U.S. Treasury yields experienced a slight dip as investors carefully considered the economic outlook in anticipation of crucial data releases. The upcoming second-quarter GDP figures and June’s personal consumption expenditures price index are eagerly awaited, as they serve as the Fed’s preferred inflation gauge. These reports could offer valuable insights into the potential monetary policy decisions that may be made at next week’s Fed meeting.
The housing market experienced a notable slowdown in June, with existing home sales declining by 5.4% compared to May. This drop, resulting in 3.89 million units being sold on a seasonally adjusted, annualized basis, marks the slowest sales pace since December. The impact of mortgage rates exceeding 7% in April and May has contributed to this decline. Despite the decrease in sales, the median price of existing homes sold in June reached an all-time high of $426,900, reflecting a 4.1% year-over-year increase.
Housing inventory saw a significant increase of 23.4% from the previous year, reaching 1.32 million units. This boost in supply, along with longer listing times, indicates a gradual transition from a seller’s market to a buyer’s market. However, it is important to note that the current supply levels remain below the 6-month threshold considered balanced in the housing market.
The euro and sterling both experienced a marginal 0.02% decrease against the dollar, while the dollar itself declined by 0.14% against the yen. Despite this, gold continued to maintain its value amid the strength of the greenback. The short-term prospects for the dollar appear positive, backed by technical factors and market positioning as market participants gear up for key economic data releases and the upcoming Fed meeting.
Traders are advised to exercise caution and remain attentive to potential volatility in the market, as U.S. political developments and evolving economic indicators are likely to influence market dynamics in the coming weeks. The housing market, in particular, may witness further adjustments if the inventory continues to rise, possibly leading to increased sales activity or downward pressure on prices.
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