THURSDAY TREMBLINGS US markets opened the way they ended yesterday; the stock market opening lower and interest rates slightly higher. Markets were roiled yesterday on Yellen’s remark that short term interest rates may begin to increase sooner than what market investors and traders were expecting. She may have stumbled when she said that once the Fed completed tapering it may begin raising interest rates within six months of ending monthly buying. Although it is well off the radar now; Ukraine is pulling its troops and people from Crimea. The withdrawal implies Ukraine is conceding Russia will annex the country. Russia appears at the moment it has “won” its goal. The runoff however is not over, although the US and Europe don’t have much leverage there are a number of other issues that may become testy. Feb existing home sales down 0.4% to 460K, right on forecasts; yr/yr -1.7%, 189K median sales price up 9.1% yr/yr (mostly on higher price home sales), 5.5 month supply based on current sales, NAR saying tight credit and affordability are dragging down sales. Feb leading economic indicators +0.5%, better than +0.3% estimates were calling for. a sign the world’s largest economy will strengthen after a weather-induced slowdown in the first quarter. After starting weaker, the data points at 10:00 turned the indexes higher but there was little change in the bond and mortgage markets. The driver for MBS markets, the 10 yr, is still holding a key chart point at 2.80% and continues in its 20 bp rate trading range since last January. A break above 2.80% will drive rates higher. US markets are momentarily shaken after Yellen’s comments yesterday. Expect continued volatility today and tomorrow.
Posted on: Thu, 20 Mar 2014 18:02:42 +0000
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