International Stocks Firm on Commodity Gains and Weak Dollar

Overnight international equity markets rallied, led by emerging markets, as firmer commodity prices and a weaker dollar bolstered the investment thesis for these countries. The Argentine stock market was up over 4%, while most other emerging markets saw the average stock up 1-2% on the day.  The US dollar sell off, especially vs. commodity-exporter nations like Australia and New Zealand, also played a big role in the positive tone in equities as well.

Back in the U.S., Fed Presidents Dudley (NY) and Rosengren (Boston) were on the tape alluding to a generally positive domestic economic outlook and the potential for the financial markets to be underestimating likely Fed moves on short rates over the coming months and years.

U.S. housing data released today was definitely much weaker than forecast, although this monthly data is known to be quite volatile and subject to large revisions.  Housing starts in March came out at 1.089mm, well below the 1.166mm forecast and lowest level since last October, while the Building Permits data was similarly weak coming out at 1.086mm vs 1.2mm expected.

Rates have continued to tick up today, having spiked 5-6 bps higher intraday, but trading back to 2-3 basis points higher across the curve currently. Commodities are up across the board with energy up 1-3%, metals up as much as 4.5%, and ags up 1-2%