Market Action

  • Markets around the globe moved higher in unison this week although the catalysts seem to deviate. U.S. data this week showed promise for the economy while in China and Europe weak reports suggest further easing measures for longer.
  • The most recent U.S. jobs report provided a mixed surprise to markets on Friday. On the positive, the number of new jobs surged past expectations. However, wages were weaker than expected, posing a conundrum on the quality of the report.
  • China’s National People’s Congress will meet for a 10-day gathering where the thirteenth Five-year Plan is expected to remain in focus. The government announced a target growth rate of 6.5%-7% late on Friday. Stimulus plans could be detailed as a result of the Congress.
  • PM Abe announced that there were no plans to pause or eliminate a plan to raise sales taxes to 10% next year. The measure is intended to help curb Japan’s fiscal imbalances but a similar hike last year dented demand and economic growth substantially. Japan issued bonds this week with a negative yield for the first time.
  • Argentina reached an agreement with holdout creditors in a deal that will see bondholders obtain 75% of outstanding amounts. The agreement should pave the way for Argentina to issue two or three new bonds in April according to the Finance Minister.
  • India’s new budget helped provide the Sensex with one of its best months in over two years. The government’s commitment to fiscal targets gained the approval of markets given the country’s history of deviating from fiscal prudence.
  • A number of major global economies received credit downgrades this week. Brazil and Russia received further downgrades due to weak economic growth amidst the recent slump in commodities. China also saw its outlook lowered this week from Moody’s on weakening fiscal metrics and deterioration in its foreign exchange reserves.

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