Action Economics: Treasuries showed a muted reaction to a plunge in new home sales in August. The 10-year yield edged slightly lower below 4.62%, but without much bullish conviction.
U.S. new home sales fell 8.3% to a 795k pace in August from a revised 867k in July (870k previously). Weakness was seen in the South and West regions, the hardest hit by the housing contraction. The month's supply of homes rose to 8.2 from 7.6 previously (revised from 7.5). The number of homes on the market dipped to 529k from a revised 537k (533k previously). The median home price fell to $225,700 from $246,200 (revised from $239,500), and is down 7.5% year-over-year. The housing data remain weak, but the decline in home sales was not quite the double digit pace rumored and that may leave the markets little changed.