Goldilocks US data stabilises markets

Good US data last night. Inflation eased (chart from Calculated Risk):

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.5% annualized rate) in July. The 16% trimmed-mean Consumer Price Index also increased 0.1% (1.6% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.1% (1.1% annualized rate) in July. The CPI less food and energy increased 0.1% (1.2% annualized rate) on a seasonally adjusted basis.

And housing starts and permits firmed:

Housing Starts:
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,093,000. This is 15.7 percent above the revised June estimate of 945,000 and is 21.7 percent above the July 2013 rate of 898,000.

Single-family housing starts in July were at a rate of 656,000; this is 8.3 percent above the revised June figure of 606,000. The July rate for units in buildings with five units or more was 423,000.
emphasis added 

Building Permits:
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,052,000. This is 8.1 percent above the revised June rate of 973,000 and is 7.7 percent above the July 2013 estimate of 977,000.

Single-family authorizations in July were at a rate of 640,000; this is 0.9 percent above the revised June figure of 634,000. Authorizations of units in buildings with five units or more were at a rate of 382,000 in July.

The perfect tonic for equities, which rallied again a half percent. And there’s scope for more with oil continuing it’s big sell off and having now reversed its entire ISIS inspired 2014 gains:

Gold eased and the US bonds gave back some of their recent gains. It was an odd night to choose to do it given the data flow but the US dollar broke out:

And that hit the Aussie, back down to 93 cents (or perhaps US markets can read and yesterday’s dovish RBA minutes finally caught up with markets).

So, macro data and markets went in opposite directions last night given benign US data suggested, if anything, that there’s easing pressure to bring forward monetary tightening. An evening of Goldilocks data that stabilised everything.