Wall Street Greek: Today's Markets: Swiss Bank Action, FOMC on Deck

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The Swiss National Bank stole some of our Federal Reserve's thunder in today's markets, as it apparently acted to soften the Swiss franc. Durable Goods Orders came in stronger than expected, and mortgage activity improved as well. Existing Home Sales is on tap, and the FOMC Policy Statement at 2:15.

(Tickers: DIA, SPY, QQQQ, NYX, DOG, SDS, QLD, XLF, IWM, TWM, IWD, SDK, AM, BBBY, CKR, DRI, MLHR, MCZ, MON, NKE, OMN, PAYX, RHT, RAD and XRTX)

Today's Markets: Swiss Bank Action

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Market speculation is squealing that the Swiss National Bank intervened to weaken the Swiss franc. The strategy seems to have proven effective, as Swiss franc weakened to 1.51 euro today, from 1.501 previously. The Swiss government said publicly in March that it would intervene if necessary, dropping its currency that day as well. The strength of the franc has stifled Swiss exports, and so the bank felt a necessity to act. The franc also dropped as much as 2.3% against the dollar.

Markets Overseas

Asia:

MSCI Asia APEX 50: +2.19%

Japan NIKKEI 225: +0.43%

Hong Kong Hang Seng: +2.02%

China CSI 300: +1.19%

India BSE SENSEX 30: +0.69%

Europe:

DJ Euro STOXX 50: +1.62%

UK FTSE 100: +0.63%

France CAC 40: +1.27%

Germany DAX: +1.37%

(Prices as of hour of publishing, which may not be the close)

Mortgage Activity

With the contracted rate on 30-year fixed rate mortgages easing to 5.44%, from 5.5% last week, mortgage activity caught a breather. The Market Composite Index, which measures loan application volume, increased 6.6%, seasonally adjusted. The composite measure got an boost from refinance activity, with the Refinance Index improving 5.9%. The stubbornly steady Purchase Index, which measures loan activity on new housing starts, improved this week by 7.3%. Recall, in recent weeks, purchase activity has shown resilience while refinances illustrated sensitivity to long rates.

Durable Goods Orders

May's Durable Goods Orders showed unexpected strength today, as new orders rose 1.8%, against Bloomberg's economists forecast for a decline of 0.5%. May's figure compared against a 1.8% revised increase in April, and follows a recent trend of improvement. This was the third increase in the last four months. Excluding transportation, new orders increased 1.1%, against expectations for 0.8%. Excluding defense, new orders increased 1.4%.

Existing Home Sales - 10:00 AM

Like the Existing Home Sales data from the day before, economists foresee an improvement in New Home Sales for the month of May. The consensus forecasts the annual pace of sales will increase to 365K, from 352K the month before. The housing market seems to have its anchor caught finally, given the stubborn mortgage application activity in the face of rate increase of late. With builders still relatively inactive, supply has seen improvement (it's getting smaller) in recent months as well. New home supply stood at 10.1 months at last check.

FOMC Policy Statement - 2:15 PM

Based on the upward and unfavorable (for housing) movement in long-rates, we expect the Fed will refrain from any disruptive commentary. We expect the Fed may discuss its preparedness to counter any inflationary fire in an effort to talk down rates. At the same time, we see ongoing support of asset purchases. In other words, we anticipate a meticulously authored policy statement that might work in favor of the Fed's goals.

House Hearing on Fed

Regulation anyone? The House Financial Services Committee will hear testimony and weigh whether to allow the Federal Reserve to remain independent. That runs counter to the expanded powers recommended to it by the Obama Administration. Senate Democrat Chris Dodd is sternly opposed to the President's view here, stating last week that giving the Fed more powers was akin to buying your son a brand new car after he wrecked the family station wagon.

More Government...

Keeping with Washington, the SEC will meet to discuss options to allow money-market funds to float. In New York, the United Nations will take up discussion on the global crisis and its impact on economic development.

Petroleum Status

Look for the regular Petroleum Status Report from the EIA at 10:30. Last week's data showed crude oil stocks were drawn down by 3.9 million barrels. That news helped oil above $70, but recent reconciliation regarding economic recovery has brought oil lower along with equities.

Corporate Earnings Reports

Wednesday's earnings schedule includes American Greetings (NYSE: AM), Bed Bath & Beyond (Nasdaq: BBBY), CKE Restaurants (NYSE: CKR), Darden Restaurants (NYSE: DRI), Herman Miller (Nasdaq: MLHR), Mad Catz Interactive (AMEX: MCZ), Monsanto (NYSE: MON), Nike (NYSE: NKE), OMNOVA Solutions (NYSE: OMN), Paychex (Nasdaq: PAYX), Red Hat (NYSE: RHT), Rite Aid (NYSE: RAD) and Xyratex (Nasdaq: XRTX).