March 15th, 2011 7:44 PM by Lehel S.
Treasuries and mortgages opened a little better this morning with the key stock indexes lower.The world still focused on Japan's earthquakes and Tsunami. There are now three nuke plants in jeopardy of a meltdown and the Tokyo stock market was hammered hard last night, the largest loss in 2 yrs, down 6.0%. Crude oil continues its decline on continued belief demand will decline in Japan. There are no economic reports scheduled today, the calendar has data points mid-week however. This week is marked by tomorrow's FOMC meeting with the short policy statement out at 2:15 Tuesday afternoon.
This Week's Economic calendar:
8:30 am Empire State manufacturing index (17.0 frm 15.43 in Feb)
Feb import and export prices (N/A)
10:00 am NAHB housing market index (17 frm 16)
2:15 pm FOMC policy statement
7:00 am weekly MBA mortgage applications
8:30 am Feb housing starts and permits (starts -4.4%, permits +2.0%)
Feb PPI (+0.6%; core +0.2%)
Q4 current account balance (-$110.0B)
8:30 am weekly jobless claims -10K to 387K; con't claims 3.750 mil frm 3.771 mil)
Feb CPI (+0.4%; core +0.1%)
9:15 am Feb industrial production (+0.6%)
Feb capacity utilization (76.5% frm 76.1%)
10:00 am Feb leading economic indicators (+0.9%)
Mar Philadelphia Fed business index (28.0 frm 35.9 in Feb)
The DJIA opened down 65 at 9:30, the 10 yr note +10/32 at 3.36% -3 bp and holding below 3.40% since last Thursday. Technically the l0 yr note and mortgage markets are breaking some resistance levels.
Japan's woes are filtering around the world; crude lower on the belief demand in Japan will decline, emerging market equity markets rallying on re-building boom that will be huge in Japan. Most all attention now is on Japan's problems but the Mideast is still out there with continued protests in a number of states in the region while Qaddafi is waging war with protesters in the oil region and ports. In Europe a week ago comments from the ECB that it would be considering increasing interest rates next month to head off increasing inflation; now that looks less likely, England didn't increase rates and there are voices calling for the ECB to hold rates low to keep recovery moving forward and less concern over inflation increasing.
The rest of the day today for the bond and mortgage markets will be dependent on how equity markets trade; so far the key indexes are weaker but not much. Tomorrow's FOMC meeting should keep investors and traders from major moves. The Fed will keep interest rates at their present levels, talk about concerns over inflation, still worry over the strength of the US recovery with slow improvement in employment and no signs of recovery in the housing sector.