Daily Agenda: The Week Ahead, March 14 – 19, 2016

Presidential primary elections and a Fed announcement dominate U.S. calendar; Draghi faces new inflation data as expanded easing gets underway.


If there has been a constant theme for markets in recent weeks, it has been one of pessimism tempered by rebounding prices across multiple asset classes. The seventh anniversary of the current U.S. bull market received little fanfare this past week, as concerns over Federal Reserve policy signals from the upcoming meeting on Tuesday and Wednesday and macro risk factors cast a long shadow. The European Central Bank’s move to cut key rates and buy more bonds did eventually cheer markets, however, after initial economist and investor apathy over the impact of negative rates and other extreme policy maneuvers.

Monday, March 14: India’s Ministry of Commerce releases February export data. January data confirmed the 14th consecutive year-over-year decline in exports and few economists expect an improvement for the following month. While the trade deficit has been kept in check on the back of low fuel import costs, slowing external demand remains a worry for Indian leaders, some of whom believe the rupee is overvalued.

Tuesday, March 15: The turning point in the race for the Republican nomination may arrive on Tuesday as Florida Senator Marc Rubio and Ohio Governor John Kasich attempt to secure the delegates from their home states in the face of real estate developer Donald Trump’s campaign steamroller. On Friday Rubio warned his supporters that they faced a “tough fight” against Trump but reiterated his belief that he will prevail in the Sunshine State.

Wednesday, March 16: After stronger-than-anticipated employment data for February, the upcoming Federal Open Market Committee announcement is the subject of much debate among economists and strategists. While few expect that the Federal Reserve will move rates this meeting, the expectations that events abroad would moderate the Fed’s telegraphed rate hike projections have dissipated in the face of improving fundamentals. If the FOMC concludes that the U.S. economy is nearly balanced, markets will likely react to price in a June rate hike.

Thursday, March 17: In what is likely to be yet another reminder to ECB president Mario Draghi of the work he has cut out for him, Eurostat publishes February euro zone consumer inflation data. After an initially negative reaction to the European Central Bank announcement this past Thursday, European financial markets rebounded Friday after investors took stock of the move to reduce rates and increase easing with the inclusion of corporate bonds in the asset purchase mix.

Friday, March 18: China’s National Bureau of Statistics releases February urban home price indexes. Moves by the People’s Bank of China to liberalize regulations on second mortgages combined with adjustments to deposit rates helped the Chinese residential real estate market find its feet in the final quarter of 2015. Despite the rebound, readings over recent months have continued to exhibit regional divergence.


Saturday, March 19: It’s fireworks all around the world this coming weekend. The National Pyrotechnic Festival will draw more than 100,000 revelers to the Mexico City suburb of Tultepec — the historical center of the nation’s fireworks industry. More adventurous party goers can head to China to attend the Da Shuhua Tree Flower festival in the village of Nuanquan, about 80 miles outside of Beijing, which features experts clad only in traditional sheepskin and straw protective garments fling molten iron against the city walls to create an unforgettable explosion of sparks. The festival draws its name from the distinctive flower-like iron adornments that remain on the walls the next morning.