A Jump in U.K. House Prices Could Push BoE to End QE
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EUR/USD – Euro-zone construction output fell 3.3% in February which was the most in more than two years. A stretch of cold weather during the period delay projects and dampened activity. Activity was 15.2% off of the pace from a year ago during the same time frame as several members experienced significant slowdowns. Spain saw a decline of 6.0% in addition to weakness sin Romania (-13.8%) and Slovenia (-9.2%) which offset a 1.0% gain in Germany. Strength from the region’s largest economy is a positive sign, especially if the other country’s can rebound with improving weather. To discuss and other topics, please visit the EUR/USD forum.
GBP/USD – U.K. house prices rose 2.6% in April according to Rightmove-the country’s largest property website. Home values were 6.0% higher from a year ago suggesting that the market is strengthening. However, we have started to see the number of mortgage approvals begin to slip which could put downward pressure on prices. Nevertheless, higher home values bodes well for domestic growth which could lead BoE to bring an end to their asset purchase program. The central bank has refrained from commenting on monetary policy until after the May 6th elections which leaves the upcoming minutes from their past meeting as the only insight markets will get before they decide again. To discuss and other topics, please visit the GBP/USD forum.
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