Canadian new home construction rose in May to remain at historically elevated levels as developers seek to take advantage of robust demand. Home starts totaled 275,916 units on an annualized basis last month, after 267,449 starts in April. The May number was in line with forecasts in a Bloomberg survey of economists. Monthly new starts have averaged 290,000 so far this year, up from 219,000 in 2020. That’s another sign the country’s housing market is benefiting from historically low interest rates and strong demand that has driven home prices to record highs in many markets.
The US retail sales report for May indicates that the stimulus-fueled bounce earlier this year is dissipating. Retail sales fell 1.3% m/m, disappointing expectations of a more muted 0.8% m/m decline. Similarly, control group sales contracted by 0.7% m/m versus an anticipated 0.5% m/m decrease. Despite the monthly decline, the report’s details suggest that spending remains robust. For one, the prior month’s headline retail sales and control group measures were both revised up. Moreover, at $620 billion in May, the level of retail sales is significantly above what is implied by the pre-pandemic trend. Going forward, there will be a shift in consumer spending towards activities and sectors most impacted by pandemic restrictions at the expense of COVID-19 winners. The May retail sales report shows food services & drinking places and clothing stores – the two sectors most severely affected by the pandemic – experienced the strongest sales in May, with both exceeding their pre-COVID sales level.
Oracle: The technology company's shares were down 4.7% premarket after it handily beat expectations for earnings and sales, but executives said they planned to spend more on developing Oracle's cloud business.
Consumer prices in the U.K. rose 2.1% from a year earlier in May, the highest since July 2019. The faster-than-forecast pace increased speculation about the timing of Bank of England tightening. Following the high U.S. reading last week, there remains speculation on how transitory any inflation event will be. One of the main drivers of the headline number is energy prices, and with oil trading above $72 a barrel this morning, there seems to be little chance of relief on that front.
China to release metal reserves in effort to tame commodities rally. The state stockpiling body said it plans to release copper, aluminum, zinc and other national reserves in batches in the near future to ensure the supply and price stability of bulk commodities. Speculation on such a move pushed copper prices to an eight-week low on Tuesday.