NEWS / Foreign Exchange

Under a scenario of higher than expected corporate earnings we expect durable goods orders to re-bounce during September

Existing Home Sales (September, Wednesday, 10.00 am)

F: 5.65 C: 5.5 P: 5.75

The decrease in existing home sales could be larger than previously anticipated, according to the National Association of Realtors, if the housing market follows its current path. Existing home sales are expected to be approximately 10 percent less than 2006. The outlook for 2007 has worsen as foreclosures soared and credit market troubles continue, our current annualized rate forecast is 5.65 million for 2007 down from 6.48 million during 2006. Existing single-family home sales decreased by 4.3 percent during August, compared with July, which is the lowest growth rate in five years.

Durable Goods Orders (September, Thursday 10:00 am)

F: 1.8% C: -4.9% P: 5.9%

During August durable goods orders retreated by 4.9 percent as business spending fell, mostly due to concerns about the effect that the recent financial turmoil could have on corporate profits. Given the higher than expected 3Q earnings releases, we expect durable goods orders to rebounce, slightly, increasing by 1.8 percent during September, compared to the August reading. Also, orders during August for non-defense capital goods excluding aircrafts fell by approximately 0.7 percent.

New Home Sales (September, Thursday, 10.00 am)

F: 785 C: 795 P: 870

New home sales are projected to fall to 805K this year according to National Association of Realtors, which is a decrease of 23 percent from the approximately 1 million sold during 2006. This negative change means that 2007 would be the worst year in a decade. We maintain our current annualized rate forecast of 785K, or 1.2 percent less than last month, during September.

Consumer Sentiment (October, Friday 10:00 am)

F: 82.6 C: 83.4 P: 83.4

We expect a small improvement on the consumer sentiment final reading for October. The University of Michigan consumer sentiment index was 82 for the first part of October, falling 1.4 percent month-over-month and 12.4 percent year-over-year. This reading is consistent with our previous forecast of 82.4, which was below the consensus forecast of 84.0, up a bit from the final September reading of 83.4.