FinSer 

  Financial Focus
March 18, 2024
          

      GOOD MORNING! Markets were spooked last week as Consumer and Producer Price Indexes came in higher than expected. Higher prices weighed on small business and consumers sentiment surveys. The markets traded with caution as the Fed is likely to remain cautious with respect to rate cuts. The upcoming policy meeting will likely see the Fed to be willing to err on the side of leaving rates higher for longer rather than take the risk of re-igniting price pressure by easing rates prematurely. The reaction by the markets was a bear flattening of the Treasury curve with yields on short-to-intermediate maturities climbing higher than yields on longer maturating bonds. In turn, the higher market rates stalled the stock rally, leaving the benchmark equity indices flat to slightly lower on the week.
      There is a cluster of central bank meeting this week. The markets will first hear what, if anything, the Bank of Japan (BOJ) does. With most central banks still leaning toward cutting rates sometime in the future, the BOJ may be the exception. The European Central Bank (ECB) will meet this week and will likely avoid doing anything,. The primary focus here and for the US markets is the Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday. The Fed is widely expected to hold rates steady putting the emphasis on the dot plot and Powell’s post-meeting press conference Wednesday afternoon. This week’s economic releases will be housing related with the first being today’s National Association of Home Builders Housing Market Index. The Treasury will be offering 3- and 6-month T-bills today. Expect another volatile week.

 

GENERAL
TODAY             
PREVIOUS        
FED FUNDS
5.25% to 5.50% 5.25% to 5.50%
S & P 500
5117.09 5150.48
GOLD
2160.90 2173.30
YEN
149.14 148.77
EURO
1.0899 1.0891
WEST TEXAS CRUDE
81.04 81.26
T-BILLS
YIELD                
YIELD                 
3 MONTH
5.37 5.38
6 MONTH 5.32 5.31
1 YEAR
5.04 5.02
T-NOTES / BONDS
YIELD                 
YIELD                  
2 YEAR
4.71 4.68
3 YEAR 4.49 4.45
5 YEAR 4.32 4.28
10 YEAR
4.30 4.27
30 YEAR 4.44 4.41
                                                         Data Source: Bloomberg Financial Markets