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Update: 2017-03-29 15:55:07 ET

Moving the Market
  • MBA Mortgage Index for the week ending 3/25: Actual -0.8% w/w, Prior -2.7%
    • MBA 30-Year Mortgage Rate: Actual 4.33%, Prior 4.46%
  • Chicago Fed President Evans (FOMC voter): Labor market is healthy, in a cyclical sense; business investment has been disappointing for some time; foreign economic prospects are looking better than they have for some time; supports one or two MORE rate hikes in 2017
  • February Pending Home Sales: Actual 5.5%, Briefing.com consensus 2.4%, Prior -2.8%
  • Crude Inventories for the week ending 3/25: Actual +0.87 mln barrels, Expected +1.4 mln barrels
  • $13 bln 2-year Floating Rate Note reopening: High discount margin 0.109%, bid-to-cover 3.43; indirect bid 40.4%
  • Boston Fed President Rosengren (non-FOMC voter) on Bloomberg TV now: Calls for total of four rate hikes in 2017; dissented in favor or hike last fall; talks about strong asset prices
  • $28 bln 7-year Treasury auction: High yield 2.215%, Bid-to-cover 2.56, Indirect bid 71.1%, Direct bid 8.4%
  • San Francisco Fed President Williams (non-FOMC voter): would not rule out more than three rate hikes in 2017 BUT emphasis is on gradual pace; U.S. economy is as close to Fed's dual mandate as ever; sees UE rate bottoming at 4.5% by year-end; winding down balance sheet will affect pace of rate hikes

3/29/2017
3:09:32 ET
10-Year:+9/32 2.38    GNMAs:     EUR/USD:1.0760    USD/JPY:111.03   

Treasuries Power Through Oil Rally to End Higher

  • U.S. Treasuries traded significantly higher today as headwinds from higher oil prices and equity markets failed to prevent government bond prices from stalking Monday's highs. The U.S. economic data flow continued to be slow but pending home sales rose at the fastest pace in six years during February (Actual 5.5% m/m, Briefing.com consensus 2.4%). There were three Fed speakers but two don't vote this year and Chicago Fed President Evans added little to his recent public messaging. The $28 bln 7-year Treasury auction was met with strong demand. The S&P 500 now trades up 0.18% to 2,362.8 and the U.S. Dollar Index is up 0.27% to 99.98
  • Yield Check:
    • 2-yr: -4 bps to 1.27%
    • 5-yr: -4 bps to 1.93% 
    • 10-yr: -4 bps to 2.38% 
    • 30-yr: -3 bps to 2.99%
  • News:
    • U.S. pending home sales rose 5.5% m/m in February (+2.6% y/y), handily beating the Briefing.com consensus for 2.4% growth and reversing January's 2.8% decline
      • Northeast (+3.4%), Midwest (+11.4%), South (+4.3%), West (+3.1%)
    • Chicago Fed President Charles Evans (FOMC voter) said today that business investment has been disappointing but that the prospects for the foreign economy are better than they have been for some time
      • He went on to say that he would support two or three total rate hikes in 2017 and that the labor market is healthy (cyclically but not structurally)
    • Boston Fed President Eric Rosengren spoke at length today on Bloomberg TV about financial instability risks, particularly from the commercial real estate market
      • He said that he would favor four total rate hikes in 2017 versus the median FOMC projection of just three
      • Rosengren does not vote again until 2019 and dissented in favor of a hike at last September's FOMC meeting 
    • San Francisco Fed President John Williams said today that he would not rule out more than three total rate hikes in 2017 but that the gradual pace is important. He sees the unemployment rate reaching a low of 4.5% by the end of 2017
    • $28 bln 7-year Treasury auction
      • High yield: 2.215%
      • Bid-to-cover: 2.56
      • Indirect bid: 71.1%
      • Direct bid: 8.4%
    • $13 bln 2-year Floating Rate Note reopening
      • High discount margin 0.109%
      • Bid-to-cover 3.43
      • Indirect bid 40.4%
  • Commodities:
    • WTI crude: +2.25% to $49.45/bbl.
    • Gold: -0.21% to $1,253/troy oz.
    • Copper: -0.021% to $2.675/lb.
  • Currencies:
    • EUR/USD: -0.47% to 1.0760
    • USD/JPY: -0.09% to 111.03
  • Data out Tomorrow:
    • Q4 GDP and GDP Deflator -- Third Estimate (08:30 ET)
    • Initial Jobless Claims for the week ending 3/25 and Continuing Jobless Claims for the week ending 3/18 (08:30 ET)
    • Natural Gas Inventories for the week ending 3/25 (10:30 ET)
  • Fed Speakers:
    • Cleveland Fed President Mester (non-FOMC voter) (09:45 ET)
    • Dallas Fed President Kaplan (FOMC voter) (11:00 ET)
    • San Francisco Fed President Williams (non-FOMC voter) (11:15 ET)

