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The Greenback’s Move might Calm today in light of the Housing Data. 2007-08-16 02:43:00
The greenback continues its bullish rally yesterday after the release of several major news events that came out quite positive and showed that the American economy is starting to show weak signals of recuperation. The Empire State Business Conditions Index boosted up to 25.1 from a previous release of 18.0, and the TIC Net Long-Term Transactions also showed an unbelievable figure of 120.9B which is a great surprise from the expectations of around 60B. The US Core CPI was released inline with expectation at 0.2%, and the CPI came a bit lower at 0.1%.
The housing and credit concerns are still here and the crisis hasn’t been resolved yet. In order to make cash available, central banks worldwide have pumped billions in funds to banks over the past week, but along with this, Federal Reserve officials are insisting that there are no signs that the sub-prime issue is harming the broader economy and an interest-rate cut is not yet needed despite the fact that the fund injection could Read more:light
, Housing
USD Reversal All Across The Board 2007-08-15 02:40:47
There was some positive news for the greenback yesterday as the headline US Producer Price Index surprised on the upside releasing at 0.6 %, beating the expected figure of 0.1 % and this rise in producer inflation increases speculation that the Fed will cut rates in the near future. There was more good news to follow for the greenback as the US trade deficit shrunk to 58.1 B. The market was expecting the trade deficit to rise from last months figure of 59.2 B to 61.0 B, so this surprisingly strong data was the main driver of the greenbacks bullish burst against most of the majors. The two key factors responsible for shrinking the US trade deficit is the drop in oil prices and the weak USD. The decrease oil prices means that the US is spending less on imports while a weak dollar is improving the US exporter’s ability to compete against the Chinese and US goods are gradually becoming a more preferable alternative to the foreign consumer. The greenback has been steadily pulling back Read more:Reversal
, Across
, Board
Strong Buying Signal USD/CHF 2007-08-14 10:26:22 There is a very distinct channel forming on the daily chart, and there has been a breach through the upper level of the channel. The RSI is floating in 50, meaning there is going to be strong momentum up. The width of the channel states that the move can last until, 1.2210, that is more than 100 pips profit.
look at the chart here:
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, Buying
The Greenback Pushes Higher. 2007-08-14 09:30:38
US core retail sales in July surprised positively with an increase to 0.4% and additionally the retail sales from June experienced an upward correction to 0.3% instead of the previously stated -0.7%. Strong growth was recorded in the areas of entertainment electronics, (1.0%) and in the clothing industry (1.3%). Strong consumer spending last month sheds positive light on economic growth and might, combined with the positive development in the major financial markets today, reduce investors’ fear and open the possibility for a partial recovery of the USD this week.
Yesterday the Fed, as well as other major central banks, continued injecting funds into the financial markets in order to assure liquidity on the back of the sub prime credit problems. After this strong intervention the question remains open if the Fed will cut interest rates at the upcoming meeting on September 18th. With the Feds interest not to be ruled by actions on the stock market and the sentiment of moderate un Read more:Higher
Sub-Prime Crisis Goes Global 2007-08-13 01:17:58
Last week was characterized with relatively empty US calendar aside from the Interest rate statement that was left unchanged. But the biggest event of last week was no doubt the declaration of the BNP Paribas bank, that all withdrawals are now frozen, and there shall be almost no liquidity in the European market. This indicates that the Sub-Prime crisis in the US is starting to be a much more global problem, as it is now bursting in full scale in Europe as well. The BNP statement caused the EUR/USD to fall down more than 150 pips, it appears that the fall was originated from EUR weakness far more than USD strength, yet it marked a bullish trading day for the USD all across the board.
As for this week, the US calendar will be quite full with major events, starting today with the US Retail Sales which is very important as it makes up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales b Read more:Crisis
, Global
, Goes Global
Daily Forex Technical Analysis 2007-08-13 01:16:59 Daily ForexTechnicalAnalysis
EUR/USD
The pair is floating at a wide range of 250 pips since the beginning of July, and the trend seems to continue. The daily chart is showing moderate bearish sentiment, and the hourlies support the bearish sentiment. 1.3600 is now the key support level, and if breach will probably deliver a clear sign that the EUR bearishness has begun, and the move down is now validated.
