Hello, How Low?

March 25, 2019 Chatham Financial

Prior Week Summary

Despite dovish sentiment from the Federal Reserve, U.S. equities moved lower last week as global growth fears intensified amid weak manufacturing data from Germany and the U.S. The FOMC held interest rates steady at the conclusion of their two-day policy meeting and indicated that rate hikes are on hold for the rest of the year as the central bank shifted forecasts for future rate hikes and economic growth lower. Speaking at the press conference following the FOMC’s decision, Federal Reserve Chairman Jerome Powell said, “We don’t see data coming in that suggest that we should move in either direction. They suggest that we should remain patient and let the situation clarify itself over time.” As we head to print, market participants are pricing in a rate cut at the December FOMC policy meeting.

European Union leaders voted to give the United Kingdom an unconditional, two-week extension to their departure from the E.U., averting a “no-deal” Brexit scenario at the end of this month. U.K. lawmakers are expected to vote early this week on Prime Minister May’s newest proposal with a Brexit deadline now scheduled for April 12th. Separately, Robert Mueller’s investigation into Russian interference in the 2016 presidential election concluded that “The investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”

The Look Forward

Market participants are looking forward to updated figures on housing starts, new home sales and consumer spending among others. The U.S. and China are scheduled to resume trade talks in Beijing this week.

Rates Snapshot

Sources: Bloomberg Finance L.P., (Treasuries) Chatham Financial (Swap Curves), FHLB Boston, Chicago, Dallas, Des Moines for FHLB Advance Rates. Wells Fargo Brokered CD Indications.

Market Implied Policy Path (Overnight Indexed Swap Rates)

Source: Chatham Financial

Fixed Income Snapshot

Source: Bloomberg Finance L.P.

Disclosures

Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit https://www.chathamfinancial.com/legal-notices/.

Transactions in over-the-counter derivatives (or “swaps”) have significant risks, including, but not limited to, substantial risk of loss. You should consult your own business, legal, tax and accounting advisers with respect to proposed swap transaction and you should refrain from entering into any swap transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss. This material has been prepared by a sales or trading employee or agent of Chatham Hedging Advisors and could be deemed a solicitation for entering into a derivatives transaction. This material is not a research report prepared by Chatham Hedging Advisors. If you are not an experienced user of the derivatives markets, capable of making independent trading decisions, then you should not rely solely on this communication in making trading decisions. All rights reserved. 19-0085

Another Quarter in the Books

Capping an end to one of the best quarters in recent memory, U.S. equity markets marched higher last week a...

Market Insights - March 18, 2019

Despite mixed economic data and Brexit concerns, U.S. equity markets marched higher last week, rebounding f...

Return to Home

Chatham Financial Resource Center

Hello, How Low?

Prior Week Summary

The Look Forward

Rates Snapshot

Market Implied Policy Path (Overnight Indexed Swap Rates)

Fixed Income Snapshot

Disclosures

Previous Article

Next Article

Hello, How Low?

Prior Week Summary

The Look Forward

Rates Snapshot

Market Implied Policy Path (Overnight Indexed Swap Rates)

Fixed Income Snapshot

Disclosures

Previous Article

Next Article

Other content in this Area

Despite intensifying global growth fears, U.S. equity markets marched higher last week, buoyed by a solid start to first-quarter earnings season and continued progress in U.S.-China trade talks.

U.S. equity markets moved higher last week, as the three major U.S. indices reached 6-month highs on the back of solid domestic economic data and perceived progress in U.S.-China trade negotiations.

Capping an end to one of the best quarters in recent memory, U.S. equity markets marched higher last week as investors reacted to U.S.-China trade negotiation developments

Despite mixed economic data and Brexit concerns, U.S. equity markets marched higher last week, rebounding from sharp declines the week prior.

After several weeks of gains, U.S. equity markets moved broadly lower last week, primarily driven by global growth concerns, a weak jobs report and a policy reversal from the ECB.

After a busy week on both the economic and geopolitical front, U.S. equity markets edged higher, including the S&P 500 index, which closed above the psychologically-significant 2,800 price level...

Despite disappointing economic data and fears of a global slowdown, U.S. equity markets continued to march higher, extending the rally that has propelled markets upward since the turn of the year.

U.S. equity markets moved broadly higher last week, largely buoyed by President Trump’s signing of the government spending bill, as well as U.S.-China trade negotiation optimism.

Worries of an intensifying trade war between the U.S. and China, and fears of another U.S. government shutdown led U.S. equity markets lower last week, ending a month-long rally.

After a shaky start to the week, U.S. equity markets moved higher, capping an end to the best month for global equities in over seven years.

President Donald Trump and members of Congress agreed to reopen the government on Friday, ending at least temporarily, the longest government shutdown in U.S. history.

Despite ongoing worries of a global economic slowdown and the continued U.S. government shutdown, U.S. equity markets rose for the fourth straight week.

The equity markets moved broadly higher last week, largely on U.S.-China trade optimism, and dovish sentiment from Fed officials.

The turn of the year also brought elevated volatility to funding markets, which put the differences between LIBOR and SOFR on full display.

The recent bout of market volatility seems to be accelerating into year-end as concerns over economic growth prospects and geopolitical risks take center stage.

The markets went for a ride last week as investors had to square their optimism around the prospect for an end to the escalating trade war between the U.S. and China.

Minutes for Nov FOMC meeting suggest the Fed remains on its current trajectory of targeted increases in the Fed Funds rate while keeping an eye of the risks these hikes may have on continued growth.

The recent round of market volatility continued during the Thanksgiving holiday shortened week, with equities falling nearly 5%, WTI Crude falling approximately 10.5%, and the 10-year Treasury note...

A strong risk-off sentiment took hold last week on the back of declining equities, commodities, and bond yields.

As was widely anticipated, the FOMC kept the policy rate unchanged at a range of 2.0% to 2.25%. There were some small changes to the language in the policy statement...