 
3/29/2017
2:20:50 ET
10-Year:+8/32 2.39    GNMAs:     EUR/USD:1.0756    USD/JPY:111.10   

Dollar Bounce Continues

  • The U.S. Dollar Index rose 0.32% to 100.03 today as the greenback gained against all of the majors. Continued stabilization in global equity markets drew capital back to the United States from investors in the eurozone and Japan seeking higher yields outside of their local economies. The U.K. government's invocation of Article 50 of the Lisbon Treaty began the formal process of departure from the European Union but the pound's losses were limited. The best performing currencies today were the commodity producers. The loonie rallied on the back of higher energy prices and the Aussie and kiwi jumped as well
  • EUR/USD: -0.51% to 1.0756
    • Germany's Import Price Index increased 0.7% m/m in February (7.4% y/y), exceeding expectations but slowing from January's 0.9% gain
    • France's Consumer Confidence Index remained at 100 in March, as expected
    • Italy's Consumer Confidence Index unexpectedly rose to 107.6 for March from 106.6 in February
      • Italy's Business Confidence Index also unexpectedly rose to 107.1 from 106.4
  • GBP/USD: -0.21% to 1.2421
    • In the U.K., BoE Mortgage Approvals fell to 68.32K in February from 69.11K in January
  • USD/CHF: +0.44% to 0.9971
    • Switzerland's Consumption Indicator rose to 1.50 in February from 1.44 in January
      • The ZEW Expectations Index jumped to 29.6 for March from 19.4 for February
  • USD/JPY: -0.03% to 111.10
    • In Japan, retail sales were up 0.1% y/y in February, missing estimates and slowing from January's 1.0% growth rate
  • USD/CNY: +0.15% to 6.890
  • USD/RUB: -0.73% to 56.63
  • USD/TRY: -0.15% to 3.652
  • USD/BRL: -0.69% to 3.119
    • Bank lending fell by 0.1% m/m in February after sliding by 1.0% in January
    • The governor of Brazil's central bank, Ilan Goldfajn said that deeper interest rate cuts are an option as Brazilian inflation subsides faster than expected
    • The central bank has reduced its policy rate at each of the last four meetings
  • USD/MXN: -1.43% to 18.76
    • Dollar/Mex hit its lowest level since early November today as investor fears about the Trump administration taking a very hard line against the U.S.'s southern neighbor have not yet materialized
  • USD/CAD: -0.34% to 1.3339
  • AUD/USD: +0.48% to 0.7670
  • NZD/USD: +0.27% to 0.7032