GBP/USD
After losing more than 400 pips in the last two weeks, the bearish sentiment continues. The daily charts are showing that there is still more room to run and the hourlies are showing a light oversold status. A preferable strategy might be to look for a good short entry point.
USD/JPY
The massive downtrend continues with full steam, as clearly demonstrated by the slow stochastic and RSI on the daily chart. The momentum is still very high and shows no signs of a stop. Next target price would be 117.20 and if it will be breached than it will probably validate the moves length t Read more:Daily
Uncertainty continues in the US markets. 2007-08-20 00:56:22
Last week’s news releases were mixed with positive outcomes like the better than expected Core Retail Sales at 0.4%, a PPI which grew from 0.1% to 0.6%, a decrease in the Trade Balance (-58.1B), and an increase of TIC Net Long-Term Transactions (120.9B), and on the other hand negative results such as an unchanged Core CPI at 0.2% and a CPI which decreased to 0.1%, Housing Stats as well as building permits also decreased while unemployment claims rose. Then on Friday the news showed an erosion of consumer sentiment from the previous value of 88.5 to 83.3 and could therewith indicate a reduction of consumer spending that could potentially weaken the USD.
This week will be relatively on news releases with only the Unemployment Claims on Thursday and Durable Good Orders and New Home Sales on Friday. A release of Core Durable Goods has an expected value of 0.6%, and a positive surprise on the site of Home Sales Value (above 826K) could strengthen the dollar.
To get hold on the liquidity Read more:Uncertainty
Daily Forex Technical Analysis 2007-08-20 00:54:24
EUR/USD
The pair is in the midst of a correction move initiated at 1.3400 and is now consolidating around 1.3500. the slow stochastic together with RSI on the 4 Hour chart indicate that there is still more momentum in that move, and the next target price now stands at 1.3550.
GBP/USD
There is a bullish cross forming on the slow stochastic of the daily chart, and a breach thought the 20 level on the RSI. Both indicators are showing a positive reversal with great momentum that might take the pair back to the 2.0000 levels.
USD/JPY
The incredible unwinding move seems to have bottomed at 111.60 and is going up since Friday. The daily studies are bullish, and the hourlies support the bullish notion. A breach through 115.50 will validate the move, and create a great opportunity for a long run buying position.
USD/CHF
The pair is in consolidation at the 38.2 level of the 1.2450/1.1820 move. After touching the 61.8 level and bouncing back to 1.2060. The daily studies show strong bullish mome Read more:Analysis
, Daily
, Forex
, Technical
The Markets Calm after the Big Storm. 2007-08-16 21:52:46 The greenback was traded within a range yesterday against the EUR and the GBP in complete contrast to what happened against the JPY which could be described only as complete madness, and an uninhibited fly up for the JPY. The US equity market continued to go down, and the flow of negative news kept coming. The housing data came weaker than expected as the housing starts was released at 1.38M and building permits showed a figure of 1.37M. Although the Housing market is the main focus of the US crisis, the releases did not shake the USD price movement.
The Philadelphia Fed Manufacturing Index was released a bit after with a weak figure of flat 0.0 after a wide consensus of 9.0 and added some volatility to this already wild day.
Today is expected to be a relatively quiet day in the news sector apart from the US Consumer Sentiment which expected to come in at 88.5 after a previous release of 90.4.
It looks as if the greenback’s strengthening move will probably continue against most of th Read more:Markets
, Storm
It’s a JPY Bonanza! 2007-08-16 20:05:28
The JPY is going wild and shooting up to levels we have not seen for a long time. The unwinding of the carry trades has accumulated an unbelievable momentum, taking the USD/JPY to 112.00, the EUR/JPY to 150.00, and the GBP/JPY to 222.00. The falling US markets, the crisis in high yield bonds, and the madness that has been going on in the Canadian and Australian markets also contributed to the Wild West atmosphere which made the USD/JPY lose more than 400 pips. It looks as if the Yen appreciation will continue in the short run In light of the world crisis, but there is no doubt that a correction move on the medium range is imminent. The difference in interest rates is still Hugh making the carry trades return a matter of time, and the insanity moves temporary.
