FX Markets Quietly Steady after Existing Home Sales
The forex markets are quietly steady in early US session. Existing home sales in US dropped merely 0.2% in Jul from an upwardly revised 5.76m annualized rate to 5.75m. Though it marked a fifth consecutive decline in the existing home sales and is the lowest reading since Nov 02, it's slightly better than expectation of 5.70m. The inventory-to-sales ratio surged to 9.6 months, while the median existing price is down by 0.6%. The data offered no catalyst for more volatility in the markets. Focus will be shifting to tomorrow's Germany Ifo and Eurozone M3.
Speaking of the Euro, the highly anticipated speech from Trichet has just focused on productivity. He said that eurozone productivity growth is "disappointing" comparing with more resilient growth in the US. And it is also "not particularly high" compared with previous business cycles. Productivity growth has been stronger in the manufacturing sector. But in services sector, it has not improved much. Trichet has signaled a Sep hike in the Aug ECB meeting just before turmoil in the financial markets. Markets hoped for some hints from Trichet on whether ECB will still hike or not in today's speech.
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