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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (58691)	7/15/2003 3:27:39 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

15:21 ET Housing Index weakens as yields surge : A substantial increase in the 10-yr yield has taken place over the last month which has coincided with the topping process that has developed Housing Index (HGX). A look at the combined trading action over the last year (only one year history available for the HGX) shows that prior to this spring the yield and the housing market were highly correlated. From an economic perspective this is logical as yields gains would coincide with a stronger economic conditions. The divergence began with the acceleration of the Dollar's breakdown and a dramatic increase in talk of deflation potentially developing. A reversal of the Dollar/deflation dynamic is now clearly evident but the divergence with the housing index continues.