Summary for the 28th of March 2019


The President of the European Central Bank signaled at the speech yesterday that rate hike from the ECB would be postponed. He also said that the ECB would reflect possible measures to mitigate the side effects of low interest rates. The speech led to further decline of Germany’s treasury yield to -0.08%. The yield was already below zero due to last week PMI data. US 10 year treasury yield also fell to 2.35%, lowest in 15 months. The market is expecting a 78% probability of a rate cut in the US during the end of this year.

The British parliament still can’t agree on a Brexit solution. None of the eight indicative Brexit alternatives got a majority. The most popular alternative was of customs union which got 268 votes of 320 votes needed. Theresa May offered to resign if her Brexit deal got the majority, but still, her deal didn’t get the majority.

US balance of trade shows a surprisingly positive numbers in January. Deficits narrowed more than expected to 51.1 bn. dollars. The level is as low as the level of November 2018. China has contributed the most to lower the deficits, followed by Europe. China has also made new proposals in the trade talk. Issues like forced technology transfer were brought up.

Indices for 28th of March:
Dow: -0.1% (27th of March)
S&P 500: -0.5% (27th of March)
Nasdaq: -0.7% (27th of March)
Nikkei: -1.5% (28th of March)
Chinese indices: -0.6% (28th of March)
STOXX Europe 600 Index: -0.12% (28th of March)

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