EM Asian currencies likely to advance somewhat temporarily versus dollar due to dropped DXY Index, says Scotiabank
U.S. housing starts fall in January, housing activity likely to rebound significantly
U.S. housing starts dropped in the month of January, reversing some of the firm print recorded in the prior month. On a month-on-month basis, housing starts fell 3.6 percent. The softness was mainly seen in the single-family sector where starts dropped 5.9 percent sequentially, while starts of multifamily structures continued to rise 0.7 percent. The three-month moving average stood at 1.525, its highest since 2007 and suggests a solid performance for housing starts and residential construction in the first quarter.
Starts at current levels are possibly unsustainable and would not extrapolate the trend of recent months, noted Barclays in a research. Housing is believed to be on track for a moderate rebound after a soft 2018, and smoothing over the month-to-month volatility, the underlying trend is one of steady rebound. Starts have been trending higher since February 2019.
“We take our signal from the single-family starts data given the higher volatility in the multi-family component – and we interpret the reports of recent months as suggesting that activity has been improving steadily. Specifically, we see a significant improvement in housing activity relative to the end of 2018, when the lagged effects of previous monetary policy tightening and tax changes were weighing on the sector”, added Barclays..