 
3/29/2017
1:32:19 ET
10-Year:+10/32 2.38    GNMAs:     EUR/USD:1.0762    USD/JPY:111.03   

Treasuries Hold Gains Despite Stability in Stocks

  • Treasuries continue to trade in positive territory this afternoon as trading activity remains rather subdued. The seven-year Treasury auction was met with strong demand and drew the third-highest ever indirect bid (71.1%). The S&P 500 is up just 0.05% at 2,359.7 and the U.S. Dollar Index is now higher by only 0.29% at 100.00. WTI crude is higher by 2.05% at $49.36/bbl. and gold is off by 0.22% at $1,252.9/troy oz.
  • San Francisco Fed President John Williams (non-FOMC voter) spoke this afternoon and said that while he tends to see a total of three rate hikes in 2017, that there are some upside risks to that forecast
  • Yield Check:
    • 2-yr: -4 bps to 1.27%
    • 5-yr: -4 bps to 1.93%
    • 10-yr: -4 bps to 2.38%
    • 30-yr: -4 bps to 2.99%
  • Morgan Stanley again notes the record divergence between U.S. "soft" economic data and "hard" economic data:

 
3/29/2017
1:04:52 ET
10-Year:+10/32 2.38    GNMAs:     EUR/USD:1.0752    USD/JPY:111.05   

Treasury Auction Results

  • $28 bln 7-year Treasury auction
    • Auction results:
      • High yield: 2.215%
      • Bid-to-cover: 2.56
      • Indirect bid: 71.1%
      • Direct bid: 8.4%
    • Average results of prior 12 auctions:
      • High yield: 1.769%
      • Bid-to-cover: 2.53
      • Indirect bid: 64.3%
      • Direct bid: 12.0%

 
3/29/2017
12:13:25 ET
10-Year:+8/32 2.39    GNMAs:     EUR/USD:1.0756    USD/JPY:111.11   

Traders Look Ahead to 7-Year Note Auction

  • U.S. government notes and bonds are giving back some of their gains at the moment and the yield curve is steepening from its flatter posture earlier this morning. The S&P 500 is four points off of its high and now unchanged at 2,358.5 while the U.S. Dollar Index is adding 0.35% at 100.06. WTI crude is up 1.88% to $49.28/bbl. after EIA crude oil inventory data and gold is down 0.29% to $1,251.9/troy oz.
  • Boston Fed President Eric Rosengren said today that he favors a total of four rate hikes in 2017. Rosengren does not vote again until 2019 and he dissented at the September 2016 FOMC meeting in favor of a hike
    • Rosengren said that there are signs that a "potentially overheating economy" is on the horizon 
  • There is now a 53% chance for a rate hike by the end of the June 13-14 FOMC meeting and a 55% probability of three or more TOTAL rate hikes in 2017, according to the CME website
  • Yield Check:
    • 2-yr: -4 bps to 1.26%
    • 5-yr: -4 bps to 1.94%
    • 10-yr: -3 bps to 2.39%
    • 30-yr: -2 bps to 3.00%

 
3/29/2017
11:45:37 ET
10-Year:+8/32 2.39    GNMAs:     EUR/USD:1.0751    USD/JPY:111.08   

Treasury Auction Preview

  • $28 bln 7-year Treasury auction (results at 13:00 ET)
    • Prior auction results:
      • High yield: 2.197%
      • Bid-to-cover: 2.49
      • Indirect bid: 63.4%
      • Direct bid: 11.4%
    • Average results of prior 12 auctions:
      • High yield: 1.769%
      • Bid-to-cover: 2.53
      • Indirect bid: 64.3%
      • Direct bid: 12.0%

 
3/29/2017
11:19:15 ET
10-Year:+11/32 2.380%    GNMAs:     EUR/USD:1.0756    USD/JPY:110.90   
  • The Dollar Index is attempting to regain the 100 level. This marks the best level for the DXY in a week. The move has more to do with a bounce back after finding support at the 99 area but it is being supported by a boost in today's strong Pending Home Sales report. Earlier today Chicago Fed President Charles Evans stated that he saw another one to two rate hikes in 2017. This is being viewed as a slightly dovish turn as he previously was looking for another two rate hikes, and a possible third, this year. Mr. Evans is a current voter.
  • The euro is down on the day as it gives up some recent gains. The single currency rallied to test its 200-sma at the start of the week but failed to hold that ground. It is now seeing some profit taking which is being spurred further by the long awaited invoking of Article 50 by the U.K.. Of interest, German Import Prices rose 7.4% y/y which was the highest level since April of 2011. Energy prices and a weaker euro certainly helped the surge but it will be interesting to see if this impacts arguments at the ECB.
  • The pound is lower as the U.K. officially invoked Article 50. That will start the clock ticking on what is expected to be a two year process. There are plenty of loopholes for the two sides to extend talks but the skis are over the ledge and now markets will closely watch the exit unfold with great interest. Sterling is showing some signs of holding the 50, 100-sma convergence area at 1.2425-1.2432. This will be a key level to watch moving forward.
  • The rally in the yen is slowly abating as equities see a bounce. Yen is sliding back to test the 111 level. Retail Sales this morning fell short of expectations (+0.1% vs +0.7% expectations) as the economy continues to struggle to find growth.
  • The Chinese yuan remains in a tight range as it holds steady at 6.86 on a quiet day. The range continues to tighten following some volatility earlier int he year. This is a pattern that helps ease some global tension.

