US Homebuilder Sentiment Vaults To 6-month High In October

Economic

Summary:

U.S. homebuilder sentiment jumped to a six-month high in October amid hopes that declining mortgage rates would stimulate demand for housing and help reduce an inventory overhang that has hampered new housing construction.

The National Association of Home Builders/Wells Fargo Housing Market index increased five points to 37 this month, the highest reading since April. It, however, remained below the 50 breakeven point for the 18th straight month. Economists polled by Reuters had forecast the index edging up to 33.

Higher mortgage rates have dampened housing demand, resulting in a glut of unsold new homes on the market. Though mortgage rates have eased as the Federal Reserve resumed cutting interest rates, growing economic uncertainty amid a lackluster labor market is keeping prospective buyers on the sidelines.

"While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging," said NAHB chairman Buddy Hughes. "The housing market has some areas with firm demand, including ... ongoing solid conditions for the luxury market. However, most home buyers are still on the sidelines."

The survey's measure of current sales conditions increased four points to 38 this month, while its gauge of future sales jumped nine points to 54. A measure of prospective buyer traffic posted a four-point gain to 25.

Builders continued to reduce house prices to lure buyers. Thirty-eight percent reported cutting prices. The average price reduction rose to 6%, the largest cut in a year, after averaging 5% for several months. The use of sales incentives was unchanged at 65%.

New housing inventory decreased in August after hovering for several months at levels last seen in late 2007. A shutdown of the government amid a standoff over funding has suspended the collection and publication of economic data. The NAHB estimated new single-family building permits rebounded in September after plunging in August to the lowest level in more than two years.

"Based on modeling of historical data, the October increase for the HMI suggests an approximate 3% increase for the September single-family permit data on a seasonally adjusted annual rate basis," said NAHB chief economist Robert Dietz.

Source: TradingView

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Adam

Economic

European Central Bank Governing Council member Joachim Nagel said that while inflation will remain sticky, the current path for interest rates remains clear.

Speaking to CNBC's Karen Tso at the IMF and World Bank annual meetings in Washington on Wednesday, the Deutsche Bundesbank president said: "I do not see any reason to change anything if there is not something new coming, and I do not see where it might come from."

In an exclusive interview, Nagel said global tariff tensions had created a "lose-lose situation for everyone," but he cited the recent strength of the German economy in particular for providing optimism in Europe.

German economic institutes have recently revised up their growth forcasts for 2025, while Goldman Sachs predicts the economy will continue to expand 1.4% in 2026 and 1.8% in 2027.

Nagel flagged private credit as an area of concern, saying the size of the market and "spillover from less regulated market participants" was something regulators would need to monitor closely.

In separate exclusive interview, ECB Governing Council member François Villeroy de Galhau said he recommended "agile pragmatism" when it comes to the path for interest rates, adding: "We are in a good position ... but a good position is not a fixed position."

Diverging from the views of his ECB colleague Nagel, France's central bank chief suggested that the next rate move was more likely to be a rate cut than a rate hike.

This comes as he welcomed some political clarity in France, as newly reinstated Prime Minsiter Sébastien Lecornu suspended the controversial pension plan that has sat at the heart of France's political deadlock. Villeroy said that lawmakers now need to tackle the fiscal uncertainty.

However, Pierre Wunsch, governor of the National Bank of Belgium, said in a separate exclusive interview that the probability the central bank would cut again has been "receding over the last few weeks or months," in part due to the strength of the euro.

"Service inflation is still at 3%, so that's something we need to monitor. Goods, energy, and non-energy industrial goods are close to zero or 1%, so that pulls inflation downwards," he said, noting that inflation in 2026 is expected to be lower.

Investors have reacted positively to this week's political developments.

Source: cnbc

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Michelle

Political

President Trump later in the day Wednesday verbalized that he's mulling a land operation or strikes in Venezuela following a New York Times report that same day which said he had authorized CIA covert operations targeting the Maduro government.

"We are certainly looking at land now because we’ve got the sea under control. We’ve had a couple of days now where there isn’t a boat to be found," Trump told reporters inside the Oval Office when asked about the issue. Below is direct confirmation from the Commander-in-Chief:

"I authorized for two reasons, really. No. 1, they have emptied their prisons into the United States of America, they came in through the border," Trump said. "A lot of drugs coming in from Venezuela, and a lot of drugs come in through the sea."

