Summary for the 5th of March 2019


The market’s expectations of the central banks has changed in these past months. At the end of 2018, the market was expecting a 60% probability that the Fed would rise the federal funds target rate twice in 2019. Now, the market’s expectations have changed, instead of two rate hikes this year, it is expecting rather a rate cut this year.

China’s National People's Congress and The Chinese People's Political Consultative Conference have started their 10 days annual sessions ( Lianghui, Two Sessions gathering). The Chinese government has changed the GDP growth target from “about 6.5%” to between 6 and 6.5%. This implies that the economy is in a weak cyclical phase. Even though the Chinese government just announced new tax cuts for nearly 2 trillion yuan (298bn. dollars), China’s Premier of the State Council, Li Keqiang, said that China would be cautious about the use of the economic stimulus as it had done previously.

Indices for 5th of March: The US stock markets started positive yesterday, but due to the lacks news/triggers, the markets ended in negative. China’s adjustment of the GDP growth led to a negative close for the Asian stock markets.
Dow: -0.8% (4th  of March)
S&P 500: -0.4% (4th  of March)
Nasdaq: -0.2% (4th  of March)
Nikkei: -0.5%  (5th of March)
Chinese indices: (between -0.1% to +1.1%) (5th of March)
STOXX Europe 600 Index: +0.15% (5th of March)

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