Market Update: Tuesday, March 20, 2018


Daily Insights

  • Trade talks heat up. The United States is expected to announce up to $60 billion in tariffs on Chinese goods this week in response to China’s intellectual property practices. The United States is also meeting with European trade officials this week at the G-20 meeting of finance ministers to discuss exemptions to steel and aluminum tariffs, as well as broader trade considerations as the White House tries to coordinate pressure on China. Chinese President Xi Jinping said he doesn’t want a trade war, he will open up manufacturing, and he won’t force foreign firms to transfer technology, all of which could help ease tensions. We see protectionist trade policy as the biggest risk facing equity markets currently, as we highlighted in this week’s Weekly Market Commentary.

  • Fed meeting starts today. The latest Federal Open Market Committee meeting starts today and will end with a statement, updated economic projections, and Federal Reserve (Fed) Chair Powell’s first post-meeting press conference. As discussed in this week’s Weekly Economic Commentary, markets will be watching tomorrow’s events closely to determine the Fed’s current stance on economic growth and inflation, and how they will impact the path of rate hikes moving forward. Breakeven inflation expectations, which are determined by the difference between the yields on the 10-year Treasury note and the 10-year Treasury Inflation-Protected Security (TIPS), fell slightly following the February employment report and the Consumer Price Index report; though at 2.08%, remain within their recent range and above the Fed’s 2% target. We continue to expect three Fed rate hikes in 2018, with the first coming tomorrow.

  • Time to go long the short end? Sector selection and yield curve positioning decisions are difficult in rising rate environments, but in this week’s Bond Market Perspectives (due out later today), we look at how shorter-maturity fixed income may be offering an enticing relationship between risk and reward, and a place for suitable investors to play defense.



Click Here for our detailed Weekly Economic Calendar


  • Germany: PPI (Feb)
  • UK: CPI & PPI (Feb)
  • UK: Core CPI (Feb)
  • UK: House Price Index (Jan)
  • Germany: ZEW Survey (Mar)
  • Eurozone: ZEW Survey (Mar)
  • Eurozone: Consumer Confidence (Mar)
  • Japan: Leading Index (Jan)
  • Japan: Machine Tool Orders (Feb)
  • China: Foreign Direct Investment (Feb)



  • Weekly Jobless Claims (Mar 17)
  • FHFA House Price Index (Jan)
  • Markit Mfg. & Services PMI (Mar)
  • LEI (Leading Index) (Feb)
  • Kansas City Fed Mfg. Activity (Mar)
  • France: Markit France Mfg. & Services PMI (Mar)
  • Germany: Markit Germany Mfg. & Services PMI (Mar)
  • Eurozone: Markit Eurozone Mfg. & Services PMI (Mar)
  • Germany: IFO (Mar)
  • Eurozone: Current Account Balance (Jan)
  • Italy: Current Account Balance (Jan)
  • UK: Retail Sales (Feb)
  • ECB: Publishes Economic Bulletin
  • BOE: Bank Rate
  • BOE: Asset Purchase Target
  • BOJ: Outright Bond Purchase
  • Bank of Canada: Wilkins
  • Japan: All Industry Activity Index (Jan)
  • Japan: CPI (Feb)


  • Durable Goods Orders (Feb)
  • Cap Goods Shipments & Orders (Feb)
  • New Home Sales (Feb)
  • Revisions: Industrial Production & Capacity Utilization
  • Bostic (Dove)
  • Kashkari (Dove)
  • Canada: Retail Sales (Jan)
  • Canada: CPI (Feb)
  • Bank of Russia: Key Rate
  • Bank of Russia: Nabiullina

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The economic forecasts set forth in the presentation may not develop as predicted.

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