"But we’re going to stop them by land also," he added. The NYT report had made clear that the end goal would be overthrowing socialist strongman Nicolas Maduro.

We should note that by this logic, the United States would be justified in invading Mexico and waging war against other regional countries as well.

Congress has been missing in action and US Presidents have long pursued regime change in countries the US deems 'enemies' with or without the consent of the American people or its representatives.

Trump was also asked point blank if his goal is the end of President Nicolas Maduro. Trump dodged this one, responding:

"Wouldn’t it be a ridiculous question for me to answer?" Trump said. "But I think Venezuela is feeling heat."

"We’re not going to let our country be ruined because other people want to drop, as you say, their worst ... we’re not going to take them."

So far 27 people of unknown identities (or nationalities) have died in five rounds of attacks on boats which were believed to be smuggling drugs. The Pentagon has publicized these drone strikes by releasing video in each case.

It's become something that both Trump and Hegseth, as well as Vice President J.D. Vance have openly boasted about, despite Venezuela having a third world army and not much in the way of aerial defenses to speak of.

Where's DNI Tulsi Gabbard in all of this? Any pushback?

Washington typically picks such fights with weak or Third World countries - it wouldn't dare take such brazen action against countries like China or North Korea, which are nuclear armed and have serious militaries.

Source: Zero Hedge

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Adam

Commodity

Oil prices were stable on Thursday as market traders prepared for a potential halt to India's Russian oil imports, which could boost demand for supplies from elsewhere.

Brent crude futures rose 54 cents, or 0.87%, to $62.45 a barrel by 1135 GMT. U.S. West Texas Intermediate (WTI) futures climbed 56 cents, or 0.96%, to $58.83.

The contracts stabilised after touching their lowest since early May in the previous session on U.S.-China trade tensions.

U.S. President Donald Trump said Indian Prime Minister Narendra Modi had pledged on Wednesday that the country would stop buying from Russia, which is India's top supplier, accounting for about one-third of its oil imports.

Some Indian refiners are preparing to cut Russian oil imports, with expectations of a gradual reduction, three sources familiar with the matter told Reuters.

"This is a positive development for the crude oil price as it would remove a big buyer (India) of Russian oil," said Tony Sycamore, a market analyst at IG.

However, India said on Thursday that its two main goals were to ensure stable energy prices and secure supply, making no reference to Trump's comments.

Russia said it was confident that its energy partnership with India would continue.

Meanwhile, Russian products supply has been hampered by persistent Ukrainian drone strikes on its refineries.

Russia's energy minister said Russian refineries will postpone planned maintenance to saturate the market on Wednesday.

Ukraine attacked the Saratov refinery overnight, while Rosneft's Ufaneftekhim halted crude processing in one of its four crude units after an attack on Wednesday.

"The plummeting availability of Russian products and crude oil ought to set a floor under the market. This year’s low of $58.40 per barrel for Brent, reached in April, may well prove a cumbersome task to breach," said PVM analyst Tamas Varga.

U.S. Treasury Secretary Scott Bessent also said on Wednesday that he told Japanese Finance Minister Katsunobu Kato that the Trump administration expects Japan to stop importing Russian energy. Japan is not a major importer of Russian crude.

Elsewhere, the British government announced new sanctions on Wednesday, directly targeting Russia's Rosneft and Lukoil - two of the world's biggest energy companies.

The sanctioned entities include four oil terminals, the private refiner Shandong Yulong Petrochemical in China, 44 tankers in the "shadow fleet" transporting Russian oil, and Nayara Energy Limited, a Russian-owned refinery in India.

Source: reuters

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Adam

Commodity

Gold rose to a record as heightened US-China frictions and bets that the Federal Reserve will press on with monetary easing supported demand.

Bullion has risen more than 5% so far this week and touched a peak above $4,243 an ounce on Thursday, extending a breakneck rally that began in August. The buying spree has spread to other precious metals, with silver surging more than 3% on Wednesday as the London market remained tight.

Traders are piling into wagers on at least one outsized US rate cut by year-end, while Fed Chair Jerome Powell signaled this week the central bank is on track to deliver another quarter-point reduction later this month. Lower borrowing costs tend to benefit precious metals, which don’t pay interest.