 
3/29/2017
11:12:12 ET
10-Year:+10/32 2.38    GNMAs:     EUR/USD:1.0757    USD/JPY:110.99   

Auctions on Deck

  • Treasuries are adding to their earlier gains this morning despite better-than-expected U.S. pending home sales growth in February (the best since 2010) and a firmer stock market. The S&P 500 is higher by 0.11% at 2,361.2 and the U.S. Dollar Index is up 0.39% to 100.10. The Treasury bears appear to be struggling to take back control ahead of today's $28 bln seven-year Treasury auction and the $13 bln auction of two-year floating rate notes at 11:30 ET. WTI crude is even marching higher by 1.45% to $49.07/bbl. so all of this strength in the Treasury complex is all the more impressive. It is notable that the yield curve has flattened a lot since this March rally began, so while yields at the 5-, 10-, and 30-year maturities are down by 20-25 basis points, the 2-year yield is lower by just 13 basis points. The 1-year note yield only three basis points below its post-recession high. Some Fed officials have noted in recent weeks that maintaining the Fed's balance sheet at $4.5 tln is reducing the term premium and flattening the yield curve
  • Yield Check:
    • 2-yr: -2 bps to 1.28%
    • 5-yr: -4 bps to 1.93%
    • 10-yr: -4 bps to 2.38%
    • 30-yr: -3 bps to 2.99%

 
3/29/2017
10:17:20 ET
10-Year:+7/32 2.39    GNMAs:     EUR/USD:1.0750    USD/JPY:110.93   

Treasuries Hold Gains as Dollar Jumps

  • U.S. Treasuries are holding strong today despite better-than-expected pending home sales growth in February. The S&P 500 is now down 0.04% at 2,357.7 and the U.S. Dollar Index is up 0.38% to 100.09. Gold is losing 0.42% to $1,250.3/troy oz. and WTI crude is up 0.43% at $48.58/bbl.
  • U.S. pending home sales rose 5.5% m/m in February (+2.6% y/y), handily beating the Briefing.com consensus for 2.4% growth and reversing January's 2.8% decline
    • Northeast (+3.4%), Midwest (+11.4%), South (+4.3%), West (+3.1%)
  • Chicago Fed President Charles Evans spoke this morning in Frankfurt, Germany. Here is the full text of his remarks. He said very little different from what he has said since the March 15 FOMC rate decision
  • The Wall Street Journal has a great piece today on the development of China's money markets during this century and the current state of those markets. Key highlights:
    • The money market usually consists of small banks with large deposit bases borrowing from one of the "Big Four" like Agricultural Bank of China or ICBC
    • The People's Bank of China has tightened monetary policy twice since early February using its seven-day repo rate (up to 2.45% from 2.25%)
    • Chinese banks have become much more dependent on wholesale funding than on deposits in recent years
    • Wealth Management Products (WMPs) are now $3.8 tln or 35% of GDP. WMPs are opaque and the money markets can be accessed by the managers of the products to repay investors
    • Here is George Magnus on the Chinese financial system
  • Yield Check:
    • 2-yr: -3 bps to 1.28%
    • 5-yr: -3 bps to 1.94%
    • 10-yr: -3 bps to 2.39%
    • 30-yr: -2 bps to 3.00%

