Daily Market Color March 18, 2016Global Stock Markets Extend Gains to Close Out Busy Week for Central Banks US stocks extended their weekly gains while Treasuries rallied across the curve as markets continued to react favorably to dovish central bank policy. Both Norway and Indonesia cut borrowing costs yesterday, adding to the recent wave of loose monetary policy from central banks. Crude prices pared some of this week’s advances, but remained on track for a fifth consecutive week of gains. Oil prices have now jumped 50% from the 12-year lows reached in early February, as the dollar has weakened and speculation picked up that an agreement to freeze production could be reached. A mix of OPEC and non-OPEC producers will meet in Qatar on April 17th to continue to discuss the first global oil supply deal in 15 years. Meanwhile, US crude inventories remain at record highs, indicating supply/demand fundamentals have a ways to go before normalizing. Today the Intercontinental Exchange (ICE), who surveys bank participants and is the organization now responsible for reporting the daily LIBOR fixings, put out a “Roadmap for the evolution of ICE LIBOR”. The index has been under scrutiny since several of the largest banks were first accused of manipulating the daily LIBOR settings around the time of the financial crisis. ICE surveyed over 200 market participants including central banks and regulators to get feedback on possible reforms to reduce the chances of manipulation and instill confidence in the way the index is determined. ICE is planning to shift the calculation away from bank employee-provided estimates and more towards actual transactions taking place in the market. ICE hopes to eventually develop an algorithm that could calculate the index without human estimates. The new methodology is not expected to have any material impact on the current levels of LIBOR, but will hopefully provide less chance of future doubts about the veracity of the levels provided. All three major US stock index are trading positive once again, with the Dow leading the way, up nearly 0.50%. The dollar is slightly firmer against most major currencies, while most commodities are lower today. Treasury yields and swap rates are 2 to 5 bps lower across the curve.