New home sales jumped 7.5% after brief slump


HIA new home sales jumped 7.5% in November, more than recovering from a 3.8% decline in October. The increase was driven by a 30.5% increase in unit sales, although ex-unit sales rose 3.6%.

The data points to an ongoing pickup in demand for new residential housing.

Share Markets: 

A disappointing US jobs report was the highlight for financial markets on Friday.

Equity markets initially fell, but then recovered as investors were likely weighing up the potential for more monetary stimulus with the health of the economy.  

The S&P500 gained 0.2% and the Nasdaq rose 0.4% while the Dow dropped 0.1%.


US treasuries rose (yields fell) on the weak job report.

The report casts some doubt that the Federal Reserve will taper or reduce its bond purchases as quickly as previously thought, although comments from Fed officials suggested that they remained on course to taper further.

Foreign Exchange:

The US dollar fell against major currencies on the jobs report - the dollar index hit a one-week low.

The Australian dollar reacted little to local and Chinese data on Friday, but lifted on the jobs report on a stronger US dollar.

It touched above US$0.90, although it remains close to the range of US$0.88-$0.90, where it has been for nearly two months.


Commodity prices rallied on hopes that the Federal Reserve would pull back stimulus slower than previously thought.

The broad CRB index rose more than 1% on Friday. The gains were led by gold, which hit a 3-week high. Other commodities including copper and oil also gained.

Copper prices may have also been boosted by strong Chinese import data.


China's trade surplus narrowed from US$33.8bn to US$25.6bn in December. Exports slowed from an annual pace of 12.7% to 4.3% in the year.

Meanwhile, imports strengthened from an annual pace of 5.3% to 8.3% in the year. The import data provides a positive sign for Chinese domestic demand, and some reassurance that China is not slowing too sharply.


French industrial production grew 1.3% in November, although factory output rose a more modest 0.2%

United Kingdom:

Industrial production was flat, as, as was the factory component.

In other data, construction spending fell 4.0% in November.

United States: 

US non-farm payrolls rose just 74k in December, well below consensus estimates (197k).

While November's gain was revised upwards by 38k to 241k, Q4 has now just seen 172k jobs growth average per month, little changed from 167k in Q3. 

The jobless rate fell from 7.0% to 6.7%, again largely due to a fall in work force participation, although the modest pace of job growth is also assisting.

The disappointing job report has been attributed to the unusually cold weather which is viewed as temporary. That said, it might increase the chance that the Federal Reserve would pause tapering its asset purchases at its meeting in January, although recent comments from Fed officials suggested otherwise.

Richmond Fed President Lacker saw the job report in a positive light, and pointed out the sharp fall in the unemployment rate and that might have been special factors at play.

St Louis Fed President Bullard has said "I would be disinclined to react to one month's number… For now we're on a program where we're likely to continue to taper at subsequent meetings". 

IBD-TIPP economic sentiment rose for a third straight month from 43.1 to 45.2 in January. The economic outlook and personal finances components improved, but federal policy assessment deteriorated.

Wholesale inventories rose 0.5% in November.

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