A quick review of the issues and events driving the markets this past week... and what's on tap for the week ahead.

Weekly Market Snapshot

July 27, 2015

"Everyone feels the door closing on really low interest rates"

— Glenn Kelman, CEO of real-estate brokerage Redfin, on the psychology behind the recent surge in home sales (Wall Street Journal, July 23 2015)

The week in review...


US: Housing demand, meet housing supply In the market for existing homes, a key factor holding back sales has been the reluctance of homeowners to put their houses on the market — reducing available inventory. But June's housing sales figures signal that might be changing.. Closings on existing homes rose 3.2% to a 5.49 mn annualized rate, the most since Feb 2007, according to the National Association of Realtors. Compared to June of last year, purchases rose 9.6% on a seasonally-adjusted basis. One possible reason for increased interest in selling: the median price of an existing home rose 6.5% from the year-ago June to $236,400, the highest on record before adjusting for inflation.

Even at the current increased pace of selling volume, demand is outstripping supply: it would take 5 months to sell the houses currently on offer, compared to May's 5.1 months -- a sign that supply hasn't overshot continued strong demand, and median selling prices could have room to grow.

Brazil: Budget balancing act In slashing projections for the size of its 2015 full-year primary budget surplus from 1.2% of GDP to 0.15%, President Dilma Rousseff's economic team conceded that economic growth has been too weak to boost tax revenue; the original forecast of a modest 0.8% growth rate was revised downward, to a decline of -1.49%. Stubbornly high inflation, combined with reduced government spending and declining exports, have taken their toll; the Brazilian currency, the Real, has slid over 20% since the end of January, to 3.286 per US dollar,1 driving import prices up in the face of reduced demand for exports


Political victories, at a price All major players in the recent months' bailout drama won their battles — except for the Greek economy. Prime Minister Tsipras kept his Syriza coalition in power after two parliamentary votes for a bailout tougher than the one he had rejected — with increased popularity due to opposition to the previous proposal. German Finance Minister Schäuble gained popularity at home by sticking to his guns, and IMF Managing Director Lagarde was transformed from villain to hero by conceding that Greece will require significant debt relief in order to regain its economic footing. 

Meanwhile, capital controls remain in place despite the banks' reopening, with cash now rationed on a weekly rather than a daily basis. Greece's past-due payments to the IMF and other creditors were made, but only with the help of an emergency loan funded in part by those very creditors. And the negotiations over the details of the bailout plan have only now begun in earnest. 


South Korea: Tough quarter Growth in 2Q was a disappointing 2.2% year-on-year, according to the central bank — the slowest pace since 2013. Quarter-on-quarter growth also disappointed, at 0.3% vs. 1Q. Lackluster growth was worsened by the panic over the outbreak of Middle East Respiratory Syndrome (MERS), which has claimed 36 lives since the first case was reported in the country in May. The benchmark interest rate was cut to a record low of 1.5% in June; there's widespread belief that additional rate cuts may be in the offing.

1 July 23, 2015, 4:30 PM ET

Signs of the times:

Oil Approaches a Bear Market as U.S. Supply Gain Expands Glut — Bloomberg
New Jobless Claims Fall to 41-Year Low — The New York Times
Crisis in Greece overshadows campaign in Portuguese poll — Financial Times
Japan Exports Rise Most in Five Months on Cars, Electronics -- Bloomberg

Sources: Bloomberg, Wall Street Journal, Financial Times, New York Times, Xinhua, China Daily, Market News International

...And the week ahead:

GLOBAL ECONOMIC CALENDAR: July 26 – August 1, 2015



Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

July 26



France: Tour de France concludes (cycling)


July 27

Durable goods orders

Mexico: trade balance


Hong Kong: trade
China: industrial profits

Jul 28

20-city home prices, consumer confidence, FOMC meets


Italy: business confidence


July 29

US oil inventory, pending home sales,
FOMC (Fed) monetary policy decision

Brazil: rate decision

Germany: consumer confidence
UK: mortgage approvals

Japan: retail sales

Jul 30

2Q GDP (first estimate), jobless claims

Mexico: rate decision

Eurozone: consumer confidence

Japan: industrial output

Jul 31

Employment costs, House of Representatives scheduled to depart for a five-week recess

Brazil: primary budget balance
Canada: GDP


S. Korea: business confidence
Japan: consumer prices, jobless rate
Taiwan: GDP

Aug 1

Puerto Rico $36.3 mn principal payment due



S. Korea: trade


A primary budget surplus is a government's budget surplus, before interest payments on government debt are taken into account. A primary budget deficit refers to a budget shortfall.

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The International Monetary Fund (IMF) is an international organization of member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements.

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When will the Fed raise the Fed Funds target rate?


When will the Fed raise the Fed Funds target rate?

Not until 2016

Previous month Poll

Will the current wave of central bank easing jump-start the world's economies?

No - The real issues are structural - real progress on labor reform and regulatory excess will have more impact
No - Deflation is already taking hold, making monetary policy changes ineffective
Yes - The US model shows that monetary easing can help economies heal in the medium term
Yes, but it will take even  longer than it did in the US, and the delay will have a negative political impact