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Sub Prime Crisis – what is it? And why it made the US market to crash? 2007-08-23 03:46:23
The most mentioned event in the ongoing recent global market conditions is the Sub Prime Crisis
that has been going on in the US recently. There have been many questions as to what caused the crisis, and why it affected the US markets to a level of a local colossal crash
. Here is a detailed explanation of the Sub Prime crisis process, step by step.
1. The US Mortgage banks give generous loans to home buyers with low credit rating which sometimes adds up to 90% from the Home value.
2. Many international financial organizations are buying the mortgage accounts at high credit risk.
3. A real estate bubble slowly starts to form in the US, as it is now affordable to be a homeowner.
4. The Fed’s are constantly raising the Rate from 1% in 2003 to 5.25% in 2006.
5. The housing prices are going down at more than 20% throughout 2006-2007, and the borrower’s equity value decreases significantly.
6. The problematic borrowers are slowly starting to default their mortgage payments and a re
The Light US Calender Continues. 2007-08-23 01:05:07
There was no real market moving news released yesterday from the U.S markets as the greenback lost some ground against the EUR and the GBP, while strengthening slightly versus the JPY touching the 115.95 level.
Although markets began stabilizing on Tuesday after the Fed Chairman Ben Bernanke assured he would use all available tools to break the fallout from the U.S. mortgage crisis, after the sub-prime situation continues to be problematic. Yesterday, Lehman global investment bank backed by mortgages became the first company on Wall Street to close its sub-prime lending unit causing its 1,200 employees to lose their jobs. In addition, according to data from the Mortgage Bankers Association, home loan applications fell 5.5% last week, the biggest decline in almost three months. As sub-prime situation continues to deteriorate, the likelihood of a Federal Reserve rate cut of 0.5% is increasing, and may occur even before the September 18′th FOMC meeting.
Today will be very ligh
USD/CHF At Key Level, Move is Imminent. 2007-08-23 01:04:17 There is a stable consolidation on the 1.2060 level for the fifth consecutive day. The daily charts are showing a triple doji formation, and are now in neutral territory. The 4 Hour chart support the neutral signals. The extremely neutral status of the pair indicates that a violent move is imminent, and could be on any direction. A recommended strategy might be to wait for a clear signal before entering the market.
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The Greenback Sails on Quiet Water. 2007-08-22 01:47:58 Yesterday was void of significant US economic releases, however there was a very important meeting comprising of US banking official to discuss the ever-growing credit crisis. U.S Treasury Secretary Paulson reaffirmed his opinion that the US economy will manage to deal with the growing credit concerns hinting that an imminent rate cut by the Fed may not be necessary. On the other hand US Senator Dodd that met with Paulson and Fed Chairman Bernanke urged the Fed to use all its available resources to put the brakes on the spreading credit crisis. Also yesterday the Fed injected another $3.75 B into the financial markets in an attempt to provide additional stability, the Fed has injected over $100 B last week. This action by the Fed coupled with Dodd’s and Paulson’s opposing rhetoric caused volatility all across the board and the USD had a mixed performance yesterday, as it continued on its bullish path against the EUR and the Sterling but lost ground against the JPY. The current mark Read more:Sails
, Quiet
The Greenback Recovery Continues 2007-08-21 03:16:27 Yesterday, USD Trading was flat against most currencies as equity markets seem to be stabilized. Analysts have cautioned investors with views that the credit crisis is far from ending and ensured that the USD will remain in a tight range against a number of currencies.
In other news, US short- term rate futures were strongly higher yesterday as the cash federal funds rate dropped below the Federal Reserve’s target rate and short-dated yields for U.S government debt fell sharply.
Today the USD will be affected by other currencies when no special news is due to be released, it is recommended to watch the Canadian Core Retail Sales and CPI which are mixed in their forecasts and a significant movement is expected to occur if figures surprise the market .
Crude oil fell by $1.30 a barrel to $70.68; however, tomorrow Crude Oil Inventories is due to be out we might see a bit of a movement in this commodity instrument .
