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Holding Modest Gains, Waiting For Cyprus To Vote
Posted to: Micro News
Tuesday, March 19, 2013 9:25 AM
Bond markets began the overnight session weaker, heading higher in yield for most of the Asian trading hours. The stock lever was well-connected and stock prices began to fall along with Treasury yields. This was most salient after a spokesman for Cyprus said that Parliament would not be able to approve the bank levy.
Several hours later, details emerged regarding some structural changes to the plan that would spare deposits under €20k, and adjust the percentage to 6.7 for deposits from €20k - €100k. Anything over that would get hit with 9.9%. We'd emphasize the murkiness of the details at this point though. Even within the past hour, other reputable sources are mentioning that Cyprus considering removing the levy on everything under €100k and raising it over the previously sacred 10% mark on deposits over €100k. This sounds a lot like the 15.6% plan mentioned in wires late yesterday.
Whatever the case, the vote--if it happens today--should be coming up in a few hours and more than anything, this dominates the market's focus.
Housing Starts data was completely glossed-over in terms of market reaction. S&P Futures bottomed out at 6:50am and moved back to overnight highs, being careful not to break them. Treasuries acquiesced to the "risk-on" bounce, but certainly haven't followed equities, preferring instead to simply level off in the middle of yesterday's overnight session.
This leaves 10yr yields at 1.9355 and Fannie 3.0s up 3 ticks at 103-01. S&P futures are 2.75 pts higher at 1549.50 vs overnight and AM highs near 1551.
There are no further economic reports out today, and to reiterate, we're waiting on Cyprus news, including, but not limited to (and not necessarily counting on) a parliamentary vote.
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