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Market news - 22 March 2019

by  Niloofar Rafiei  |  22 Mar 2019


  • The Federal reserve meeting this week exceeded the market's already dovish expectations. The majority of FOMC members now expect no rate increase this year. (The median expectation in December 2018 was for two hikes in 2019.) Just one hike is expected in 2020. Moreover, it was confirmed that the balance sheet shrinkage process will conclude later this year.
  • The bellwether Philly Fed manufacturing survey produced a strong headline reading in March (+13.7 vs +4.8 consensus forecast), although details were mixed. Shipments and new orders components rose, but employment and six month ahead activity expectations declined. US PMI data also disappointed.


  • Provisional March euro area PMIs were very weak, particularly the manufacturing readings, with Brexit and ongoing uncertainties on the US-China trade deal cited as particular concerns.


  • The Bank of England meeting was a non-event, as the committee is unable to progress its agenda of gradual rate hiking in light of Brexit uncertainty.
  • This week for the first time, and against a backdrop of rallying global rates in view of the Fed meeting and weak data, the sterling money market curve has started to price in some cut in Bank Rate in the middle part of this year.

Global equity markets

  • After a strong start to the week, buoyed further by the dovish Fed outturn, equity markets sagged into the weekend as growth concerns mounted on the downbeat PMI survey data.