 
3/29/2017
9:15:16 ET
10-Year:+7/32 2.39    GNMAs:     EUR/USD:1.0755    USD/JPY:110.94   

Euro Drops on ECB Reports

  • The U.S. Treasury complex is trading in positive territory this morning ahead of February's Pending Home Sales report and two auctions. The bigger auction is $28 bln of seven-year Treasuries but there is also a $13 bln two-year floating rate note auction. The S&P 500 is set to open down 0.15% at 2,355 and WTI crude is adding 0.25% at $48.49/bbl. The U.S. Dollar Index is up 0.35% at 100.06 and gold is down 0.20% to $1,253.1/troy oz.
  • Treasury yields (which move inversely to prices) ran into significant support on Monday and the 35-point bounce in the S&P 500 since Monday's futures-implied low has helped to sap demand for Treasuries, pushing yields higher. Additional tests of yield support in the 10-year (2.31-2.33%) and the 30-year (~2.98%) are to be approached by short-sellers only cautiously. The big news in central banks this morning was a report from Reuters that cited anonymous ECB sources who pushed back against the recent hawkish turn in market expectations for ECB policy. The euro fell as low as $1.0740 this morning but now trades down just 0.55% to $1.0752. We continue to see the euro as a better bet than the dollar in the medium term, but certain technical headwinds have materialized over the past three days. Particularly, the euro broke through and then retreated from its 200-day moving average at $1.0884 and its downtrend from the May 3, 2016 high. So while we want to bullish on fundamentals and the inability of French presidential election worries to force EUR/USD to new lows earlier this year, we also want to be careful
  • Yield Check:
    • 2-yr: -3 bps to 1.28%
    • 5-yr: -3 bps to 1.94%
    • 10-yr: -3 bps to 2.39%
    • 30-yr: -2 bps to 3.00%
  • EUR/USD (Daily):

  • 10-Year Treasury Yield (Daily):

  • 30-Year Treasury Yield (Daily):

 
3/29/2017
8:38:57 ET
10-Year:+6/32 2.40    GNMAs:     EUR/USD:1.0760    USD/JPY:110.89   

European Yields Fall Sharply

  • European government bond prices are higher across the board this morning as U.K. Prime Minister Theresa May has invoked Article 50 of the Lisbon Treaty to begin the formal process of Brexit. The upcoming negotiations about the U.K.'s trade relationship with the European Union will be closely watched because London's status as a global financial center is in jeopardy. Meanwhile, traders of eurozone sovereign debt are focusing today on a report from Reuters that sources inside the ECB said that traders took a far too hawkish message from the March ECB Governing Council meeting. At the meeting's press conference, ECB President Draghi said that there was less urgency at the ECB to fight off deflation/disinflation and traders used that opportunity to ditch eurozone government bonds. Expectations for a hike in the ECB's deposit rate by the end of 2017 have now fallen back below 50% as anonymous policymakers push back on the market's reaction to Draghi's comments. The economic data today from the eurozone showed German import prices rising faster than expected in February and economic sentiment remaining strong in the wider single currency bloc. Interest rates ultimately follow the real economy because central banks make monetary policy for the real economy, so despite today's report from Reuters, the big question is whether the current resurgence in headline inflation and strong business sentiment will result in stronger growth and core inflation. ECB policymakers have so far been reluctant to become optimistic about inflation returning quickly to the ECB's target of at or below 2%. They see the recent surge as a statistical artifact of the February 2016 bottom in oil prices, which should flatter February 2017 headline inflation figures
  • Reuters reported this morning that ECB policymakers are wary of announcing a policy-message shift in April because of the potential for surging yields
  • European Economic Data:
    • Germany's Import Price Index increased 0.7% m/m in February (7.4% y/y), exceeding expectations but slowing from January's 0.9% gain
    • France's Consumer Confidence Index remained at 100 in March, as expected
    • Italy's Consumer Confidence Index unexpectedly rose to 107.6 for March from 106.6 in February
      • Italy's Business Confidence Index also unexpectedly rose to 107.1 from 106.4
    • Hungary's unemployment rate rose to 4.4% in February from 4.3% in March
    • In the U.K., BoE Mortgage Approvals fell to 68.32K in February from 69.11K in January 
    • Switzerland's Consumption Indicator rose to 1.50 in February from 1.44 in January
      • The ZEW Expectations Index jumped to 29.6 for March from 19.4 for February
  • Yield Check:
    • France, 10-yr OAT: - 4 bps to 0.93%
    • Germany, 10-yr bund: -5 bps to 0.34% 
    • Greece, 10-yr note: -33 bps to 6.39% 
    • Italy, 10-yr BTP: -4 bps to 2.11%
    • Portugal, 10-yr PGB: -4 bps to 3.65%
    • Spain, 10-yr ODE: -3 bps to 1.63%
    • U.K., 10-yr gilt: -3 bps to 1.16%

