Prior Week Summary
U.S. equity markets continued to move 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. While retail sales numbers disappointed early in the week, a host of economic releases including the ISM Manufacturing Index and the March jobs report topped analyst estimates. The U.K. Parliament rejected four Brexit alternatives on Monday, prompting Prime Minister Theresa May to join forces with Labour party leader Jeremy Corbyn in a bid to craft a cross-party solution that could win enough support to pass through Parliament. Attempting to avoid a no-deal Brexit, May asked the E.U. to extend the Brexit deadline beyond the current date of April 12th to June 30th. While a verdict from the E.U. has yet to be reached, any extension offer will require unanimous approval from all 27 E.U. Member States.
After meeting in Washington, U.S. and Chinese officials touted progress in trade negotiations. Reports indicated that issues related to commodity purchases are beginning to clear up, but developing an enforcement mechanism remains a key obstacle. Highlighting progress in negotiations, President Trump said, “We’ve agreed to far more than we have left to agree to. This is the granddaddy of them all.”
The Look Forward
Aside from Brexit developments, market participants will be looking forward to updated figures on inflation and consumer confidence. Additionally, the ECB meets in the middle of the week and a number of U.S. banks release first-quarter earnings.
Market Implied Policy Path (Overnight Indexed Swap Rates)
Fixed Income Snapshot
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