NEWS / Foreign Exchange

Indices hold ground in final trading session of the week

- Markets have been zigging and zagging on a variety of headlines this morning, but overall US equity markets are holding close to unchanged.  Equity futures dipped ahead of the NYC open on headlines out of the Persian Gulf indicating UK sailors are being held by Iranian forces.  Initially bond futures opened higher while the Dollar saw some selling mostly against the Swiss Franc.  Crude and Oil ticked higher but the reaction was somewhat muted as market participants were reminded of a similar incident more than a year ago where UK sailors were retuned unharmed.  Equity markets pushed out to session highs after existing home sales data for Feb was reported at the highest level since May.  A report of a bid for Chrysler Group has shares of DCX up 4.4% and GM +4%.  KRON is up 13% after being taken out in a LBO deal.  Shares of NKE ??“1.5%, JBL ??“9% and CMVT ??“4% are weak after reporting earnings.  Homebuilding stocks are mixed despite the encouraging data.  Genentech is off 3.8% after canceling and Avastin lung cancer study.

- Treasury futures reversed into negative territory following the home sales data.  The yield on the 10-year is holding close to its highest levels of the month after testing 4.6%.  The benchmark (2-10 year) curve is holding essentially flat while there has been no movement in the July Fed Funds contract.  The Dollar has firmed noticeably since the 10 AM existing home sales release.  EUR.USD trades below the 1.33 figure while Cable dipped below 1.96 briefly.  The USD/YEN recouped some losses but is still off 28 ticks at 117.81.  The Dollars biggest rally came against the Swiss Franc as it reversed some 75 pips from lows made following the initial Iran headlines to trade at 1.2170 currently.  Dollar strength led to some selling in the April Gold contract as it is now off 1% to $657.20.