• Building permits beat estimates by a huge margin

  • A significant increase in housing starts

  • US Dollar Index (USDIDX on xStation5) fails to sink below previous low

A pack of data from the US housing markets has been released recently. US housing market is doing exceptionally well as both building permits and housing starts prints surprised investors to the upside. USD gains with USDIDX moving further away from the 88.48 level marking previous do file download link

US housing market has been constantly expanding as of late. Source: Macrobond, XTB Research

Housing starts print has shown a solid data with 1326k houses began building in January 2018. This is a huge beat as market consensus called for a reading 1234k. It also indicates 9.7% MoM increase against prior month. Looking at building permits one can see that this data also proved to be much better-than-expected showing 1396k against 1300k expected. In MoM terms building permits rose by 7.4% in the previous month. It is worth to note that this is the best US housing market print since mid-2007.

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Homebuilder confidence at the highest levels since mid-1999. Source: Bloomberg

This stellar surprise may be explained by the recent pick-up in the homebuilders confidence. As we can see at the chart above the confidence within building industry has been constantly improving in post-crisis era. At the turn of 2017/18 it has shown the highest value since mid-1999.

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USDIDX retreats from 88.48 handle. Source: xStation5

Taking a look at the US Dollar Index (USDIDX) chart one can see that after recent renewed weakness USD is doing exceptionally good today. The index breached 88.48 level marking previous low in the early trading. However, later on it managed to pare initial losses moving significantly higher. At the time of writing USD is the strongest currency in the G10 basket.