US: Consumer confidence and home price index in the limelight - Nomura

Research Team at Nomura, suggests that the consumer confidence and the Case-Shiller home price index will be the key economic releases for the day.

Key Quotes

“Case-Shiller home price index: This index has fallen for three consecutive months on a m-o-m basis, the longest streak since it declined for 21 consecutive months between 2010 and 2012. Some of the weakness could be attributable to imperfect seasonal adjustment factors, as the m-o-m change rate has shown more rapid appreciation in the winter and slower increases/declines during summer months. But further declines, especially through the fall months, could mean that home prices may be settling into a more stable equilibrium following a recovery in home prices post-housing market crash. Consensus is looking for a decline of 0.1% m-o-m in July. This should translate into a y-o-y increase of 4.95% in July, modestly lower from 5.13% y-o-y in June.

Consumer Confidence: According to this report, consumer confidence improved in August as consumers were generally more optimistic about current and future economic conditions. The labor market differential index improved to 2.6 from 0.9, the highest reading since January 2008 and suggests labor market conditions are becoming more favorable for workers. However, equity price declines in mid-September could have dinged sentiment. Plus, the preliminary estimate of the University of Michigan’s consumer sentiment was unchanged from the prior month. All these recent developments suggest to us that confidence should tilt to the downside. Therefore, we forecast that consumer confidence declined to 97.0 in September from 101.1 in August.”