There is an interesting situation going on as Fed credibility Read more:Recovery
Will Strong Housing Figures Take the Greenback Up? 2007-08-27 01:11:15
Last week was characterized with a relatively empty US calendar aside from the Durable Goods Orders and New Home Sales which were released on Friday. Both figures beat expectations, boosting the major U.S. stock indexes. The U.S. Durable Goods Orders was released at 5.9%, making it the biggest growth since September, while New Home Sales rose by 2.8%. The strong New Home Sales figures helped to calm market nerves, but despite strong U.S. economic data, the USD fell against most major currencies on Friday. In fact, traders are speculating that losses on sub-prime mortgages are still growing and housing crisis probably won’t be over that soon.
As for the following week, the US calendar will be quite full with major events, starting today with the US Existing Home Sales. The expectations for the Home Sales release are currently standing at 5.75M, the same as the last month’, and would probably not generate too much price movement if it would be released inline with expectat Read more:Strong
, Housing
, Figures
Daily Forex Technical Analysis 2007-08-27 01:10:18
EUR/USD
The pair is now floating around 1.3670 which is the 61.8% Fibonacci level of the 1.3850/1.3360 move. A break beyond that level will unleash a bullish move to the 1.3720 level. If the pair will be shy of the break than a correction move will be imminent.
GBP/USD
The cable is in the midst of strong uptrend and the hourlies are staring to become oversold. The 4 Hour chart is showing a second bearish cross on the slow stochastic and the dailies support the bearish notion. There are signals of a bearish correction that could take the pair to 2.0000 in the next move.
USD/JPY
After bottoming at 112.00, the pair is going back to its bullish formation. There is a two days consolidation on the 116.22 level, and with the RSI floating on the 40, we can assume that the next move up is very close. Next target price could be 117.00.
USD/CHF
After a 200 pips drop in the last two weeks, the pair is traded between key levels, and is shy of break. If a break through the 1.2000 will occur we sho Read more:Daily
, Forex
, Technical
, Analysis
Is the USD Backing Out Again? 2007-08-24 03:07:46 Yesterday the Unemployment Claims data was published in the US. The Labor Department reported that new claims for unemployment benefits dropped to 322K. Fewer people signed up for jobless benefits last week. This data signals a positive sign in the US market, taking in consideration the last major difficulties in the US market; housing, tighter credit, and turmoil on Wall Street in recent weeks, which caused a big wave of layoffs. National employment remained fairly study despite job losses related to the deep housing slump, which has persisted for more than a year. The unemployment rate did edge up to 4.6 percent in July, a six-month high. Yet, the rate is still low by historical standards. Still, the level of claims suggested that the employment climate remains in fairly good shape. Regarding the housing and the tighter credit difficulties, the Bank of America announced that it will invest money into the nation’s largest mortgage lender to help it better weather problems with d Read more:Backing
, Again
Packed US Calender Today - Chicago PMI on Tap. 2007-08-30 21:25:39
The past week has been relatively light on news events from the US, and the USD pegged currencies mostly moved in a range with no ground breaking sharp movements. Yesterday the GDP revision was released inline with expectations at 4.0% for the annualized and 2.7% for the deflator. The House Price Index came in a bit lower than expected at 0.2% but caused no significant move.
Today
will be a day packed with major news events, and traders should expect high volatility especially from the USD side of the board.
The first release at 12:30 GMT will be the Core Personal Consumption Expenditures -PCE Price Index which measures the rate of inflation experienced by consumers when purchasing goods and services, excluding Food and Energy. The forecast stands at 0.2% which is a bit higher than last month’s 0.1%. Next up will be Personal Income and Personal Spending where income is expected to remain unchanged at 0.4%, and spending is expected to rise a bit from 0.1% to 0.4%.
