Release Explanation: Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. Retail Sales, CPI, and PCE in the US. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the US consumer. There is a very strong impact on the sentiment towards the US Dollar from this report.
Trade Desk Thoughts: Pending sales of existing single-family homes, condos and co-ops increased 6.3% on a seasonally adjusted annual basis in December, the National Association of Realtors said today. It was the first increase in signed contracts in the last four months.
"Buyers who can obtain credit are being attracted into the market because prices and rates are low," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "The government should create a new "good" bank which will write good quality mortgages at very low rates of interest, probably around 4.0%. That will help to further stimulate demand and stabilize the housing market."
The largest sales increase was in the South, which saw a sales increase of 13.0%. The West saw the biggest decline, with sales falling 3.7%.
For the year to December, sales increased 2.1%.
Forex Technical Reaction: Stocks were little changed in early trading, and most currencies have been trading within a narrow range. Stocks got a boost after the report and the euro and pound rose against the greenback.