Gold Climbs to Record on US-China Tensions and Fed Rate-Cut Bets_1

President Donald Trump declared Wednesday that the US was now locked in a trade war with China, spurring fears of prolonged damage to the global economy that could boost gold’s haven appeal.

The ongoing US government shutdown has also aided bullion, as has the so-called debasement trade, where investors pull away from sovereign debt and currencies to protect themselves from runaway budget deficits. Enthusiastic central-bank buying and inflows to exchange-traded funds have also underpinned gold’s 60% surge this year.

“Nothing has changed for me: For the last $2,000 per ounce we’ve been bullish and everything that’s taken us here is still bullish,” Michael Widmer, head of metals research at Bank of America Corp., told Bloomberg Television. Nevertheless, “ETF inflows last month were up 880% year-over-year and that is ultimately a concern,” since it’s unsustainable.

The silver market, meanwhile, has been gripped by a lack of liquidity in London, sparking a worldwide hunt for the metal and driving benchmark prices to soar above futures in New York. Prices touched a record above $53 an ounce this week, before edging lower on Thursday.

Gold Climbs to Record on US-China Tensions and Fed Rate-Cut Bets_2

Over the past week, more than 15 million ounces of silver have been withdrawn from warehouses linked to the Comex futures exchange in New York. Much of that is likely headed to London, where it should help ease market tightness — though solid ETF inflows of almost 11 million ounces over that period have further eroded London stocks.

What Bloomberg strategists say...

The ETF investment flows that helped drive silver to record highs are starting to stall. ...The plateau in silver ETFs doesn’t mean investors are exiting, but it suggests the accumulation wave that fueled silver’s run is losing momentum. Meanwhile, it’s gold that’s attracting the steadier capital.

Source: Bloomberg

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Glendon

Economic

Forex

The International Monetary Fund revised up Asia's economic growth forecast on Thursday, but warned of risks to the outlook from trade policy uncertainty and geopolitical tensions.

Economic activity in the Asia-Pacific was holding up better than expected in April, despite the region bearing the brunt of US tariffs, said Krishna Srinivasan, director of the IMF's Asia-Pacific Department.

"The region is once again set to contribute the lion's share of global growth — about 60%, both this year and in 2026," Srinivasan told a news conference.

The IMF expects Asia's economy to expand 4.5% in 2025, slowing from 4.6% last year but up 0.6 percentage point from its estimate made in April, he said. It projects growth to slow to 4.1% in 2026.

Exports were supported by firms front-loading shipments ahead of the tariff hikes and a surge in intra-regional trade, he said. A technology boom driven by artificial intelligence also lifted exports, especially from South Korea and Japan.

Booming equity markets, lower long-term borrowing costs and a weak dollar have also helped, Srinivasan said.

But risks to the outlook were skewed to the downside as the "dust on tariffs has not settled yet" and could still increase, he said.

Interest rates could rise again especially if trade policy uncertainty or geopolitical tensions intensify, while tightening financial conditions could increase the debt burden for some countries and stifle growth, Srinivasan said.

Concerted efforts to pursue reforms to boost trade and investment will help fuel durable growth for years to come, he added.

Source: Theedgemarkets

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Warren Takunda

Economic

Nine months after Donald Trump took office, promising to reduce prices on “day one”, a clear majority of Americans say their monthly costs have risen by between $100 and $749, according to an exclusive new poll conducted for the Guardian.

The president has continued to insist that there is “virtually no inflation”. “Prices are ‘WAY DOWN’ in the USA,” Trump wrote on social media in late August.

Yet according to a new Harris poll, Americans are still reporting soaring inflation and are increasingly pessimistic about the economy.

When asked to estimate how much their regular monthly household costs have increased from last year, 74% of those surveyed said they had seen increases of at least $100, according to the poll. 75% of Americans Report Soaring Prices as Trump Claims Inflation ‘Over’_1

75% of Americans Report Soaring Prices as Trump Claims Inflation ‘Over’_1

The increases were reported across the political spectrum, with both Democrats and Republicans, along with independents, reporting price hikes.

Trump’s re-election victory came as voters soured on Joe Biden’s economic policies and the legacy of Covid-era inflation. “Starting on day one, we will end inflation and make America affordable again,” Trump said in a rally in August 2024.

