Lowered Q2 GDP tracking estimate by 0.1pp to 3.3% - Nomura

Analysts at Nomura noted the accompanying data from the US overnight.

Key Quotes:

"Existing home sales: Sales of previously-owned home declined 2.3% m-o-m in April slowing to an annualized pace of 5.57m, which is below expectations (Nomura: +1.6% to 5.80m, Consensus: -1.1% to 5.65m). The shortage of inventory levels likely lowered sales in April. Total housing inventory at end-April increased 7.2% m-o-m, but on a y-o-y basis, it was down 9.0%. The month’s supply indicator increased to 4.2 months from 3.8 months in March, but the uptick was due to slower sales in April. National Association of Realtors reported that "Homes in the lower- and mid-market price range are hard to find in most markets.” Looking ahead, although mortgage rates have stabilized somewhat, continued lean supply of previously owned homes may continue to exert upward pressure on home price growth.

Q2 GDP tracking update: Existing home sales in April were weaker than expected. Slower sales imply less brokers’ commissions, a component of residential investment, in Q2 than we have previously estimated. Therefore, we lowered our Q2 GDP tracking estimate by 0.1pp to 3.3%."