Horrid New Home Sales Data Prompts Only a Modest Bounce
On several occasions in the past, we've seen pronounced reactions to big beats/misses in New Home Sales data. Today's miss is every bit as big as past 'big misses' (the ones that resulted in big moves), yet we're not seeing much of a response. Fannie 3.5s have only recovered 2 ticks and 10yr yields are only down to 2.5052 from 2.518.
Does this suggest a stronger inherent bias back toward higher yields? Or do the big miss and big revision to last month's New Home Sales data suggest that it's too volatile at the moment to pay much mind? Maybe some of both? Whatever the case, the modest bounce is enough to alleviate the reprice risk that had been building ahead of the data. Here's a run-down of the report:
- June New Home sales 406k vs 479k forecast (annual rate)
- In percentage terms -8.1 percent is biggest drop since July 2013.
- May revised to 442k from 504k
- Northeast down 20 percent, Midwest -8.2, South -9.5, West -1.9
- Supply at 5.8 months, highest since October 2011