Outlook:The data today consists chiefly of new homes sales, out at 10 am EST this morning. It could favor a risk-positive stance. Sales are expected up 1.3% in Feb to a 325,000 annual pace, the fastest since Dec 2010, according to the Bloomberg survey. “Affordability is increasing as hiring picks up, incomes grow, homes prices steady and mortgage rates hold near record lows. At the same time, builders face increasing competition from foreclosures, which are hurting all property values.” As noted before, though, new home sales are a lousy predictor of the broader housing market because they account for only 7% of total sales and because the inventory of existing homes is huge. Good weather counts—Feb was the 17th warmest Feb in 118 years.
We cannot find a resting point for risk appetite. It seems to be gyrating so quickly from one half-day to the next that nobody knows quite what to think about it. The very idea of “rational expectations,” the academic’s starting and fall-back position, never looked so ridiculous. Emotion is what drives markets. Therefore, it’s lame, but watch equities.
|SPOT||CURRENT POSITION||SIGNAL STRENGHT||OPEN DATE||OPEN RATE||POSITION GAIN/LOSS|
|USD/CAD||0.9999||SHORT USD||WEAK||01/04 /12||1.0123||1.24%|