US: Empire state survey and NAHB housing index in focus - Nomura

The research team at Nomura suggests that the Empire state survey and NAHB housing index will be the key economic releases for today’s US session.

Key Quotes

“Empire State Survey: The March Empire State survey showed continued optimism among manufacturers in the Greater New York area. The headline business conditions index slipped to 16.4 in March from 18.7 in February, but the latest reading is still very high. The new orders index improved strongly, reaching 21.3, up 7.8pp from the prior month. The strong increase suggests momentum may sustain in coming months. However, it appears unlikely that business sentiment will improve further as other surveys showed some moderation. The ISM manufacturing index slipped 1pp to 57 in March while the Philly Fed manufacturing index declined to 32.8 from 43.3. Given the continued uncertainty regarding healthcare and tax reform, we expect a headline index print of 16.0 in April – a touch lower than the elevated reading in March.”

“NAHB housing index: This housing market index increased further to 71 in March from 65 in February, indicating continued optimism among home-builders. The steady pace of job creation and income growth implies demand from potential homebuyers remained healthy. The index of prospective buyer traffic improved further in March, consistent with its recent trend. Moreover, considering a strong increase in mortgage applications for home purchases in March, we believe demand from potential buyers sustained in April. However, the uncertainty regarding government policy lingers, which may affect home-builder sentiment in coming months. We expect them to have remained optimistic, but believe a further improvement in sentiment is unlikely. Therefore, we expect a steady reading of 71 for this index in April.”