Daily Market Color

Quiet trading ahead of holiday-shortened trading week

The key market trends for the week remained in place on Thursday, with international equities softer, the U.S. dollar stronger and U.S. rates drifting higher despite starting the morning slightly lower in yield.  The Fed governors’ recent comments regarding the expected need to normalize short rates upwards at least 2 times in 2016 seems to be resonating and moving market expectations closer to that reality with a market-implied 40% chance they hike once by next June and a 35% they have tightened twice by December.

Today’s US economic data was a bit of a mixed picture with weekly jobless claims coming in lower than expected at 265,000. This figure has now been below the critical 300,000 level for over a year – the longest such stretch in over 40 years.  On the flip side, Durable Goods fell in February – the 3rd such drop in the last 4 months, showing some weakness still persists in the manufacturing sector.

The US bond market closes today at 2pm Eastern and is closed all day Friday in honor of Good Friday.  No LIBOR settings are to be published on Good Friday or Easter Monday as well as they are both London business holidays.

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