 
3/29/2017
7:40:45 ET
10-Year:+4/32 2.41    GNMAs:     EUR/USD:1.0782    USD/JPY:110.91   

U.K. Government Invokes Article 50

  • U.S. Treasuries are trading modestly higher across the board this morning as the U.K. government invokes Article 50 to begin the formal process to leave the European Union. The British pound is adding 0.13% at $1.2463 and the 10-year gilt yield is down two basis points to 1.17%. In international economic data, Japanese retails sales missed expectations in February but German import prices beat estimates. Fed Governor Jerome Powell said on Tuesday that there remains significant uncertainty on U.S. fiscal policy and so the Fed will just have to "wait and see" what happens. The big U.S. economic data point today will be February Pending Home Sales. The S&P 500 is set to open down 0.22% to 2,354 and the U.S. Dollar Index is up 0.12% to 99.83. WTI crude is adding 0.54% at $48.63/bbl. and gold is losing 0.23% to $1,252.7/troy oz.
  • Yield Check:
    • 2-yr: -2 bps to 1.29%
    • 5-yr: -2 bps to 1.96%
    • 10-yr: -2 bps to 2.41%
    • 30-yr: -2 bps to 3.01%
  • International News:
    • In Japan, retail sales were up 0.1% y/y in February, missing estimates and slowing from January's 1.0% growth rate
    • Korea's Manufacturing BSI Index ticked down to 78 for April from 79 in March
    • Switzerland's Consumption Indicator rose to 1.50 in February from 1.44 in January
      • The ZEW Expectations Index jumped to 29.6 for March from 19.4 for February
    • Germany's Import Price Index increased 0.7% m/m in February (7.4% y/y), exceeding expectations but slowing from January's 0.9% gain
    • France's Consumer Confidence Index remained at 100 in March, as expected
    • Italy's Consumer Confidence Index unexpectedly rose to 107.6 for March from 106.6 in February
      • Italy's Business Confidence Index also unexpectedly rose to 107.1 from 106.4
    • In the U.K., BoE Mortgage Approvals fell to 68.32K in February from 69.11K in January
  • Data out Today:
    • MBA Mortgage Index for the week ending 3/25: Actual -0.8% w/w, Prior -2.7%
      • MBA 30-Year Mortgage Rate: Actual 4.33%, Prior 4.46%
    • February Pending Home Sales (10:00 ET)
    • Crude Inventories for the week ending 3/25 (10:30 ET)
  • Treasury Auctions:
    • $13 bln 2-year Floating Rate Note reopening (results at 11:30 ET)
    • $28 bln 7-year Treasury auction (results at 13:00 ET)
  • Fed Speakers:
    • Chicago Fed President Evans (FOMC voter) (09:20 ET)
    • Boston Fed President Rosengren (non-FOMC voter) (11:30 ET)
    • San Francisco Fed President Williams (non-FOMC voter) (13:15 ET)