The inflation rate has declined from an annual rate of 3% in January, when Trump took office, to 2.9% annually in August (the last figures published). It has fallen substantially from its peak of over 9% in 2022 but remains uncomfortably ahead of the Federal Reserve’s target of 2%.

The poll’s findings echo those of the Yale Budget Lab, whose economists have calculated that households will see an average increase of $2,300 in costs a year due to Trump’s tariffs – an average of $191 per month. That research calculates overall price level increases and the effect the increases will have on average household income figures. 75% of Americans Report Soaring Prices as Trump Claims Inflation ‘Over’_2

75% of Americans Report Soaring Prices as Trump Claims Inflation ‘Over’_2

Many believe the 2024 presidential election was a referendum on Biden’s economy. Inflation soared in the years after the pandemic while wages struggled to keep up, leaving many Americans feeling like their paychecks were losing power. While the Democratic presidential candidate, Kamala Harris, fought to present a new economic vision focused on costs, for many voters it was too late.

But with just over a year until the midterm elections, Trump’s economy isn’t looking much brighter. A slight majority (54%) of Americans said they believed the economy was in a recession, five percentage points more than Harris’s Guardian poll last September. The majority of Americans (53%) also think the economy is getting worse, compared with 48% who said the same last year.

Inflation was rated as the biggest risk to the US economy when those polled were asked to pick one issue from a list of threats, including immigration, US democracy and tariffs. Inflation was the top risk for Republicans (31%) and independents (33%), and it was the second biggest risk for Democrats (29%), behind tariffs. 75% of Americans Report Soaring Prices as Trump Claims Inflation ‘Over’_3

75% of Americans Report Soaring Prices as Trump Claims Inflation ‘Over’_3

But the parties diverge over where they see the cracks. Immigration was the second biggest risk for Republicans, with 20% saying it was the biggest risk to the economy, compared with just 8% of Democrats and independents. Meanwhile, tariffs were a big risk for many Democrats (31%) and independents (24%).

When asked about the driving force behind price increases, Republicans were far more likely (45%) to say they were standard yearly changes due to inflation, compared with 22% of Democrats and 27% of independents. Meanwhile, 55% of Democrats and 55% of independents said they thought price increases were driven by current economic policies set out by the government. About the same percentage of people across the political spectrum, slightly over 20%, said the changes were caused by businesses overcharging customers to boost profits.

While Republicans seem far less likely to blame tariffs, and thus the Trump administration, on the price increases than Democrats, independents seemed just as willing as Democrats to point to tariffs as an issue.

This is a considerable flip from last year. Last September, when Biden was still president, independents were more aligned with Republicans on pessimism around the economy. The pessimism probably lent itself to votes for Trump: though independents were split between Trump and Biden in 2024, the group had favored Biden by 9% in the 2020 election, according to the Pew Research Center.

But while dissatisfaction over the economy was a boon for Republicans last election, it may not translate to an easy pathway to the midterms for Democrats.

The poll showed that the pessimism about the economy among independents, though shared with Democrats, doesn’t necessarily translate to support for the party.

Among all those polled, optimism for the Democratic party (25%) has dropped since last September (37%), while pessimism (39%) has increased.

Pessimism is slightly higher for Republicans (41%) compared with last year, while optimism for the Republican party has stayed the same since last year, just over 30%.

Boosts to Republican optimism come from within the party: among Republicans, 60% said they were optimistic for their party, compared with 42% of Democrats who said the same about their own party.

Pessimism among independents is higher for the Republican party this year (43%) compared with last year (33%), though it’s now about the same as those also pessimistic about the Democratic party (41%).

But despite the decline in support for Democrats, economic policies coming from Democrats’ policies, including a federal ban on price gouging for food and grocery prices, expanding the child tax credit, and increasing tax rates on long-term capital gains for millionaires, are still popular among voters, and are far more popular than policies that Trump ran on and has implemented. The support for Democratic policies mirrors results that were seen last September.

The ban on price gouging, which was proposed by Harris’s campaign, was still the most popular policy, with 45% of Americans saying it would strengthen the economy. Trump’s top policy, with 43% support, was eliminating taxes on social security – something his administration has yet to act on.

Despite being the core of Trump’s economic agenda, mass deportation of migrants (24%), tax cuts (22%) and tariffs on foreign goods (22%) were some of the least popular policies.