Commercial real estate declines
U.S. commercial real estate activity fell 0.7% in Q1, the 3rd straight quarterly decline, and cooling likely will continue this year, the Nat'l Association of Realtors said. NAR's index, a gauge of future commercial real estate activity, is compiled from 13 variables, including industrial output, job growth, business sales, and REIT prices and returns. It fell 0.8% vs. a year earlier, the first decline in 5 years. Private nonresidential investment had held up until recently, partially offsetting the sharp drop in home building and related jobs.
Architects also see tough times. An architectural billing index rose to 45.5 in April from March's record low of 39.7, but remained below the neutral 50 level, according to the American Institute of Architects. Mortgage demand near '08 low
The mortgage applications index fell 7.8% to 621.6 in the week ended May 16, the 2nd-lowest level of the year, the Mortgage Bankers Assoc. said. It hit 567 in late April. Refinancing activity fell 8.7% as mortgage rates rose. Loan requests for home purchases slid 6.9%.
German business morale rises
The Ifo institute's confidence index unexpectedly rose to 103.5 in May from 102.4 in April, suggesting the the economy can build on its strong showing in Q1 and reinforcing the view the European Central Bank will hold rates steady for now. The euro jumped to a 1-month high vs. the dollar, gaining over a penny.
Spain's economy grew 0.3% in Q1 -- the slowest pace in almost 15 years -- after Q4's 0.8% gain. It was the first time Spanish growth failed to outpace the overall euro zone rate since '97. Bank of England policymakers voted 8-1 to keep rates unchanged at their May 7-8 meeting, with only arch dove David Blanchflower dissenting from the view that the focus needed to be on inflation rather than growth. Canada's annual inflation rate skipped above forecasts to 1.7% in April on double-digit gasoline price hikes, casting doubt on the timing of the Bank of Canada's next rate cut. COMING UP THURSDAY
New jobless claims for the week ended May 17, 8:30 a.m. EDT (forecast: 372,000).
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