Financial Markets Daily Report 18 March 2021
During yesterday's meeting, the Federal Reserve sharply upgraded its forecasts for growth in the U.S. and signalled that interest rates would remain unchanged until at least 2024 and that it would continue to buy bonds at a pace of $120 billion per month until it made "substantial further progress" towards its goals.
- During yesterday's meeting, the Federal Reserve sharply upgraded its forecasts for growth in the U.S. and signalled that interest rates would remain unchanged until at least 2024 and that it would continue to buy bonds at a pace of $120 billion per month until it made "substantial further progress" towards its goals.
- The S&P 500 rose 0.3% and 10-year U.S. Treasury yields were up by 2 basis points on the day, although they came down from a high of almost 1.69% before the Fed's announcement. The dollar dropped with the possibility of higher inflation, with EUR/USD rising 0.6%.
- The recent U.S. bond sell-off has continued to affect European sovereign bond markets, with 10-year sovereign yields rising sharply (up 7bp in Italy, 6bp in Spain and Portugal, and 5bp in France and Germany).
- In oil markets, the price of a barrel of Brent dropped 0.6% to $68.