Daily Market Commentary

Commentary prepared by Tom Slefinger, Senior Director of Trading,
Balance Sheet Solutions, LLC, Member FINRA/SIPC
Wednesday, February 22, 2012 at 10:45 a.m. CST
 
Market Indications
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Other Market Indicators
2s/5s Tsy Spread
0.60
+0.01
DJIA-30
12965.69
+15.82
Dollar Idx
79.21
+0.10
2s/10s Tsy Spread
1.75
+0.02
NASDAQ
2948.57
-3.21
CRB Idx
322.45
+5.06
2s/30s Tsy Spread
2.90
+0.02
S&P-500
1362.21
+0.98

Today's Market Commentary
Treasuries sold off on Tuesday led by the belly of the curve with five-, 10- and 30-year yields rising four, five and four basis points from Friday's close, respectively. Economic data were scant; the Chicago Fed National Activity Index surprised positively, if marginally.  

In overnight activity, Asian markets were up  with the Nikkei rising 0.96%. Of note Chinese PMI came in at 49.7 in February compared with 48.8 the previous month. This, however, signaled a fourth straight month of contraction in manufacturing.

Europe is sharply lower on Eurozone PMI data and skepticism over the Greek deal. Euro area industrial orders jumped 1.9% month-over-month in December beating expectations. This comes after a 1.1% decline the previous month. Eurozone composite PMI, which measures manufacturing and services, fell to 49.7 in February from 50.4 the previous month. German PMI declined to 50.1 in February, down from 51 the previous month. Finally out of Europe, Fitch cut Greece's long-term ratings to C from CCC. The ratings agency said Greece is highly likely to default in the near-term. This comes after talks that default risk is not off the table despite Athens securing its second bailout yesterday.   

Back in the U.S., equity futures are moderately lower. In fixed income land, Treasuries are flat with the 10-year Treasury yielding 2.06%. The front end is unchanged with twos trading at 0.30%.

Wednesday

10:00 AM ET: Existing Home Sales for January will be released by the National Association of Realtors (NAR). The consensus is for sales of 4.69 million on a seasonally adjusted, annual rate basis.
 

February 21 - February 24: The Week Ahead

Sources: Bloomberg
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Future Fed Expectations

Sources: Bloomberg
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Select Probabilities based on the Futures
Probability of No Change (0-0.25%) Fed Funds on January 25, 2011
100%
Probability of No Change (0-0.25%) Fed Funds on March 13, 2012
100%

 

**All quoted rates are indications and are subject to change without notice.

* Balance Sheet Solutions, LLC is a member of the FINRA/SIPC.

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