Trading Activity Expected to Pick Up as Q2 Kicks Off in Earnest

Foreign stock and bond markets opened the week and the quarter higher after a rollercoaster of a first quarter.  Global bond markets rallied strongly in Q1 as continued international monetary stimulus and a dovish Fed stance provided a supportive backdrop for bonds. International stock markets stemmed the downward move with a bounce higher in the latter half of the quarter, but still finished Q1 lower by an average of -5%. US stocks recovered sharply from the lows of February, and managed to eke out small gains for the quarter.  On the commodity front, most energy and metals moved higher in Q1, while agricultural commodities were mostly lower to start the year.

This week market experts anticipate a healthy pick up in corporate bond issuance and an increase in market trading volumes generally, as we get past the height of the Easter/spring break season. After last Friday’s strong payroll data, the U.S. economic data is starting this week on a softer note, as Factory Orders and Durable Goods Orders for February were down 1.7% and 3.0% respectively – albeit near analysts’ predictions.  For the balance of the week we will be watching for data on Trade Balance, Purchasing Manager surveys and weekly jobless claims, release of March FOMC Minutes along with another public speaking appearance from Fed Chair Yellen on Thursday in New York.

All three major US stock indexes are opening slightly lower this morning. The U.S. Dollar is opening flat against the Euro and weaker against the Yen and Pound, while Treasury yields and swap rates are up 1 basis point across most major maturities.