Daily Market Color March 11, 2020Rates Rise After President Trump Announces Economic Stimulus to Curb Virus Impacts President Trump announced a stimulus plan to curb coronavirus impacts on the economy. Confirmed virus cases in the US have passed 1,000 and the CDC has cautioned that the containment window has passed for certain parts. President Trump has pushed to suspend payroll taxes with other lawmakers preferring targeted measures to help hourly workers and the travel industry. Airlines in the US are still cutting flights both domestically and internationally. VP Pence confirmed that an additional 4 million virus tests will be dispatched across the nation by the end of this week in addition to the 1 million already available. Rates rose across the curve in response to the announcements. The current 10-year Treasury yield is 0.705%. The BOE cut its benchmark rate by 50 bps to 0.25%. The emergency move was announced this morning and is the first since 2016 by the UK’s central bank. BOE Governor Mark Carney described the move as a “big, big package,” as it encourages banks to lend upwards of £100 billion to small business and cut capital costs freeing up an additional £190 billion. Andrew Bailey, Carney’s successor, stressed that this drop in rates will be closely monitored and is subject to change once the impacts of the virus are more certain. The ECB is set to announce further measures in addition to its policy decision tomorrow. The pound only slightly weakened as the rate cut had been priced in. Day ahead. The US CPI for February was released this morning – figures slightly higher than investor expectations at 2.4%. Treasury Secretary Steven Mnuchin will discuss the White House 2021 budget.
