Amidst the nation’s banking system in crisis mode, markets are still preparing for a quarter point increase in tomorrow’s FOMC meeting.
However, markets are showing signs of stabilizing with equity markets rebounding by 1% and tech-heavy NASDAQ leading the way, the dollar index ticked up to 103.3 ending a downtrend, and yields on 2- year Treasuries rose to 4.18% and 10- year Treasuries rose to 3.59%.
That being said, after assisting Silicon Valley and Signature Bank, Janet Yellen stated that the US government is ready to step in and protect small regional banks if further failures continue.
US Home Sales report for February came in at 4.58 million (above the predicted 4.20 million) showing a decrease in interest rates and an increase in prices. As a result, buyers are looking for a steady decline in rates.
Also reflected in commodities, Grain markets and corn markets are stronger with China as a major importer.
With these factors currently in play, it will be interesting to see how its all affects rates. Please keep in mind that all trading carries risk.