Home Sales up to 3 Year high
Just on the eve of the US Federal Reserve’s (FED) presentation of their monthly minutes, US home resoles rose to their highest level in three years. Home sales for July suggested that a sharp increase in borrowing costs is only having a limited impact on the housing market recovery. Home sales jumped 6,5 %% to an annual rate of 5,39 million units. Analysts had forecasted a much smaller increase.
The currencies fluctuated heavily during Wednesday before FED-minutes presentation. Euro/USD jumped above 1.34 and fall back to 1.3386 with major banks taking big short exposures betting on a stronger dollar and steep falls in both Euro and Yen. Emerging market currencies especially in Asia have in the last days fallen rather dramatically against the USD with the Indian rupee being the big loser. Oil prices are relatively steady with Brent crude trading below USD 110. Gold rose to USD 1376, but loses ground before FED minute presentation.
Greece’s financial obligations are again under heavy scrutiny. German Finance Minister Wolfgang Schaeuble stated on Tuesday that Greece would need a third bailout. His election campaign statement came the day before today’s arrival of European Central Bank (ECB) officials to Athens to scrutinize Greece’s progress in meeting its international bailout obligations. Since 2010 Greece has been bailed out with 240 million Euros by the ECB, International Monetary Fund and European Union.
Yields on Greek bond rose immediately to new yearly highs after the Greek government lately has tried to give the impression that a turnaround in the economy is starting to take place. Greece has for the last 6 – 7 years been through a dramatic recession. The austerity measures ordained by the “Troika” of ECB, IMF and EU, have created a record high number of unemployment. The anti-austerity opposition was quick to seize on Schaeuble’s comments pointing to yet another round of painful austerity.
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