A bit later at 13: Read more:Packed
, Chicago
USD Bearishness Continues. 2007-08-30 07:26:56
Yesterday the greenback continued on its bearish decent as it lost ground against most of the majors. Earlier in the week investors were expecting the FOMC minutes to give some indication as to when the Fed will cut rates, however the FOMC minutes did not reveal much and this created uncertainty in the market of whether the Fed is actually planning to cut rates. There was no significant economic news released from the US yesterday, so the bearish momentum that was created by the discrete FOMC minutes continued throughout yesterdays trading. The main market movement today can be attributed to the US equity markets rebound after Teusday’s large sell off. This caused the USD to weaken sharply against the high yielder’s as carry trades were back in action but on the other hand the carry trade winding caused the USD to gain some lost ground against the JPY, so it was not all doom and gloom for the greenback. The US markets sudden rebound yesterday can be attributed to the leak
Uncertainty engulfs the greenback’s fate. 2007-08-29 00:37:06
Monday’s releases from the US markets, which showed that US Existing Home Sales went down by 0.2% in July, caused the greenback to be traded at a mixed trend against most of the major currencies. The weak housing figures is raising many doubts and concerns about the health of the world’s largest economy, this lower home values left Americans feeling less wealthy. Investors are waiting for the speech on “Housing and Monetary Policy” by Fed Chairman Ben Bernanke later this Friday, which will probably offer few hints about the future directions of the Fed’s monetary policy. As it seems at the moment, the housing market correction could take longer than expected and that could weigh on expenditure going forward.
It should be noted that the sub-prime market is just 4% of the overall real estate market, and its escalating effect is sometimes overwhelming. This ongoing housing problem makes it very difficult for Americans to tap home equity to finance the spending. A sl Read more:Uncertainty
Daily Forex Technical Analysis 2007-08-29 00:35:46
EUR/USD
The pair is now trading around 1.3600 which is the 50% Fibonacci level of the 1.3850/1.3360 move. If a breach up through that level will occur, we should see the pair initiating a further bullish move into the 1.3650 move. The daily chart is supporting the bullish notion, as the slow stochastic floats around 40, which indicates some more room to extend up.
GBP/USD
The cable is floating at the upper levels of the downward channel that is forming on the daily chart. Together with the slow stochastic and RSI which are both at the 50 level, a bearish signal is created with the next target price located 1.9960. The 4 hour chart is showing a slight oversold level which might sustain the move down on the short range.
USD/JPY
The 4 hour chart is showing two consecutive green bars, and the slow stochastic is showing two bullish crosses under the 20 level. The RSI has violently crossed the 20 level from above which strengthens the notion that on the short run a reverse move is imminent. Read more:Daily
, Forex
, Technical
, Analysis
US Consumer Confidence on Tap. 2007-08-28 04:44:05 Existing home sales released yesterday align with expectations at 5.75M and only slightly below the previous value of 5.76M, there was only a slight reaction from the market because the value was already anticipated by investors. Despite a low release of Existing Home Sales and with the difficulties in the US housing market, New Home Sales rose last week substantially from 846K to 870K. We are getting mixed signals from the housing market this month as the New Home Sales release surprised on the upside while there was a fall in the decreasing Housing Starts and Building Permits figures. Today the data for US ConsumerConfidence
will be released with an expected value of 104.8, which is below the previous value of 112.6, this indicates a degrading of consumer confidence which can influence the USD negatively.
Today’s FOMC Meeting minutes are critical as investors are trying to get hints on a possible interest rate cut by the Fed during the next meeting. Although the general conse
The US Economy is Under “significant market stress”, said Bernanke. 2007-09-21 02:52:11
Yesterday, the US market continued to witness a further deterioration.
The USD fell again, setting a fresh record low mainly against the EUR and the CAD. Growing concerns about the US economy and the possibility of further interest rate cuts by the Federal Reserve are the main reasons behind the US dollar’s continuous weakness. The USD is trading around the 1.4095 level against the EUR.
Yesterday, trader’s attention was focused primarily on the Fed Chairman’s Bernanke
Speech in front of the U.S Congress. Bernanke told Congress that the credit crisis has created a “significant market stress
”, but reassured that regulators would take steps to curb fallout due to the mortgage crisis.
Fed Chairman’s Speech came just two days after the Federal Reserve cut a key interest rate by 0.5% in order to prevent the weight of housing and credit problems from sinking the economy.
The Greenback weakness continues to dominate financial markets as last day’s headline
The Greenback Continues to Drop After the Rate Cut. 2007-09-20 03:25:49
The USD fell to an all-time low against the EUR Yesterday, however grazed back slightly due to data showing a decline in U.S. consumer prices. The Greenback also fell against the GPB taking it to 2.0173 before declining back to 2.0025.
Yesterday, data coming from the US showed some concerns about the country’s economic outlook data such as: CPI, Housing Starts index, and the Building Permits index; the consumer price index surprisingly decreased and pushed lower by 0.1% from the previous month and new home construction strike a 12-year low.
