Market movers today
With no major data releases, financial markets are likely to be in wait-and-see mode ahead of the FOMC meeting tomorrow.
The G20 finance ministers and central bank governors’ meeting in Buenos Aires finishes today, where the statement on trade will be particularly interesting.
In Denmark, data for consumer confidence is due, which had a strong start to 2018, with increases in January and February taking the indicator to its highest level since July 2017. We expect the mood to remain upbeat in March and estimate an unchanged score of 8.5.
Sweden’s Riksbank Deputy Governor Henry Ohlsson is scheduled to speak about the economic situation and current monetary policy today.
In Norway, focus turns to the opposition’s vote of no confidence in the Minister of Justice Sylvi Listhaug after a Facebook update last week. The vote could ultimately result in Prime Minister Erna Solberg deciding the newly-formed government resign. For markets, however, the impact should be modest even in a situation where the government resigns.
Selected market news
Facebook scandal induces heavy equity tumble. The catalyst was tech stock Facebook, which fell close to 7%. In an Orwellian twist, the Financial Times reported that data firm Cambridge Analytica may have used Facebook to harvest data on 50 million people without consent. The user information was exploited for political benefit, including aiding the Trump presidential campaign. The data firm has close ties with President Trump’s former Chief Strategist Steve Bannon. Officials across the Atlantic are calling for action.
The tech sell-off led stocks into the red. US flagship stock index S&P 500 was down over 2% before recovering up to the close. The implied volatility index VIX rose up to 19 and high yield credit spreads rose.
The Trump administration plans to impose tariffs worth USD60bn on China as early as this week, according to WaPo. For more on the administration’s ongoing assault on globalisation see Strategy – Trump’s attack on globalisation continues.
The EU and UK have settled on a Brexit transition deal. The conditional agreement grants British business with much needed visibility with a transition period lasting 21 months. Pressure has been mounting on the May administration, which hailed the deal as a big win. Difficult issues such as the Northern Ireland border and governance were left for the future. The pound surged against the euro, while retracting roughly half in the evening.
With no real macro events or releases today it’s all eyes on the FOMC tomorrow. We expect a 25bp rate hike to 1.5-1.75% and guidance with respect to future hikes remaining relatively intact
