Daily Market Color March 22, 2021Rates Fall From 14-Month Highs Treasury yields and swap rates fall to start the week Treasury yields and swap rates fell from 14-month highs ahead of this week’s Treasury auctions and Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen’s joint testimony before Congress. The 10-year Treasury yield fell ~2 bps to 1.69% while US equity indices closed in the green – the S&P 500 and DJIA rising 0.7% and 0.3%, respectively. Fed will continue to support the economy for “as long as it takes” The next two days will be closely watched by markets, as Fed Chair Jerome Powell and Treasury Secretary Janet Yellen will both appear before the House Financial Services Committee to discuss pandemic policy and their market outlook. In his prepared remarks, Powell acknowledged “the recovery has progressed more quickly than generally expected” but “is far from complete.” Sales of existing homes fell by 6.6% in February while housing supply remains low The drop in existing home sales was larger than expected and pulled the annual rate down to 6.22 million, though sales are up 9.1% from February 2020. The supply of homes is down 29.5% Y/Y at 1.03 million, the largest annual decline on record. USD/TRY nears 10-year high following surprise move by Erdogan The Turkish Lira weakened dramatically after President Erdogan unexpectedly fired Turkish Central Bank governor Naci Agbal and replaced him with a figurehead more supportive of the leader’s unorthodox monetary policy. USD/TRY shot up to ~8.50 before recovering back to a 7.7750 level, well below Friday’s closing level.