EUR/USD Turns Bearish, As US Economy Shows Signs of Further Improvement

• October consumer confidence 113.8 points vs 108.3 expected
• September confidence was 109.3 points

Details:

• Expectations 91.3  points vs 86.6 prior
• Present situation 147.4  143.4 prior
• Jobs hard to get 10.6 points 13.4 prior

There was a 13-year high in short-term inflation expectations. Notably along with that was a rise in intentions to buy big-ticket items. That suggests that people are no longer anticipating prices to retrace.

“Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October-a sign that consumer spending will continue to support economic growth through the final months of 2021. Likewise, nearly half of respondents (47.6%) said they intend to take a vacation within the next six months-the highest level since February 2020, a reflection of the ongoing resurgence in consumers’ willingness to travel and spend on in-person services.”

US New Home Sales Report, September 2021

• September new home sales 800K vs 760K expected
• Prior was 740K (revised to 702K)
• Single family home sales MoM +14.0% vs +1.5% prior
• Median prices $408,800 vs $390,900 prior
• Average prices $451,700 vs $443,200 prior
• Months of supply 5.7 vs 6.1 months of supply prior

In August, there was a sharp fall in sales in the midwest and that continued this month with a 1.5% decline but that was swamped by a 32.3% rise in the northeast and a 17.5% rise in the south. The mini buyers’ strike in US housing is likely over.