent, set for its third straight decline this week, as a down day in Europe offset earlier gains in Asia.

Investor attention is on the minutes of the Fed’s last policy meeting in late January, due at 1900 GMT. The last readings of U.S. wages and inflation came in higher than expected, with some blaming the numbers for a violent sell-off in stocks earlier this month.

via Reuters

UK Posts Strong Quarterly Productivity Growth in December

The UK has seen the strongest two quarters of productivity growth since the recession of 2008, according to the latest data.

Output per hour rose 0.8% in the three months to December, the Office for National Statistics said. It follows growth of 0.9% in the previous period.



There was also a better than expected rise in wages. Excluding bonuses, earnings rose by 2.5% year-on-year.

However, unemployment edged higher, but still remains low at 4.4%.

The growth in productivity – as measured by the amount of work produced per working hour – will provide encouragement to policy makers who have wrestled with the challenge of low productivity growth since the financial crisis.

via BBC

Eurozone Growth Cools Down But Remains Steady

Eurozone business activity continued to rise at a steep pace in February, albeit with the rate of expansion cooling from the near 12-year high recorded in January. Price pressures and employment growth also remained elevated, though likewise saw rates of increase ease slightly.



Business optimism about the coming year meanwhile ticked higher.

The headline IHS Markit Eurozone PMI fell from 58.8 in January to 57.5 in February, according to the estimate, which is based on approximately 85% of usual final replies.

The slower growth of business activity reflected an easing in the rate of increase of new orders which, while elevated, slipped to a five-month low.

By country, growth in Germany came in at a three month low, while in France the composite PMI moderated to the weakest for four months.

However, in both cases the PMI readings remained at levels indicative of strong growth, close to recent seven-year highs. Business activity growth meanwhile also slowed across the rest of the eurozone, though still registered the second-largest expansion in nearly 12 years

via Market Flash Eurozone PMI

UK PM Warned by 62 MPs to Stand Up to EU Regarding Brexit

Theresa May has been warned Britain cannot become simply a “ruler-taker” after Brexit, in a letter signed by 62 Tory MPs including Jacob Rees-Mogg this week.

The letter urged Theresa May to stick to the Brexit ideals outlined in her rousing Lancaster House speech one year ago.

The Tory MPs offered their “continued and strong” support for Mrs May’s leadership before strongly suggesting six ways in which the PM could strengthen the country’s position.



The letter was written by former Remainer John Penrose and signed by another 61 MPs, including hardline Brexiteer Mr Rees-Mogg, former cabinet member Priti Patel and former party leader Iain Duncan Smith.

The letter, which is date-stamped February 16 and was shared on social media last night, emphasised the group’s support for leaving both the EU customs union and single market – before pointedly offering “suggestions” on how Mrs May could achieve her goals.

via Express

Latam Currencies Lower on Tuesday

Latin American currencies weakened on Tuesday as the U.S. dollar strengthened worldwide after hitting a three-year low last week.

Currencies from Brazil , Mexico and Colombia weakened between 0.3 percent and 0.9 percent. The Chilean peso was barely changed as profit-taking partially offset the global upswing in the U.S. currency.

Concerns that the United States could pursue a weaker dollar policy and by mounting worries about the U.S. budget deficit have driven the dollar sharply lower this year.



Some investors turned to bargain hunting on Tuesday, however, ahead of a series of U.S. debt auctions.

Stock markets in the region were mostly up, with Brazil’s benchmark Bovespa stock index leading gains even after policymakers ditched a plan to curb social security spending.

Investors saw the plan as key to boosting long-term economic growth, but had mostly given up on it after months of wrangling in Congress failed to advance the unpopular bill.

“Markets already expected that the pension reform would be buried,” said Ricardo Silva, a trader at Correparti brokerage.

Moody’s Investors Service on Tuesday said the government’s decision was credit negative and will “severely restrict” policymakers’ abilities to comply with budget rules. Shares in power utility Centrais Elétricas Brasileiras SA were the biggest gainers on the benchmark index as investors bet the government would turn its efforts to the privatization of the state-owned company.

via Kitco

Gold Drops After USD Regains Momentum

Gold prices were clobbered on Tuesday, with the commodity booking its sharpest daily decline in more than a year, against a backdrop of a strengthening dollar and stabilizing equities.

April gold GCJ8, -1.78% fell $25.10, or 1.9%, to $1,331.20 an ounce, marking the sharpest drop for actively traded futures since Dec. 14, 2016, when gold sank by $33.90, or 2.9% according to FactSet data. Meanwhile, March silver SIH8, -1.75% dropped 27.4 cents, or 1.6%, to $16.438 an ounce.

