US: Chicago PMI and pending home sales in the limelight - Nomura

Analysts at Nomura suggest that Chicago PMI and pending home sales are going to be the key economic releases for today’s US session.

Key Quotes

“Reflecting a recent uptick in relevant sentiment indices, we expect the Chicago PMI to increase 2.1pp to 61.0 in August, indicating a slight improvement in business sentiment. Relevant components of the Philly Fed index in August showed a strong rebound while the Empire State manufacturing survey exhibited a similar pattern. Incoming economic data suggest an economy continuing to grow above trend. Further, with businesses hearing more about tax reform and less about the recent healthcare debacle in Congress, we expect business sentiment to remain elevated in August.”

“Pending home sales: With the housing market continuing to experience a supply shortage, July could report weak pending home sales. The outlook for a recovery in housing inventory looks bleak as home buyers continue to grapple with a dearth of available units. Despite strong fundamentals for housing demand, including steady income and job growth, prices outpacing income growth could reduce affordability, putting more downward pressure on pending sales.”