EUROZONE BUSINESSES GROWTH IS WORSE THAN EXPECTED IN MARCH as factory activity contracted at the
“fastest”
pace in nearly six years,
suffered by a substantial drop
in demand. The manufacturing PMI sank to 47.6 from February’s 49.3. In addition, the
n
ew orders index dropped to 44.5 from 44.6,
a level not seen since the end of 2012. Germany manufacturing
further weakened on unresolved trade disputes and exacerbating slowdown in Europe. “The
German manufacturing recession is getting worse,” said
Andrew Kenningham at Capital Economics.
IHS Markit stated, "The first-quarter GDP grew by
0.2 percent, below the
0.3 percent prediction."
This supports the ECB’s
decision on pushing out its
rate hike until 2020
at the earliest to help
revive the economy. The UK 10-year Gilt
declined basis points.
FTSE 100, -2.00%,
STOXX Europe 600 -1.10%,
CAC 40 -1.83%,
German DAX -1.20%.
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INVESTMENT-GRADE BONDS EDGED OUT HIGH-YIELD DEBT as bond investors scaled back risk upon the market digesting the Feds dovish tone following yesterday’s conference. Data points to an expanding economy for the first time in five months aided by “a rebound in stock prices” and “accommodative financial conditions”. A Moody’s Analyst indicated expectations need to be reasonable for 2019, “The U.S. economy enjoyed a banner year in 2018, juiced up by massive deficit-financed tax cuts for individuals and businesses and increases in government spending,”. The 10-year U.S. Treasury note sank 8 basis point. S&P +1.09%, Dow +0.87%, NASDAQ +1.42%
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INVESTMENT-GRADE BONDS EDGED OUT HIGH-YIELD DEBT as bond investors scaled back risk upon the market
digesting the Feds dovish
tone
following yesterday’s conference. Data points to an
expanding economy
for the first time in five months aided by
“a rebound in stock prices”
and
“accommodative financial conditions”.
A Moody’s Analyst indicated expectations need to be reasonable for 2019,
“The U.S. economy enjoyed a banner year in 2018, juiced up by massive deficit-financed tax cuts for individuals and businesses and increases in government spending,”.
The
10-year U.S. Treasury note sank 8 basis point.
S&P
+1.09%,
Dow
+0.87%,
NASDAQ
+1.42%
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BANK OF ENGLAND KEEPS RATES ON HOLD
AT 0.75 PERCENT AS BUSINESSES “BRACE” FOR
possible
no-deal Brexit. “The
economic outlook will continue to depend significantly on the nature and
timing of EU withdrawal,” the BoE said. Brexit uncertainty has created volatility in British asset prices and sterling is impairing businesses
confidence and investment. Inflation is running below the BoE’s 2 percent target, which is one
rationale on not raising rates; allowing
borrowing costs to be low-cost.
Banking shares had risen earlier this week on signs of a merger between Deutsche Bank and Commerzbank being
officialized soon. Bundesbank sees no “credit crunch” after Brexit. The UK 10-year Gilt
declined 10 basis points.
FTSE 100, +1.05%,
STOXX Europe 600 +0.12%,
CAC 40 +0.19%,
German DAX -0.26%.
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THE FEDERAL RESERVE ABANDONS PLANS TO RAISE RATES IN 2019 dramatically shifting to a very dovish stance on economic policy. Jerome Powell reaffirmed his “patient” stance citing muted inflation, in addition, the Fed will terminate its balance sheet reductions in September. Powell stated, “I think we’re in a good place right now. We’re being patient, we’re watching, we don’t see any data pushing us to move rates in any direction. We’re going to watch carefully and patiently to allow events to evolve. And when they do clarify, we will act appropriately.” The 10-year U.S. Treasury note sank 8 basis point. S&P -0.29%, Dow -0.55%, NASDAQ +0.07%
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THE FEDERAL RESERVE ABANDONS PLANS TO RAISE RATES IN 2019 dramatically shifting to a very
dovish stance on economic policy. Jerome Powell reaffirmed his
“patient”
stance citing muted inflation, in addition, the Fed will terminate its
balance sheet reductions
in September. Powell stated, “I think we’re in a
good place right now.
We’re being patient, we’re watching, we don’t see any
data pushing us to move rates in any direction. We’re going to watch carefully
and patiently to allow events to evolve.
And when they do clarify, we will act appropriately.” The
10-year U.S. Treasury note sank 8 basis point.
S&P
-0.29%,
Dow
-0.55%,
NASDAQ
+0.07%
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GERMANY IS IN A “STRONG” POSITION to weather
Brexit
and trade shocks, stated by Finance Minister Olaf Scholz. The country has
solid
public finances and a
“vibrant”
domestic economy to
cope with headwinds. German cabinet authorizes a budget for 2020 that calls for
1.7 percent spending hikewithout issuing new debt. The
Spanish economy
expanded in early 2019, “
stronger-than-expected domestic
demand
offset a slowdown in exports”. Spanish GDP grew 0.6 percent in January, to maintain this
growth, the Bank of Spain noted reducing public deficit and debt to protect the
economy against future shocks. Assets worth around a trillion pounds is moving from
London to hubs in the
European Union ahead of Brexit. The UK 10-year Gilt
declined three
basis points.
FTSE 100, -0.16%,
STOXX Europe 600 -0.
68%,
CAC 40 -0.47%,
German DAX -1.34%.
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JUNK BONDS PREVAILED AGAINST INVESTMENT-GRADE DEBT in net price gains linked to actual trades as a slight risk-on sentiment returns to the bond market. Investors are progressively becoming bullish on Treasuries as fewer investors are inclined to short Government bonds amid a surprise jump of weak economic data. Equities snapped a six-day win streak the, S&P slipped -0.01%, the Dow settled -0.09% lower, and the NASDAQ rose +0.12%. Gold ticked higher closing above $1,300 an ounce. The 10-year U.S. Treasury note rose 0.8 basis point.
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JUNK BONDS PREVAILED AGAINST INVESTMENT-GRADE DEBT in net price gains linked to actual trades as a slight risk-on sentiment returns to the bond market. Investors are
progressively becoming bullish
on Treasuries as
fewer investors are inclined to short Government bonds
amid a surprise jump of weak economic data. Equities
snapped a six-day win streak
the,
S&P
slipped -0.01%, the
Dow
settled -0.09% lower, and the
NASDAQ rose +0.12%. Gold ticked higher closing above $1,300 an ounce. The
10-year U.S. Treasury note rose 0.8 basis point.
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market update
RISK-ON SENTIMENT REGAINED CONTROL as investors pour capital into equities. The pound rallied to $1.3282, “The predominant notion adopted by the market is that as long as the
worst case scenario of hard
Brexit is avoided by delaying
Brexit, the pound is a buy on dips,” stated by
Rabobank strategists. Advisers to the German government on
Tuesday cut its growth forecast for this year to 0.8 percent.
Christopher Schmidt, one of the
advisers
mentioned: “
German economic boom
is over but a recession is not currently expected due to the
robust domestic
economy.” The ZEW indicator of economic sentiment points to relatively weak growth for the first half of 2019
fueled by industrial orders posting their largest drop in seven months.
The UK 10-year Gilt elevated two basis points.
FTSE 100, +0.48%,
STOXX Europe 600 +0.
60%,
CAC 40 +0.27%,
German DAX +1.10%.
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research,
EU,
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European
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