As global support continues to grow for Greece, nerves are calming and investors are willing to buy again.

Overnight, Greece received a €14.5 billion tranche in emergency aid from the European Union, as French Finance Minister Christine Lagarde said the union needs to “put money where its mouth is.” The money will be used to pay off €8.5 billion payment in 10-year bonds maturing tomorrow. 

Meanwhile, Chinese President Hu Jintao said nations must continue working together to ensure a global economic recovery, adding that China would continue to help Greece with its fiscal problems.

Ninety minutes before the opening bell, Dow futures are up 58 points to 10,657 and S&P 500 futures are 8.25 points higher at 1,142.75. The 2 year Treasury note is unchanged at 0.818% and the benchmark 10 year Treasury note is less than 1 basis point higher in yield at 3.487% to start the session. The Fannie Mae 4.5 MBS coupon is -0-01 at 101-16.

Commodities are mixed: WTI crude oil is up $2.08 to $72.16 but Spot Gold is down $18.00 to $1,210.10.

Key Events Today:

8:30 ― Housing Starts, a measure of new construction activity, should grow for the fourth consecutive month in April. The median estimate among forecasters is to see an annualized pace of 650k housing starts, up from 626k in April. Predictions range from 620k to 673k, as the expiration of the homebuyer’s tax credit on April 30 could have an uncertain impact on the report.

Economists at IHS Global Insight said the expiring tax credit should help, along with improving labor markets. “Going forward, job growth and low inventories of new homes should translate into rising starts/permits ―although housing starts will remain below normal levels for the next two years.”

Similarly, economists at BBVA expect residential construction to recover at a slow pace throughout the year. 

They added, “Since housing starts have a powerful ripple effect, a positive result for this indicator would filter through to durable goods consumption, industrial production and corporate profits.”

8:30 ― The Producer Price Index should provide further evidence that inflation is not a concern. In March, the headline surprised investors by climbing 0.7%, but in April the increase is expected to be just 0.1%. The core index, which excludes volatile energy and food prices, rose only 0.1% in March and is expected to repeat the gain in April.

“Energy prices including gasoline should retreat around 1.8%, while food prices should ease back 0.4% after March's 2.4% jump,” predicted economists from IHS Global Insight. “Excluding food and energy, core producer prices should inch up 0.1%. March's surging jewelry prices will not repeat, but neither will the drag from falling vehicles prices.”  

12:20 ― Sandra Pianalto, president of the Cleveland Federal Reserve, speaks on forecasting in uncertain times to the Economic Club of Pittsburgh.

Treasury Auctions:


  • 11:30 ― 4-Week Bills