Daily Market Pulse

Fed is likely to be the week’s main focus across global central banks


Last week, once again, the U.S. bond markets continued to occupy center stage in the stocks and currencies markets, with the 10-year yields surging from around 1.55% to new cycle highs just about the 1.64% mark. Moves of this magnitude are large enough to spook investors in riskier assets. Looking ahead, the Fed is likely to be the week’s main focus across global central banks. The Fed is almost certain to keep interest rates near zero and pledge to continue its asset purchases at the current pace. Market players will be waiting for a raft of economic data, including retail sales, industrial production, housing starts, and weekly jobless claims over the week. The upcoming data is expected to gauge the strength of the recovery from the pandemic as more local governments drop restrictions on business activity and vaccines are deployed rapidly. Key figures coming up:

  • On Monday (03/15): Current Account (Q4) | Empire State Manufacturing Survey (Mar)
  • On Tuesday (03/16): Retail Sales (Feb) | Import and Export prices (Feb) | Industrial Production (Feb) | Business Inventories (Jan) | NAHB Housing Market (Mar)
  • On Wednesday (03/17): Housing Starts and Building Permits (Feb) | FOMC Monetary Policy Meeting
  • On Thursday (03/18): Weekly Jobless Claims


European shares finished a rather strong week while the common currency struggled to hold the current level. The exiting from the lockdown has been uneven across the bloc, while Spain and Germany are reopening their economy gradually, Italy and Portugal are heading into another full lockdown. It is a busier week ahead, with ZEW Survey, which measures expectations concerning the economy, inflation rates, interest rates, stock markets, and exchange rates, eagerly eyed on Tuesday. Inflation and trade balance data are also expected over the course of this week. Nonetheless, European Central Bank (ECB) President Christine Lagarde will give a speech in Brussels on Thursday, a week after the ECB pledged to ramp up buying government debt in coming months, in an attempt to curb the rising bond yields that threaten to derail the euro area’s economic recovery. If Christine Lagarde's rhetoric suggests possible developments in the future monetary policy, this may have a short-term positive effect on the euro. Key figures coming up:

  • On Tuesday (03/16): Germany and Eurozone ZEW Survey (Mar)
  • On Wednesday (03/17): Eurozone Consumer Price Inflation (Feb)
  • On Thursday (03/18): Eurozone Trade Balance (Feb) | Eurozone Labour Costs (Q4)
  • On Friday (03/19): Germany Producer Prices (Feb)


The Sterling continued to outperform its peers last week, with the Pound holding at the strongest level since April 2018. Progress toward fewer Covid-19 cases and a rapid inoculation program are providing important support to the GBP. This week starts with the Bank of England (BoE) Monetary Policy Meeting on Tuesday, when the BoE is expected to keep its current policies in place, albeit there is somewhat greater uncertainty over the growth outlook for the coming year. It is a quiet week on the economic front, with March’s Consumer Confidence also on Thursday and the Public Sector Borrowing numbers wrapping up the week. Key figures coming up:

  • On Thursday (03/18): Monetary Policy Meeting | BoE Meeting Minutes | GfK Consumer Confidence (Mar)
  • On Friday (03/19): Public Sector Borrowing (Feb)


Although the Japanese Yen printed some gains over the last week, the currency continued to struggle against the U.S. dollar. The confluence of rising U.S. yields, weak economic data, and a disappointing economic outlook are penalizing the Japanese Yen. The upcoming week brings the Bank of Japan (BoJ) Policy Meeting on Friday. Markets have been speculating that recent bond yield rise could cause the BoJ to tweak its asset purchase program, as well as starting a discussion around the feasibility of reducing the -0.1% policy interest rate. Apart from that, inflation, industrial production, and trade balance are also expected to shed some light on the economic recovery. Key figures coming up:

  • On Monday (03/15): Machinery Orders (Jan-Feb) | Tertiary Index (Jan)
  • On Tuesday (03/16): Industrial Production (Jan)
  • On Wednesday (03/17): Trade Balance (Feb)
  • On Thursday (03/18): Consumer Price Inflation (Feb)
  • On Friday (03/19):  Bank of Japan Interest Rate Decision and Press Conference


The week kicks off with February’s Existing Home Sales on Monday. On the inflation front, the increase in fuel and energy prices will be the big story when figures are released for the February Consumer Price Inflation on Tuesday. Prices for crude oil have been rising this year and the Canadian government ended the 40-day discount on electricity price that began on January 1st. This week is also expected to see weak retail sales figures for January during lockdowns. Investors and traders will also keep an eye on the future oil prices after a raft of economic data from China added to signs of recovery from the pandemic just as the OPEC+ alliance presses on with output curbs to drain global inventories. Key figures coming up:

  • On Monday (03/15): Existing Home Sales (Feb)
  • On Wednesday (03/17): Consumer Price Inflation (Feb)
  • On Thursday (03/18): Weekly ADP Employment Change
  • On Friday (03/19): Retail Sales (Jan)


Despite recovering some ground over the last week, the Mexican peso has been performing poorly against the greenback this first quarter, due to rising political risk, the worsening of the Covid-19 pandemic, and the slow vaccination rollout. Market participants are already pricing in the near-term economic outlook, although it is challenging, due to the pandemic, economic activity is likely to improve consistently from Q2, thanks to improving external conditions and the strength of the U.S. industrial sector. The fresh U.S. stimulus package will also add to the good news. On the economic front, there is no relevant data to be released this week. Key figures coming up:

  • On Monday (03/15): Benito Juarez's Birthday Memorial – National Holiday


All material economic data from the first two months of the year are due on Monday. January/February industrial production, retail sales, investment, house price, and unemployment data are set to show roaring growth in China. Although figures are largely distorted by comparisons from a year ago when the economy was in lockdown, the fresh data should provide strong fundamentals to the Chinese yuan and further heat up commodity prices. Key figures coming up:

  • On Monday (03/15): Industrial Production (Jan-Feb) | Retail Sales (Jan-Feb) | Fixed-asset Investment (Jan-Feb) | House Prices (Feb) | Unemployment (Jan-Feb)


Last week was marked by political turmoil which brought volatility into the FX market. Firstly, the Federal Supreme Court overturned the criminal convictions of Brazil’s former president Luiz Inácio Lula da Silva, allowing him to run in the 2022 elections. Secondly, the Lower House approved the “Emergency PEC” last Friday, which will provide a new round of direct payments to low-income families among another economic stimulus. It is a quiet week ahead, with the Brazilian Central Bank interest rate decision on Wednesday driving the market’s attention. Considering the inflation expectations and the Real devaluation is expected a rise from the current 2% to 2.25/2.50%. Key figures coming up:

  • On Monday (03/15): IBC-Br Economic Activity
  • On Wednesday (03/17): Monetary Policy Meeting | Foreign Exchange Flows

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