The severe winter weather and its impact on the U.S. housing
market will be the focus of next week's calendar with the release
of housing starts and existing home sales, both expected to take a
sizable hit. According to estimates from the National Bank of
Canada, existing home sales likely fell to a seasonally-adjusted
annual rate of 4.70 million units in January from 4.87 million in
December. The same goes for housing starts which should show
another decline from December's 999,000 seasonally adjusted annual
pace. Permits, however, should remain fairly resilient as the
construction of new homes will resume once the snow melts.
Insulated from the weather are the consumer and producer price
indices, released on Wednesday and Friday, respectively.
Inflationary pressures will continue to grow at a very slow pace,
keeping in line with the current inflation rate of 1.6% and 1.5%
for the core.
Finally, the FOMC minutes from the December policy meeting -- in
which members voted to reduce QE by another $10 billion -- will be
released on Wednesday. Few surprises are expected, although the
minutes will be scrutinized for any indication that emerging market
weakness and weather-related drag on the economy might have caused
some members to reconsider further reductions. Although Yellen
dismissed the impact of emerging markets on Fed policy, the minutes
will be dissected for any signs of hesitation from other Fed
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