Unexpected Rise In US Existing Home Sales

US existing home sales came out better than expected, and posted the the first gain in seven months in February. The National Association of Realtors said Monday purchases increased 2.9% to an annual rate of 5.03 million, vs the 4.85 million projected. This was better than January’s 4.89 million pace. However, house prices fell by the most in four decades since the organization began keeping records in 1968, with the median home value dropping 8.2% from a year earlier. As home inventories remain high due to rising bank seizures, don’t expect the data to signify a bottoming of the housing market. Meanwhile, the less noted Chicago Fed National Activity index dropped sharply in February, and its three-month moving average “indicates an increasing likelihood that a recession has begun,” according to news release issued Monday. February index reading was at -1.04 in Feb, a decline from -0.68 in January. Three-month moving average was at -0.87 in February, from -0.73 in January. Three-month averages below -0.70 signals greater chance that recession is underway.

Forex Trading

The US dollar got a positive boost from the improvement in home sales data, and rose against major currencies like the Euro, Swiss franc, Japanese yen and British pound. USD/JPY climbed above 100.00 following the rise in US stocks. USD/CHF broke 50 pips above 1.0200 to an intraday high around 1.0250, and next bull target is around 1.0290-1.0300. EUR/USD retraced down to 1.5340, and if this level is broken, it may next target 1.5280-1.5300.

Tuesday:

Canada retail sales 1230 GMT

US S&P/Case-Shiller house price 1300 GMT

US consumer confidence 1400 GMT

Japan merchandise trade balance 2350 GMT

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