Currencies in the Pacific region have benefitted from US$ weakness, which has been on a steady decline since late last year. Asian markets were mixed. The Nikkei 225 slipped -0.17% while the Shanghai Composite added +0.64%. After recent hot CPI data from the UK, the BoE hiked 25 bps to 4.25%, the highest rate since 2008. This is the 7th consecutive hike. The SNB hiked by 50 bps. European markets slumped. The DAX edged down -0.04%. 10-year bunds yield 2.193%. Initial Claims for the week of 03/18 eased to 191K vs. consensus of 195K. The Q4 Current Account deficit narrowed slightly to $-206.8B. February New Home Sales printed a solid +1.1MoM gain, soaring past the -3.1% consensus. This is the 7th consecutive print above expectations. On YoY basis, they are down -19%. The median price went from $426.6K to $438.2K. 10-Year Notes yield 3.390%. The June US$ Index added +0.18% to 102.155. May Crude Oil fell -1.3% stronger to $69.69. April Gold shot +2.4% upwards to $1,995.90, a 1-yr high. Stocks rebounded overnight, opened stronger, and ran up +1.5% early in the session. By midday however, strength had fizzled, bears took over, and gains in the ES were dramatically pared.

Overseas traders awaited the latest FOMC announcement. The Nikkei 225 jumped +1.93% while the Shanghai Comp. added +0.31%. Feb. U.K. CPI jumped to +10.4% YoY, with retail prices up +13.8%. Europe printed gains. The DAX Index added +0.14%. 10-year bunds yield 2.329%. For the week of 03/18, the MBA Mortgage Applications Index rose +3.0% vs. a +6.5% prior reading, and EIA Crude Inventories were 1.1M bbls. The FOMC hiked the fed funds target rate by 25 bps, as expected, to a range of 4.75% - 5.00%. This is the highest benchmark rates since 2007. 10-Year Notes yield 3.461%. The June US$ Index sank -0.76% to 102.120. May Crude Oil added +1.8% to $70.90. April Gold ended +0.4% higher at $1,949.60. Shares of GME soared +40%, squeezing shorts, after they posted a surprise earnings beat, with the beleaguered BBBY and AMC also getting a sympathetic lift. Carvana restructured some debt, forecasting a narrower loss, and its shares spiked +15% higher. PacWest Bancorp shares tumbled -10% after forgoing a capital raise. Ahead of the FOMC decision, prices were both sides of even, but immediately rallied afterwards. Powell said cuts in 23 are not likely, sinking stocks.

The implicit back stop of all bank deposits by the U.S. Treasury and the Fed flipped sentiment (at least temporarily) to risk-on. Asian markets were higher. The Shanghai Composite rose +0.64%. The Nikkei 225 was closed for a holiday. European markets were strong. The DAX Index gained +1,75%. 10-year bunds yield 2.296%. February Existing Home Sales soared well beyond the +5.0% expected, printing at a +14.5% MoM gain, as mortgage rates fell. This represents 4.58M annual units vs. 4.170 expected. Prior to today’s print, there had been 12 consecutive monthly declines. YoY sales are -22.6% lower. 10-Year Notes yield 3.60%. The June US$ Index slid -0.07% to 102.860. April Crude Oil added +2.5% to $69.33. April Gold sank -2.1%, ending at $1,941.10. U.S. Treasury Secretary Janet Yellen spoke at American Bankers Association’s annual Washington Summit, attempting to reassure the public that the “Treasury is committed regarding bailouts of troubled banks. In fact, Bloomberg reports that US officials are looking at ways to possibly guaranteed ALL $18 Trillion in US deposits. Stocks started higher and posted strong gains ahead of tomorrow’s FOMC announcement.