Bonds Fall, Crude oil rose

Even though FOMC announced this week that rates would maintain the same, yesterday announcement of increase in Home Sales sent US 10 year bonds fell by selling lower, due to investor speculation that Fed would cut rates soon.

Bonds usually rise on economic weakness and fall on strength, so it is safe to say that traders took the unexpectedly positive housing report as a major positive for the economy. A weak housing sector contributed to an economic slowdown in the U.S. over the second half of 2006, and traders have been focused on all housing reports for signs of continued weakness or a rebound. (Extracted from Futures Market Recap)

Crude oil rose nearly 1%, on geopolitical tensions stemming from Iran. Tensions in the Middle East have risen since Iran seized 15 British armed servicemen, who were conducting military operations in the Persian Gulf. Iranian-linked geopolitical tensions helped to drive the price of crude oil to record highs last summer, when crude reached about $80 a barrel. Crude fell over 30% from those record highs before bouncing on cold weather and supply issues. Natural gas fell about 0.6% on more signs of warm weather, and speculation of less demand. (Extracted from Futures Market Recap)