Mar 16. FOMC today

 Light volume Monday in front of today’s FOMC.  Curve steepened somewhat. Though Moody’s warned of a possible downgrade of US debt, and TIC data revealed that China and Japan reduced holdings of treasuries in January, yields were little changed. 

–FOMC meeting today.  The last statement was generally supportive of growth going forward; I think it’s somewhat unlikely that there will be a significant upgrade in tone.  However, it will be noted that MBS purchases are drawing to a close this month.

–Copper and oil again traded lower yesterday, further diverging from US stocks, which were lower early but rebounded to close with only minor losses.  Copper, crude, S&P’s and Canada have all had similar charts, making highs in early Jan, then lows in early Feb followed by strong rebounds.  Copper and oil did not quite surpass Jan highs and are now faltering.  Canada did make a new high but closed lower yesterday, as did stocks.  It remains to be seen whether basic commodities are leading indicators of a stock pullback.

–According to wikipedia (mark to market accounting/FASB 157), it was exactly one year ago that FASB proposed easing rules: “On March 16, 2009, FASB proposed allowing companies to use more leeway in valuing their assets under “mark-to-market” accounting, a move that could ease balance-sheet pressures many companies say they are feeling during the economic crisis.”

–Housing Starts today expected .565M vs .591.

Posted on March 15, 2010 at 7:56 pm by alexmanzara · Permalink
In: Eurodollar Options

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