It was another positive overnight session for risk markets, with virtually all major equity indices higher on the day, and S&P 500 futures are currently up 9 points. The lack of negative headlines and risk-on sentiment is also pushing Treasury prices modestly lower and credit spreads tighter. Treasuries have traded in a fairly tight range in recent weeks, particularly on the long-end of the curve, and implied rate volatility (for Treasuries) is now approaching the historic lows reached in late 2017/early 2018. Inflation data in the eurozone and U.K. was softer in March, and the U.K. reading reduces the likelihood of a May rate hike by the Bank of England. Testifying before the House Financial Services Committee, Fed Vice Chair for Supervision Quarles supported reforms to the Volcker Act and Community Reinvestment Act (CRA) for depository institutions. Regarding CRA, Quarles said he would like “to take it off autopilot.”
Jason Haley
Managing Director, Investment Management Group
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