Precious metals lost ground as the dollar sprung higher following last week’s sharp decline, which has mostly extended a protracted downtrend for the commodity-pegged currency. The ICE Dollar Index DXY, +0.60% was up 0.6% to 89.724, as the greenback made strides against the euro, pound and yen. A weaker dollar can boost commodities priced in dollars, because it makes them cheaper to buy for holders of other currencies.



The popular exchange-traded SPDR Gold Shares GLD, -1.47% fell 1.5%, meanwhile, and the silver- focused ETF, the iShares Silver Trust SLV, -1.49% was trading 1.2% lower late Tuesday.

Last week saw gold register its sharpest weekly gain in more than a year, as it fed off the dollar’s slump. Gold fell modestly on Monday in electronic trade, albeit in thinner action, as many traders took the day off for the Presidents Day holiday.

Peter Hug, global trading director at Kitco Metals Inc., said the focus on rising U.S. debt, from infrastructure spending, tax cuts and a weaker dollar, threaten to push bond yields higher and that dynamic is weighing on precious metals.

via MarketWatch

Oil Mixed with WTI Rising Due to Canadian Pipeline Issues

Oil prices were mixed Tuesday, with the U.S. benchmark gaining ground on its global counterpart thanks to Canadian pipeline problems.

West Texas Intermediate futures for April delivery CLJ8, +0.10%  rose 53 cents, or 0.9%, to $62.08 a barrel. Brent crude LCOJ8, -0.84% the global benchmark, lost 8 cents, or 0.1%, to $65.59 a barrel. The move left the gap between Brent and WTI prices the narrowest in six months.

The narrowing of the spread between the two benchmarks turns in large part on what’s occurring in Cushing, Okla., the Nymex delivery hub for WTI futures. Data from the Energy Information Administration released on Feb. 14 showed the amount of oil in Cushing dropped to 32.7 million barrels in the week ended Feb. 9, from 36.3 million the previous week.


West Texas Intermediate graph

Analysts said pipeline issues were the main driver.

“For one thing, less crude oil is being transported from Canada to Cushing due to the restricted capacity of the Keystone pipeline. And for another, new pipeline capacities mean more crude oil is leaving Cushing,” wrote analysts at Commerzbank, in a Tuesday note.

But the Commerzbank analysts questioned whether the spread could continue to narrow, noting that light Louisiana sweet crude, the reference type for comparable oil on the U.S. Gulf Coast, costs only $2 a barrel more than WTI. That provides insufficient incentive for Gulf Coast refineries to buy WTI from Cushing.

Meanwhile, refinery maintenance in several regions including Europe is putting a damper demand for crude causing a divergence of the crude grades.

“You still have those low stocks in Cushing supporting WTI on the other hand you have stock builds in the U.S. Gulf,” said Olivier Jakob, managing director of Petromatrix, an oil research firm in Switzerland. “There are also some signs of physical pressure in the crude oil market in Europe, partly due to lower crude oil demand due to refinery maintenance.”

via MarketWatch

Macron Inspires New UK Party Intent on Blocking Brexit

A new British party inspired by French President Emmanuel Macron’s movement launched a campaign on Monday to thwart Brexit by convincing MPs to block any EU withdrawal deal Prime Minister Theresa May can strike.Sandra Khadhouri, together with fellow Renew party members James Clarke and James Torrance, speaks at the launch of the new political party in London, Britain, February 19, 2018. REUTERS/Peter NichollsWith just over 13 months left until Britain is due to leave the EU, opponents of Brexit are exploring ways to stop what they call Britain’s biggest mistake since World War Two.The Renew party, founded last year after Macron’s En Marche! movement propelled him to power, said it would target pro-Brexit MPs in constituencies with high levels of support for EU membership.

Source: New British party inspired by Macron seeks to overturn Brexit – Reuters

Don’t go barking up the wrong tree in the Year of the Dog

Dollar Regains Ground Ahead of Fed Minutes

Cryptocurrencies Could Fall to Near-Zero at Any Time

Cryptocurrencies are a nascent asset class and could fall violently at any time, the founder of blockchain network Ethereum warned on Saturday.

“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time,” Vitalik Buterin said on Twitter. “Don’t put in more money than you can afford to lose.”

Buterin added: “If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.”

Cryptocurrencies have recovered slightly from a severe sell-off which saw the market lose as much as $100 billion in market value in a single day. Bitcoin recovered to a price above $10,000 last week after falling as low as $5,947.40 the week before.

CNBC

Don’t go barking up the wrong tree in the Year of the Dog

Dollar Regains Ground Ahead of Fed Minutes