Recap :


Another sign that the housing market, like the labor market, is increasingly bifurcated: many homes are in areas that are not desirable. Via BI:

Against that, you have SF: (via NYT)

San Francisco adds only a paltry 1,500 units of housing per year. Some 28,500 new residents arrived between 2000 and 2010, another 32,000 between 2010 and 2013.


  • Australia Private CapEx declined -4.2% vs -1.5% exp and -5.2% prev.
  • Canada Current Account improved to -12.4Bn in 1Q vs -13Bn exp and -16Bn prev.
  • US Jobless Claims declined to 300k last week vs 318k exp and 327k prev
  • US Pending Home Sales rose 0.4% MoM in April vs 1.0% exp. This is the second consecutive rise. Strength in the Midwest offset weakness in the West.
  • ECB Executive Board member Mersch said yesterday that the June ECB meeting could yield “not one, but a combination of different measures”, noting that the implementation of measures would depend on the state of preparation. On a potential policy rate cut, Mersch was quoted saying that “when we talk about interest rate changes, we assume the corridor will stay unchanged”, highlighting that a narrowing of the corridor could "put constraints on the money market”.
  • FT: (via GS) BoE MPC member Martin Weale indicated that the MPC’s emphasis on a gradual path of interest rate rises implied “you do have to start sooner”. Mr Weale indicated two other points in the interview. First, he seems unlikely to vote for a rate rise as soon as next month: “We can wait a bit longer”. Second, he shed some light on his interpretation of what was a ‘gradual’ pace of rate rises, being “no more than” 25bp rises in Bank Rate per quarter.
  • Blackrock’s Larry Fink on Black Swans… his #1 Black Swan is the impact technology will have on jobs. This is a big problem for EMs – the #1 way EMs have become wealthy is by selling cheap labor to the world. That isn’t happening any longer as technology "guts" jobs. EMs don’t have this manufacturing opportunity. In agriculture, "we are going to need a lot less human involvement" in this industry going forward. "We don’t have enough global GDP to support the needs of EM job seekers" as economies everywhere becomes more technological efficient. This process will lead to more social unrest and more inequality (those people w/good educations and skills can earn a decent living while uneducated people won’t). One way around this is to transform from a manufacturing-based economy to a services-based one – China is in the process of doing this. (h/t Jordan)
  • The BoJ made changes to their Rinban operations, reducing the size of longer end purchases but increasing shorter end purchases

Upcoming Data:

  • Thu: New ZealandBuilding Permits, UK Gfk Consumer Confidence, Japan Unemployment, CPI
  • Fri: Month End, Canada GDP, US Personal Income, Core PCE Deflator, Chicago PMI,
  • Weekend: China Mfg PMI, AU Mfg PMI, Building Approvals, Japan Capital Spending, PMI,
  • Mon: UK PMI, GermanyCPI, US ISM
  • Tue: RBA, UK Nationwide House Px, EU Unemployment, CPI, Turkey CPI, Australia GDP,
  • Wed: EU Services PMI, US ADP Employment, BoC, US ISM Non-Mfg, Australia Trade Balance, HSBC Services PMI