OptionEye Macro Outlook Mar. 17th
Well the Fed surprised by being a little more dovish than was expected. They backed off the forecast of 4 rate hikes this year and scaled back to 2. That was not expected. At the same time they upgraded some growth forecasts.....go figure. Anyway, the 10 year yield which was at 1.99% before the Fed announcement, quickly backed off 14 basis points to 1.85% and currently trades at 1.86%.
The stocks liked the verbage as well and immediately tacked on some gains. But, the gains would have been greater had this happened this time last year as the market is starting to figure out that if the Fed thinks the economy can't take 4 rate hikes - it's a bad thing. This morning stocks are giving back yesterday's move higher with the S&P down over 8 points and the Dow future down 59. After thinking about it overnight the market is starting to come around.
Corn is trading a bit higher up 2 cents, beans are up as well by about 5 cents and wheat up 4 cents. Overnight the dollar is down big after Yellen's testimony and giving a boost to the commodity markets. This morning the dollar is down 1.03 at 94.85 Watch this space as the Bank of Japan and the ECB have moved to negative rates to make their currencies weaker against the US dollar. Yesterday's Fed 'non-move' will wipe out a lot of what these central banks have done and I think it will cause bigger problems globally down the road.
Oil is up .61 cents to $39.07. Gold is up as well to $1268.90 up $6.36.
Today we get the Current Account Balance, Initial Jobless Claims, Continuing Claims, the Philadelphia Fed Business Outlook, the Bloomberg Consumer Comfort Index and the Leading Index.