- Aneta Markowska, chief U.S. economist at Societe Generale
The first part of important fundamentals from the world's largest economy is already out, and as it was expected, it surprised markets to the upside, meaning the economy is recovering from first quarter's slump. A report from the Conference Board showed a gauge of consumer mood, picked up to 90.9 this month from 85.2 in June, also beating analysts' forecasts of a 85.5 reading. Consumer spending accounts for around 70% of overall economic activity, hence, stronger sentiment points at faster growth in the coming months. On the back of stronger sentiment, the EUR/USD currency pair moved closer to 1.34-mark, trading just 12 pips above it.
Another important part of the economy– housing market is sending worrying signs, as property values in 20 cities expanded at the slowest pace in more than a year in May, another sign of a lull in the U.S. housing market. According to the S&P/Case-Shiller report a corresponding index, a proxy of selling price of a single-family home in 20 metropolitan areas, increased just 9.3%, posting the smallest annual changes since February 2013. Strict lending requirements and higher mortgage rates are bridling sales, meaning consumers will have to lower their expectations of how much they can get for their homes, damping consumer confidence.
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