US: Consumer Confidence and Case-Shiller home price index in the limelight - Nomura

Analysts at Nomura point out that in the US session Conference Board’s Consumer Confidence and Case-Shiller home price index will be the keenly watched economic releases today.

Key Quotes

“The Conference Board’s consumer confidence index fell to 117.9 in May from 119.4 in April. In June, we think consumer sentiment likely continued to deteriorate modestly, to 117.5 (Consensus: 116.0). The preliminary estimate for June by the University of Michigan consumer survey suggests a moderation in optimism as consumers, particularly self-identified Republicans and independents, became more skeptical about the current administration’s ability to enact its agenda. Although the unemployment rate has fallen notably since January and income gains have been steady, it is possible that a downward shift in expectations regarding the administration’s policy promises may have outweighed healthy consumer fundamentals.” 

“Case-Shiller home price index: The Case-Shiller 20-city home price index increased 5.89% y-o-y in March, a slight uptick from the February increase of 5.85%. The recent increase has outpaced the average year-on-year rate in 2016 as the number of homes for sale on the market lags high demand. On a monthly basis, this index was up 0.87%. Strong job gains in 2017, increases in personal income, and an influx of younger new home buyers may have contributed to increased demand in a low-inventory housing market, pushing up prices. However, continued increases in income and a recent downtick in mortgage rates may alleviate the adverse impact of rising prices on home affordability, to a certain degree. Consensus expects an increase of 5.90% y-o-y for April.”