April 16. Stocks rally, curve flattens
–China GDP about as expected at 7.4. Nikkei up 3% overnight as Japan apparently is expected to increase stimulus. UK employment at 6.9 is below BoE threshold, new high for the year in GBP. New high as well for crude oil, nearing 105/bbl. (Reuters) – Michigan officials and President Barack Obama’s Administration are discussing a plan to free up $100 million in federal money to aid Detroit’s retired city workers, the Detroit Free Press reported on Tuesday. So the largesse of the Federal Gov’t may keep the public pension plates spinning, as Chicago watches with interest… Yellen speaks today and will likely emphasize a dovish tilt.
–Nasdaq had an outside day and closed higher, suggesting an abatement of selling pressure (up another 20 this morning, above 3500).
–In the US it’s back to weakness in the belly as 5 yr yield rose 1.7 bps and 30 year bond yield fell 2.4. At just over 184, 5/30 spread is again nearing its low of 179, having been as high as 220 in early Feb. Green euro$ pack was again the weakest part of the curve, with a loss of nearly 4 bps, while golds were only down 0.75. Interesting that market action is pressing for a somewhat more aggressive Fed in terms of hiking, while the back end doesn’t seem to buy into the growth and inflation story.
–Gold was hammered yesterday as people liquidated inventories to pay taxes…as good a reason as any? Gold/silver ratio made a new 4 year high (thanks DS) at 66.4.
–News today includes Fed’s Beige Book. Yellen speaks 12:15 NY time to Economic Club of NY. Housing Starts expected 970k and Industrial Production +0.5.
