US existing home sales fell sharply in January with a decline of 4.9% reported. The figure, well below the 2.4% increase of December and expectations for a decline of 0.8%, left the annual pace of sales at 4.97m, a low not seen since April 2014. Sales of both homes and condos fell during the month, down 5.1% and 3.5% respectively, while the median sales price dropped 4.1% to $199,600.

US economic conditions improved modestly in January with the Chicago Fed’s National Activity Index rising to 0.13. The reading was higher than the downwardly-revised 0.07 level of December with three of the survey’s four sub-categories improving during the month.

Manufacturing activity across Texas and surrounds deteriorated sharply in February with the Dallas Fed manufacturing index sliding to -11.2. The reading, below the -4.4 level of January, was the lowest level seen since April 2013. While the production measure held steady at 0.7pts, in a sign that this may well fall away in the months ahead, the survey’s new orders index plummeted to -12.2 from -7.7 in January, a level not seen since June 2009.

German business confidence inched higher in February with the IFO business climate index rising to 106.8. The reading, above the 106.7 level of January but below expectations for an increase to 107.7, was the highest level seen since July last year. The survey’s expectations measure increased 0.5pts to 102.5 while current conditions, unexpectedly, dipped to 111.3 from 111.7 in January.

UK retail turnover tumbled unexpectedly in February with the CBI distributive trades balance falling to +1. The reading, below the +39 level of January and expectations for a decline to +34, was the lowest level seen since November 2013. From a year earlier 30% of firms reported higher sales volumes while 29% reported falls, an outcome that left the overall balance at +1.


The Day Ahead (AEDT)

The ASX 200 looks set for early gains with SPI futures pointing to a rise of 15pts on the open. BHP Billiton, Scentre, QBE and Flight Centre headline the corporate earnings calendar, Wesfarmers, Origin Energy, Bendigo Bank and AGL trade ex-dividend. Look for weakness in the energy sector following further substantial declines in the crude price overnight.

The AUDUSD has recovered some of yesterday’s declines overnight with the pair currently fetching .7803. With markets in a holding pattern until Yellen speaks this evening expect the moves today, particularly given a lack of regional drivers, to be limited in nature. Support is found at .7780 and .7750, resistance at .7825 and again at .7850.

Mainland Chinese markets remain closed for Lunar New Year celebrations.

Janet Yellen, US Federal Reserve Chair, speaks before the Senate Banking Committee in Washington at 2am tomorrow morning.

Greek economic reforms, originally scheduled to be released Monday, will be presented to the Eurogroup this evening.

Data releases this evening include consumer confidence, services PMI, CaseShiiler house price index and Richmond Fed manufacturing index from the States, Eurozone inflation, German Q4 GDP along with the latest French business climate index.


Heatmap Feb 24


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