Daily Market Color March 20, 2017Treasurys Advance Following Fed Rhetoric The plethora of speeches from Federal Reserve members scheduled for this week kicked off with Chicago Fed President Charles Evans (voter), whose projection for rate hikes in 2017 matched the pace communicated in the FOMC statement last week. Evans committed to an open approach, one that closely tracks the advancement of inflation in the remaining months of the year as he stated that “As I gain more confidence in the outlook I could support three total this year. If inflation began to pick up, that would certainly solidify (that expectation). It could be three, it could be two, it could be four if things really pick up.” When probed about his expectation for economic growth to jump to four percent next year, Evans’ response was lukewarm, explaining that while the level could be attained “in any given year,” the already strong market conditions make such growth a challenge. Reacting in part to the less hawkish than expected rhetoric, US Treasury prices have gained, with Treasury yields/swap rates falling 1-4 bps on the day as the yield on the 10-year note approaches 2.46% (-3.5 bps). Trading in US equity markets has been relatively muted throughout the session with the S&P 500 generating the largest movement, down 0.2%. The US dollar edged lower, falling 0.1% against a basket of major currencies. In commodities, the recent market view towards new anticipated US output plus skepticism over the projected OPEC cuts lingers on, as WTI crude oil shed an additional 1% on the day to $48.25/barrel. Abroad, finance ministers and central bank governors of the 20 largest economies met in Germany this weekend, marking the Trump administration’s first participation in the G20. Of particular importance to markets was the group’s update to global trade policies surrounding free trade. As recently as July 2016, the G20 had pledged to “resist all forms of protectionism”, however the statement made this weekend at the conclusion of the meeting was lacking a free-trade assurance and only made a brief reference to working together in strengthening the overall trade relationship amongst the nations. The undefined stance on protectionism demonstrates the inherent complexity for global trade moving forward as the United States begins to define its trade policies. Among the countries who stand to be most greatly impacted by a shift in traditional US trade policy is Germany, whose reliance on exports substantial, accounting for roughly 45% of its GDP. Other news abroad includes the setting of the date for the official triggering of Article 50 in the U.K., kicking off the two-year EU exit timeline, which appears set to take place next Wednesday, March 29th.