Summary for the 29th of March 2019


One of the factors behind the decline of the long treasury yield could be from the Fed's interest rate decision meeting on the 21st of March where it had announced that the balance sheet reduction program would slow down from May and end in September, and after that it would reinvest the principal payments from MBS holding in treasury securities. (what is MBS?).Two of the Federal Reserve representatives were trying to increase market confidence yesterday, St. Louis Fed President Bullard said yesterday that a rate cute was still premature to talk of, while New York Fed President, John C. Williams said that inverted yield curve no longer is a good indicator for a recession (paywall to read the article).

The US GDP growth rate grew by 2.2% in the fourth quarter of 2018. The market was expecting a growth of 2.6%. Consumer spending and business investment rose less than expected, also residential investment fell more than expected. In comparison, the GDP growth for previous two quarters were 4.2% and 3.2%. 

Indices for 29th of March: New signals from trade talk have lifted the Asian stock markets today. A more stabilized treasury yields have compensated for the decline of the US GDP growth.

Dow: +0.4% (28th of March)
S&P 500: +0.4% (28th of March)
Nasdaq: +0.3% (28th of March)
Nikkei: +0.7% (29th of March)
Chinese indices: +3.2% (29th of March)
STOXX Europe 600 Index: +0.60% (29th of March)

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