News combines to give Cable brief respite


US existing home sales slipped 0.4% to 5.190 mln in April, disappointing expectations for a strong rebound following the 4.9% drop to a 5.210 mln rate in March. It’s the slowest pace since September’s 5.180 mln, which was the worst since April 2015. The weakness was in single family sales which declined 1.1% after March’s 4.9% tumble. Condo/coop sales jumped 5.6%, more than erasing March’s 5.3% decline. Regionally, sales were down 4.5% in the Northeast and 0.4% in the South, but rose 1.8% in the West and were unchanged in the Midwest. The months’ supply increased to 4.2 from 3.8 (revised from 3.9). The median sales price increased to $267,300 versus $259,700 (revised from $259,400).

Across the Atlantic, Sterling rotated higher on Brexit-related news, specifically news that UK Prime Minister May will address reporters at 4 PM in London (13:00 GMT) regarding details of a new Brexit deal. Cable rallied by over 50 pips in making a high of 1.2745, though has since pulled back under 1.2720. There is also news, stemming from Sky, that the Prime Minister will concede to the UK remaining in the EU’s customs union, although it’s not clear for how long (whether permanent or up until the next general election). It’s also unclear if Labour will be willing be to play ball after stating last week that it doesn’t wish to do a deal with the Tories due to the party’s instability.

The Dollar slipped slightly after the modest existing home sales miss, taking EURUSD a few points higher toward 1.1155, and USDJPY to 110.55 from 110.60.

Stuart Cowell

Head Market Analyst

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