Overnight Activity – Global Markets Tarry before Trump
Mar 1, 2017
Price action in global markets has been unimpressive and sideways ahead of tonight’s address from President Trump. Renewed hopes of infrastructure spending and fiscal reforms reignited U.S. assets yesterday (more below) but have had no clear impact abroad. Global investors took a more cautious wait-and-see approach in hopes President Trump will offer some micro-details on upcoming policy changes to support the macro-euphoria that has driven markets since the election. The yen outperformed other majors indicating a slight uneasiness as the Dollar weakened and gave back yesterday’s modest gains. As to the data, industrial production in Japan fell for the first time in six months as vehicle production, construction orders, and small business confidence all cooled. Retail sales there picked up along with housing starts. French inflation measures slowed and a first look at 4Q GDP indicated 1.2% YoY growth, up from 1.1% the quarter before. Ahead of the U.S. data, Treasury yields were lower with 2s down 0.2 bps to 1.19% and 10s down 1.1 bps to 2.35%.