This week saw continued focus on the rise of global bond yields as US 10 year yields were rising again. However, the flat US CPI data midweek stopped the rapid rise in yields. The headline came in at +1.7% y/y which was in line with expectations but was enough to give the USD a break from its recent run higher. Next week there will be an intense focus on the Fed. Global stocks found dip buyers this week as the ‘TINA’ stock option played out. This is the ‘There Is No Alternative’ (TINA) trade. This keeps equity markets rising for now on easy monetary conditions.

Other key events from the past week

• CAD: Interest rate, Mar 10. Interest rates (0.25%) remained unchanged & the pace of bond purchases will be adjusted as required. The BoC meeting was as expected and this just shifts extra focus onto the Fed’s rate decision next week.
• Global stocks: ‘buy the dip’, Mar 11. Low-interest rates, high levels of quantitative easing, and large amounts of fiscal stimulus are keeping global stocks bought on dips lower. The FTSE 100 looks set to gain in a risk on environment.
• ECB: Interest rate, Mar 11. The ECB accelerated the pace of PEPP purchases, but Christine Lagarde denies that the ECB is doing Yield Curve Control (YCC). The Interest rate and the size of the PEPP program were kept unchanged.

Key events for the coming week

• USD: Interest rate, Mar 17. The focus next week will be on the Fed. Will they bring forward interest rate rises from 2024? Will the Fed maintain a very dovish outlook? Expect a big week for the USD! See what the Fed said at their last meeting here.
• GBP: Interest rate, Mar 18. The Bank of England is expected to keep interest rates unchanged next week. However, the UK has now vaccinated 1/3 of its population. Will that lead to a more optimistic outlook for the Bank of England?
• NZD: GDP Q4, Mar 18. New Zealand’s economy should show gains from New Zealand’s low COVID-19 infection rates. Will this open up a central bank divergence between the RBA & the RBNZ favouring AUDNZD selling?