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Global equity markets are lower today on more trade war headlines. S&P 500 futures are off 1.5% (back to February lows), and Treasury prices are modestly higher across the curve (risk off). Following yesterday’s market close, the Treasury Department published a list of $50 billion of Chinese imports that could be subject to a 25% tariff. China quickly responded this morning with its own $50 billion list of tariffs, including autos and agricultural tariffs. Neither will go into effect immediately, and officials from both countries are reportedly negotiating behind the scenes (i.e., more bark than bite at this point). Separately on the trade front, reports from the White House suggest that an updated NAFTA could be announced in the next two weeks, with a goal of having an agreement struck ahead of the Mexican election in July. The ADP employment report showed private payrolls adding 241,000 jobs in March, which was 31,000 above expectations.

To view ALM First’s full daily market commentary, please click here.

Treasury prices are lower this morning following several large block sales overnight in the futures market, and Asian and European equity markets are weaker today in a follow through to yesterdayai??i??s tech-led plunge in U.S. stocks. S&P 500 futures are pointing to a modest recovery at the open this morning (+14 points). There werenai??i??t really any major headlines overnight, and the economic calendar is essentially empty today outside of two Fed speakers (Kashkari and Brainard). The focus now shifts to Fridayai??i??s employment report and speech by Fed Chair Powell. Three-month LIBOR reset higher for the 40^th consecutive day (2.321% today), and the yield curve has steepened slightly this week after reaching a new post-crisis low for the 2-year/10-year Treasury yield spread on March 29.

Jason Haley
Managing Director, Investment Management Group

To view ALM First’s full daily market commentary, please click here.Ai??

Treasury prices are lower this morning following a quiet overnight session for all financial markets (Europe, Hong Kong, and Australia closed for holiday), and U.S. equities are poised to open lower today. S&P 500 futures are currently down 9 points after China announced retaliatory tariffs of up to 25% on 128 different types of U.S. imports. The reaction from China was not a major surprise, but there is still some anxiousness from investors that a larger trade war will ensue.Ai??Continuing on the trade front, the tone surrounding NAFTA negotiations had improved markedly in recent weeks, but President Trump ratcheted up the rhetoric once again over the weekend with a tweet criticizing Mexico on its efforts to slow illegal immigration into the United States.

This weekai??i??s economic calendar is headlined by the March jobs report on Friday. Most market participants will again be more focused on the wage growth data within the report as it relates to further labor market tightening and general inflation pressures. Several Fed leaders are scheduled to speak this week, beginning with Minneapolis Fed President Neel Kashkari later today. Kashkari held a more dovish policy view for much of last year, and Fed Chair Jerome Powell will provide his economic outlook on Friday.

Jason Haley
Managing Director, Investment Management Group

Ai??To view ALM First’s full daily market commentary, please click here.Ai??