The U.S. Treasury yields experienced a slight dip recently, as investors closely monitor the economic outlook in anticipation of key data releases. Of particular interest are the upcoming second-quarter GDP figures and June’s personal consumption expenditures price index, which serves as the Federal Reserve’s preferred inflation gauge. These reports will provide valuable insights into potential monetary policy decisions at the Fed meeting scheduled for next week.
Recent data shows that existing home sales in June dropped by 5.4% compared to May, resulting in 3.89 million units sold on a seasonally adjusted, annualized basis. This marks the slowest sales pace seen since December, likely influenced by mortgage rates exceeding 7% in April and May. Despite this decline, the median price of existing homes sold in June reached an all-time high of $426,900, up by 4.1% year-over-year. Moreover, housing inventory has increased by 23.4% from the previous year, totaling 1.32 million units and representing a 4.1-month supply. While this rise in supply and longer listing times suggest a shift towards a buyer’s market, the supply remains below the balanced 6-month level.
The euro and sterling experienced a slight 0.02% decline against the dollar, while the dollar itself decreased by 0.14% against the yen. Gold prices saw continuous support despite the strength of the greenback. Although the short-term outlook for the dollar seems bullish due to technical factors and market positioning leading up to critical economic data and the upcoming Fed meeting, traders are advised to remain cautious. Uncertainties surrounding U.S. political developments and evolving economic indicators could introduce volatility into the market in the following weeks.
Looking ahead, the housing market may witness further changes if inventory levels continue to rise. This could potentially result in either increased sales activity or downward pressure on prices. As investors await the release of essential economic data and the outcome of the upcoming Fed meeting, market participants should remain attentive to potential shifts in market dynamics and adjust their strategies accordingly.