Morning Wire TV: Daily Market Snapshot (video)
Since the Fed’s reiteration of its super dovish stance last week (Wednesday), global markets have struggled, up until yesterday. With that, there has been marked rotation out of many of the recently popular (reflation) trades and into unloved parts of the global markets.
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Many of the key mid cap country equity indices, for example, have largely chopped sideways over recent weeks (after a strong Q4 last year). The UK’s FTSE 250 is a case in point.
With its weakness since the Fed meeting last week, the index is now back at a level it first reached in mid-February (and almost reached in mid-January). The Russell 2000 index (US mid-caps) has behaved in a similar fashion as has the S&P600 (US small cap indices).
Since the Fed meeting, therefore, the froth has been coming out of many key equity markets across the globe, leaving the question: What’s next?
Key events for markets to focus on today are reasonably light. The US’s personal income and spending data, though, is important and provides insights into US households’ spending patterns as well as the level of income support emanating from the fiscal programs.
Elsewhere Euro zone finance ministers are meeting, the Bank of England’s Saunders & Tenreyro give speeches (midday & 4:45pm, respectively), while the US publishes its trade data (exports/imports), as well as the second estimate of Michigan consumer confidence.