US confidence, Chicago PMI to rise, CaseShiller to decline

With all of the major European economic reports already out, including a much better than expected German labour market report, which saw the Unemployment Rate drop to 6.7 percent - the lowest on record (seeTradingFloor's financial calendar), we can turn our attention to this afternoon's data from North America.

US house prices to decline further: The rather untimely CaseShiller 20 City Home Price Index is expected to show a decline of 0.5 percent month-on-month in November to take the annual change to -3.3 percent from -3.4 previously. While we see tentative signs of a (slow) recovery in the real estate sector of the US, there is still plenty of distress. Sales appear to have formed a bottom some time around mid-2011, but prices continue to decline with plenty of excess supply still on the market.

Chicago PMI to accelerate ahead of tomorrow's ISM Manufacturing? As usual we will get the Chicago PMI the day before the release of the national PMI report with consensus currently banking on an acceleration to 63 in January from 62.2 in the former. The December report was somewhat worse than the 62.2 headline number suggests as New Orders and Production both declined to 50.8 from 54.8 and 54.2, respectively. The Chicago PMI has been the best regional Fed survey by far in 2011 and has often overstated economic growth compared to the ISM Manufacturing Index.


US Consumer Confidence to rise again: The Conference Board's take on consumer confidence will be released today and is expected to confirm the development seen in recent months, and also in the January edition of the University of Michigan Consumer Confidence, which rose to 75 from 69.9 earlier. Both measures of confidence have recovered since the debt ceiling debacle in August, but remain far below levels normally associated with expansion. Indeed, the current level of 64.5 in the Conference Board's version is right around the average usually seen in recessions of 66.8 while the expansion average is 96.6.


Canadian economy accelerated in November: Consensus expects the Canadian economy to have risen by 0.2 percent month-on-month in November and 2.3 percent year-on-year. Last week's robust Leading Indicators report for December suggests that the Canadian economy will continue to grow at a reasonable pace in the coming quarters.

Earnings season continues; The earnings season continues today with several interesting companies reporting, among them: Exxon Mobile, United States Steel, Eli Lilly and Amazon. More on these in our Equity Update. (This week's overview on earnings releases can be found here).