NY Fed outright purchase: Fed is purchasing between $3.0 B and $3.75 B in notes NY Fed outright purchase: Fed is purchasing between $3.0 B and $3.75 B in notes ranging from February 28, 2019 through May 15, 2020. The buyback is supportive of the rebound in Treasuries, though yields have edged off their lows as stocks recover.
Treasury Action: yields are searching for fresh equilibrium Treasury Action: yields are searching for fresh equilibrium after the better than expected rise in Apr new home sales followed on the heels of the jobless claim drop earlier. Home sales in Mar were also revised sharply higher as well and stocks are consolidating above opening lows following their early downdraft. The T-note yield rebounded above 2.01% again after sliding under 2.0% after stalling just ahead of 2.07% Mar highs.
Another Gross Tweet from PIMCO: Another Gross Tweet from PIMCO: "Why can banks earn 25 bps with overnight repo while all others earn nothing? 3 billion dollar subside from #Fed!"
FX Action: USD-CAD again found buyers into 1.0325 FX Action: USD-CAD again found buyers into 1.0325, where standing bids have been noted. The pairing seems content to play the 1.0325-60 range for now, though weaker oil prices, and equities could shift the bias to the upside near term.
Market opens sharply lower Stock futures suggested a sharply lower open and the broader market opened accordingly. The weakness is being attributed to poor economic data out of China and follow through on comments yesterday from Fed Chairman Bernanke about the timing of an exit from its quantitative easing program. The averages are currently in a holding pattern ahead of some more housing data, due out shortly. The Dow is down 111 points, the Nasdaq is down 34 points and the S&P is down 17 points.
U.S. New Homes Sales Preview U.S. New Homes Sales Preview: April new home sales are expcted to increase 3.1% to a 430k (median 426k) pace for the month following the 417k pace set in March. The existing home sales report was slightly weaker than expected to 4.970 M for April versus a 4.990 M median but it appears that housing indicators are continuing their pace of gradual improvement.