Home construction Index decreased by 2.6% last month to its lowest in more than 12 years, while building permit activity, a sign of future construction plans, also dropped to a low which has not been seen since mid-1995, Building permits fell 5.9% to an annual rate of 1.307 million.
As it seems at the moment the housing recession may deepen, causing more damage on an already slowing economy, after borrowing costs rose and lenders shut off a
EUR Breaks the 1.4000 - History in the Making. 2007-09-20 03:24:09 EUR/USD
The pair breached through the 1.4000 level and is now trading at all time high levels. The hourly studies are showing strong bullish momentum after the physiological barrier, and will probably continue to go up intraday. The daily charts are showing a bearish cross forming, which indicates that on the longer run a correction might be in place.
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FOMC Cut The Rate By 0.5% 2007-09-19 04:07:05 Despite yesterday’s sharp interest rate cut by the Fed the market anticipated the move. Stocks jumped on the news that the Federal Reserve decided to cut its key interest rate by a 0.5% to 4.75% and the dollar crashed to its historic lowest level against the EUR. The Fed slashed interest rates in order to protect the U.S. economy from sinking into a recession; sparked by the turmoil in the credit and housing markets. During the FOMC meeting, Fed chief Ben Bernanke stressed that the central bank will continue to act as needed to promise price stability and sustainable economic growth.
According to Fed’s chief Bernanke’s latest move, we can understand that he is more concerned by the sign’s of a possible recession which are caused by the tumble in the housing market, jobs market, and the significant reduction in retail sales.
Along with an Interest Rate decision, although somewhat overshadowed by it, other U.S economy news continued to flow yesterday prior to the
How Deep Will the Rate Cut Be? 2007-09-18 01:57:39 Today, September 18th is the day that forex traders have been waiting for since mid-August, as the Federal Open Market Committee will meet and announce their interest rate decision at 18:15 GMT. At this point, it is no longer a question of whether or not they will cut, but by how much. Currently, the Fed needs to decide on what kind of action it wants to take, an aggressive 0.50 % rate cut which may be considered as a stiff intervention and it could have far-reaching implications on the market or on the other hand, a 0.25 % rate cut which might be already embodied in the current market price. We have to mention that the third alternative which would be that the Fed will leave the rates unchanged however unlikely that may be. In reality, Chairman Bernanke will probably be more concerned about recession risks so taking this road will be highly risky for the conservative Chairman and his staff. Furthermore, this rate decision has been built up so much that anything less than a 0.25% rate
Markets Await the US Rate Release Tomorrow. 2007-09-17 01:15:45 The greenback lost some significant ground against the majors last week and it reached an all time low against the EUR. The negative dollar sentiment was mainly being driven by the recent weak jobs and housing figures which gave further indication last week that the US economy may be heading towards a recession. The Feds hesitancy to lower the interest rate has put the greenback on a slippery slope and the subprime and credit crisis have cast a shadow over the US economy. The most significant news that is expected from the US Today is the Empire State Business Conditions Index and it measures the general business conditions of manufacturers in the New York State. It is forecasted to release at 18.0, which is well below the previous figure of 25.0. If this figure comes inline or below expectations then it will reaffirm the fact that the US economy is slowing. With many investors already believing that the US economy is heading towards a recession it is likely that we may see this figure Read more:Markets
, Release
EUR/USD Breaks another All Time High - 1.4185 2007-09-28 06:01:01
The US dollar continued to trade on a slippery slope and it got even weaker since the Fed cut the interest rates by a larger-than-expected half percentage point last week. Regarding yesterday’s trading day it lost some ground against the Japanese Yen and reached a record low against the EUR on the basis of different assumptions whether the Federal Reserve will decide to cut borrowing costs for a second time this year, a fact which probably will make U.S. assets less “eye-catching” and which could place the US economy in even a more fragile state.
Yesterday the New Home Sales index was published and we noticed a significant drop from last July when 870,000 were reported, in relation to this month where sales rapidity was very sluggish and only 793,000 were reported, New-homes sales dropped in August to the lowest level in seven years. Total existing homes sales fell 4.3 percent in August to an annual rate of 5.5 million units from July. The new-homes sales report, co