March 15th, 2017
Daily Market Commentary
- As most expected, the US Federal Reserve elected to raise their key interest rate measure to a range 0f 0.75% to 1.0%, up from 0.50% to 0.75%.
- The US Consumer Price Index was up 0.1% and 2.7% in month-over-month and year-over-year terms, both in line with estimates.
- Retail sales in the US in February were up 0.1%, in line with estimates.
- The UK Unemployment rate was quoted at 4.7%, below estimates.
- Economists may be saying the Bank of Canada is on hold but the bond market is already starting to price in the chance the central bank will follow the Federal Reserve with higher rates this year. The yield on Canada’s two-year bonds rose to a two-year high this week and overnight index swaps traders have pushed the probability of a rate increase to 51 percent by December.
- The Canadian dollar’s link to oil has risen to the highest since August. The loonie slumped 2.8 percent over the last two weeks, dragged lower by West Texas Intermediate crude futures, which dropped more than 10 percent in the same period.
- U.S. stock-index futures rose, signaling gains in equities before the Federal Reserve meeting at which policy makers are expected to raise interest rates. The S&P 500 dropped 0.3 percent yesterday as lower oil prices weighed on energy shares.
- Carmakers will get another year to dispute fuel economy standards the Trump administration will scrutinize, overruling an Obama-era ruling that the industry is capable of meeting tougher mileage and emissions rules. Automakers were right to cry foul over the Environmental Protection Agency failing to collaborate with them and expediting a review of requirements for the companies to boost the fuel economy of their fleets to an average of more than 50 miles per gallon by 2025.
- European stocks rose, lifted by gains in commodity producers, as traders prepared for decisions by both the Federal Reserve officials and Dutch voters. The benchmark fell in a broad decline on Tuesday, as traders exercised caution ahead of an eventful Wednesday.
- The U.K. jobless rate matched its lowest since 1975 in the three months through January but Britons are seeing their wages go nowhere. Unemployment unexpectedly declined to 4.7 percent, matching the rate it last reached in 2005, the Office for National Statistics said on Wednesday.
- The European Union is poised to exert pressure on Britain by stalling the start of formal Brexit talks until June, eroding the time Prime Minister Theresa May has to land a deal. The 27 other members of the EU have pinpointed a meeting of government ministers in Luxembourg on June 20 as the moment to authorize the opening of talks.
- Asian stocks fluctuated as investors await the Federal Reserve’s rate decision, while mainland China shares erased losses as Premier Li Keqiang played down the risk of a trade conflict with the U.S.
- Saudi Arabia told OPEC it dialed back on some of its supply cuts last month, pumping more than 10 million barrels a day as it replenished its own storage tanks. The kingdom boosted production by 263,300 barrels a day to 10.011 million a day, according to a report from OPEC on Tuesday.
- Cathay Pacific Airways Ltd. reported its first loss in eight years and scrapped plans for a second-half dividend after competition from Chinese airlines and losses from fuel hedging dented earnings. Cathay said the operating environment in 2017 would remain challenging, and that premium travel from Hong Kong was below expectations, prompting the airline to sell such tickets at promotional prices to leisure travelers.
*All sources from Bloomberg unless otherwise specified