• Europe and Japan Conspire To Push U.S. stocks lower
• Greece Plays For Time
• U.S. House Sales Show Signs Of Improvement

Newly printed weak export data from Japan that does little to assuage the gloom facing the global economy conspired to send U.S. stocks lower at today’s open. Thus, the Dow Jones industrial average opened down 0.2 percent at 13,183.29, while the broader S&P 500 was flat, at 1,411.99.

As forex traders got to grips with the US session ahead of domestic house start figures followed by keenly awaited FOMC minutes, Greek and EU officials were beginning a series of meetings aimed at securing yet more time to push through reforms. It has already been reported that Angela Merkel has declined to comment if she thinks Greece’s request should ceded. We’re also hearing talk of that there will be no decisions made on Greece until October, according to Eurogroup chief Jean-Claude Juncker. Speaking on Luxembourg TV ahead of his meeting with Greek PM Antonis Samaras today, Juncker apparently said: “We’re waiting for the troika report [...] As soon as we have that we can make a decision. In any case there won’t be a decision on Greece before October.”

Data just published by the National Association of Realtors (NAR) in the US says the number of first-time homebuyers, critical to a housing rebound, rose to 34 percent of sales, up slightly from June. In a healthy market, housing starts comprise about 40 percent of sales. The figure demonstrates how, even with near-record-low mortgage rates, many would-be buyers are experiencing difficulty qualifying for loans, or simply cannot afford the larger down payments being required by banks these days.

The NAR report also suggest sales of previously occupied homes rose to 4.47 million in July, a 2.3 percent increase from the previous month. It was the first increase in three months, with Americans having bought more homes in July than in June. Prices also rose, tending to reinforce evidence that the housing market is recovering, albeit at a painfully slow and uneven pace. July sales were below the 4.6 million reached in April and May, whilst the annual sales ledger is below the 5.5 million mark that economists consider healthy.

Immediately on the news, the EUR/USD rallied from its declining momentum that had reached as low as 1.2431. The pair has now rebounded 50 pips to a 1.2483 high.

We now have a few minutes to await the August 1 FOMC minutes. Investors will be focused on the reading to find any kind of hints about the next monetary policy steps.

“Given the lack of base formation, the recent strength in EUR is seen as a rebound within an underlying downtrend”, wrote MIG Bank analyst Bijoy Kar, looking signs of weakness coupled with overbought conditions to find new opportunities to go short on the pair.

Drew Hillier. Editor, ForexSpace.com