Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace. With this trend expected to continue and with interest rates also likely to stay on hold for longer than previously anticipated, the demand for homes is likely to strengthen in the months ahead.
The average projection of policy makers’ forecasts in December called for four quarter-point rate increases in 2016; however, fed fund futures markets indicated ahead of the FOMC statement that traders see just one or two hikes coming in 2016. The announcement had a direct effect on the S&P500 as it dropped 1.3% straight after the statement, as traders expressed disappointment that the Feb appeared less dovish than the market had hoped.
The dollar initially strengthened, but quickly lost its gains and returned to around where it was trading previously during the day. Both Brent and WTI oil prices held above $30 a barrel.
US also released the MoM New Home Sales Change, which is the number of new homes sold the previous month. There were 544,000 homes sold up from 491,000 the month before, further proving the health of the US economy in recent months.
GBP: 09:30 Gross Domestic product (QoQ) (Q4) Expected to rise to 0.5% from 0.4%
GBP: 09:30 Gross Domestic product (YoY) (Q4) Expected to fall from 2.1% to 1.9%
USD: 13.30 Initial Jobless Claims expected to fall from 293,000 to 282,000
USD: 13.30 Durable Goods Orders (Dec) expected to fall to -0.6% from 0%