 
3/28/2017
3:20:31 ET
10-Year:-10/32 2.42    GNMAs:     EUR/USD:1.0812    USD/JPY:111.11   

Treasuries Slide on Surge in Consumer Confidence

  • U.S. Treasuries fell to moderate losses today as the U.S. dollar and global equities rallied sharply on the CB's Consumer Confidence report. Consumer confidence jumped to a 16-year high during March and various metrics of consumers' confidence in the job market and future income also showed a lot of strength. So-called "soft" U.S. economic data like sentiment surveys have improved sharply since the November 8 election while the "hard" data has improved only modestly, if at all. Fed Vice Chair Fischer gave an interview on CNBC this afternoon but he tried to say as little as possible although he sees two more rate hikes in 2017 as appropriate. The five-year Treasury auction was met with tepid demand and tailed by half of a basis point. The advance estimate for the U.S. balance of trade in goods was better than expected and caused an upward revision to the Q1 GDP growth estimate at Barclays (1.6% from 1.2%). The S&P 500 is now higher by 0.78% at 2,359.8 and the U.S. Dollar Index is adding 0.56% to 99.73
  • Yield Check:
    • 2-yr: +3 bps to 1.30%
    • 5-yr: +4 bps to 1.96% 
    • 10-yr: +4 bps to 2.42%
    • 30-yr: +3 bps to 3.02%
  • News:
    • The Conference Board's Consumer Confidence Index jumped to 125.6 for March from 116.1 in February. The Briefing.com consensus was for a decline to 113.3
      • The Present Situation Index rose to 143.1 from 134.4 
      • Expectations jumped to 113.8 from 103.9
    • U.S. wholesale inventories grew by 0.4% m/m in February, according to the advance estimate. That exceeded the Briefing.com consensus of 0.2% and reversed the decline of 0.2% in January. That drop was revised down from -0.1%
    • The advance estimate for the U.S.'s trade balance in goods was -$64.8 bln in February, better than the Briefing.com consensus of -$66.1 bln. January's deficit was revised down to $68.8 bln from $69.2 bln
    • The S&P/Case-Shiller 20-city index was up 5.7% y/y in January, beating December's growth of 5.5% and the Briefing.com consensus of 5.6%
      • Seattle (11.3%), Portland (9.7%), and Denver (9.2%) led the gains
      • New York (3.2%), Washington (3.9%), and Cleveland (3.9%)
    • Fed Vice Chair Stanley Fischer (FOMC voter) said today that he thinks two more rate hikes in 2017 would be appropriate
      • He went on to say that investment spending is very low and that he is worried about an end to the post-WWII consensus on free trade
    • Dallas Fed President Kaplan (FOMC voter) said that rate increases should be done patiently and gradually
    • Kansas City Fed President Esther George (non-FOMC voter) said today that she doesn't want the Fed to raise rates quickly and shock the economy
    • $34 bln 5-year Treasury auction
      • High yield: 1.950% (0.5-basis point tail)
      • Bid-to-cover: 2.37
      • Indirect bid: 68.9%
      • Direct bid: 4.8%
  • Commodities:
    • WTI crude: +1.22% to $48.31/bbl.
    • Gold: -0.53% to $1,249.1/troy oz.
    • Copper: +1.29% to $2.666/lb.
  • Currencies:
    • EUR/USD: -0.49% to 1.0812
    • USD/JPY: +0.41% to 111.11
  • Data out Wednesday:
    • MBA Mortgage Index for the week ending 3/25 (07:00 ET)
    • February Pending Home Sales (10:00 ET)
    • Crude Inventories for the week ending 3/25 (10:30 ET)
  • Treasury Auctions:
    • $13 bln 2-year Floating Rate Note reopening (results at 11:30 ET)
    • $28 bln 7-year Treasury auction (results at 13:00 ET)
  • Fed Speakers:
    • Chicago Fed President Evans (FOMC voter) (09:20 ET)
    • Boston Fed President Rosengren (non-FOMC voter) (11:30 ET)
    • San Francisco Fed President Williams (non-FOMC voter) (13:15 ET)