Ahead of the US Federal Reserve statement this evening, there were some reasonably encouraging signs from the country's housing market.
US housing starts fell 5.9% to 575,000 in February, but this slightly better than expected. Teunis Brosens at ING Bank said:
Most of this drop came from the volatile multifamily component. The more important single family component fell just 0.6%. Given adverse weather conditions in parts of the country, it could have been worse. So homebuilders are probably cautiously anticipating strengthening demand, supported by the broadened and extended homebuyer tax credit. Given that deals have to be signed by 30 April to qualify, any tax credit-induced pickup in demand for new homes should come soon now.
So Wall Street has edged higher at the open, and the FTSE 100 remains in positive territory, up 17.08 points at 5610.93. Economists expect the Fed to repeat its pledge to keep interest rates low, but the statement will be scoured for any hints of a change in attitude.
