U.S. existing home sales slump to 9-1/2-year low - Reuters News

WASHINGTON, June 22 (Reuters) - U.S. home sales dropped to their lowest level in more than 9-1/2 years in May, strengthening expectations for a sharp contraction in housing market activity in the second quarter following disruptions caused by the COVID-19 pandemic.

The National Association of Realtors said on Monday existing home sales fell 9.7% to a seasonally adjusted annual rate of 3.91 million units last month, the lowest level since October 2010. Last month's sales reflected closings of contracts signed in March and April. Economists polled by Reuters had forecast existing home sales would fall 3% to a rate of 4.12 million units in May.

Existing home sales, which make up about 90% of U.S. home sales, decreased 26.6% on a year-on-year basis in May, the largest annual decline since 1982.

May was probably the nadir for the existing housing market, with applications for home loans surging to an 11-year high in recent weeks amid record low mortgage rates. Data last week showed a sharp rebound in building permits in May.

Though businesses have reopened after being shuttered in mid-March to control the spread of COVID-19, nearly 20 million people are unemployed. In addition, the supply of homes available for sale is still tight, indicating a strong housing market recovery is unlikely.

Last month's slump in home sales, together with a modest rise in homebuilding in May, suggested a decline in residential investment this quarter after it grew at its fastest rate in more than seven years in the first quarter.

Home sales last month declined in all four U.S. regions.

There were 1.55 million previously owned homes on the market in May, down 18.8% from a year ago. The median existing house price rose 2.3% from a year ago to $284,600 in May. That was the smallest gain since February 2012.

At May's sales pace, it would take 4.8 months to exhaust the current inventory, up from 4.3 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

Euro zone consumer confidence rises to -14.7 in June - Reuters News

June 22 (Reuters) - Euro zone consumer confidence rose by 4.1 points in June from the May number, figures released on Monday showed.

The European Commission said a flash estimate showed euro zone consumer morale improved to -14.7 this month from -18.8 in May.

Economists polled by Reuters had expected a rise to -15.0.

In the European Union as a whole, consumer sentiment rose by 3.9 points to -15.6.

UK factories suffer worst quarter on record, CBI says - Reuters News

LONDON, June 22 (Reuters) - British industrial output recorded its biggest quarterly fall on record during the three months to June as COVID-19 heavily disrupted operations, and a further decline is likely in the months to come, a survey showed on Monday.

The Confederation of British Industry's headline industrial orders measure inched up to -58 in June from May's 38-year low of -62, but remained far below its pre-COVID level, while export orders fell by the most since records began in 1977 at -79.

The CBI's measure of industrial output over the past three months fell to its lowest since that measure started in July 1975, sinking to -57 from -54.

"The COVID-19 crisis has been hugely challenging for the manufacturing sector, and these figures reflect the tough circumstances faced by firms across the country," said Tom Crotty, group director of chemicals producer INEOS and chair of the CBI's manufacturing council.

Official data for April showed an historic 28.5% year-on-year fall in factory output.

Manufacturers are somewhat less pessimistic about the next three months, with output expectations rising to -30 from -49, despite the weaker demand from overseas, though this is well below the series' long-run average of +8.

The CBI said the steepest falls in production came in the automotive, mechanical engineering and metals sectors.

China leaves benchmark lending rate unchanged for second straight month - Reuters News

SHANGHAI, June 22 (Reuters) - China left its benchmark lending rate unchanged for the second straight month at its June fixing on Monday, matching market expectations, after the central bank kept borrowing costs on medium-term loans steady last week.

The one-year loan prime rate (LPR) CNYLPR1Y=CFXS remained at 3.85% from last month's fixing, while the five-year LPR CNYLPR5Y=CFXS was also steady at 4.65% from previously.

The move in the LPR affects the price lenders charge corporates and households for loans, and the five-year rate influences the pricing of mortgages.

A Reuters survey of traders and analysts conducted last week showed more than 70% of all participants expected China to keep the lending benchmark unchanged this month. Only 20% of all respondents predicted a marginal cut to one-year LPR. (Full Story)

The PBOC rolled over some maturing medium-term loans last week while keeping interest rates unchanged for the second straight month in a row.

The medium-term lending facility (MLF), one of the PBOC's main tools in managing longer-term liquidity in the banking system, serves as a guide for the new LPR. The interest rate on one-year MLF CNMLF1YRRP=PBOC stands at 2.95%.

The LPR is a lending reference rate set monthly by 18 banks. The PBOC revamped the mechanism to price LPR in August 2019, loosely pegging it to the MLF rate.