Pending home sales were stronger than expected at +1.7% vs the +1.0% consensus but CAD and AUD are at the lows of US trading.
The US housing recovery is no longer a fresh story and the market seems to have priced in a modest (less than 5%) price increase in 2013. What is increasingly clear is that a housing recovery won’t be enough to grow the economy faster than 2%.
In addition, the consumer or manufacturing will need to contribute. Needless to say, it’s all in limbo because the government has tied an anchor around the neck of the economy.