Strong European data failed to excite markets – the exception being equities – as the upcoming French Presidential elections take centre stage. Betting markets now ascribe Eurosceptic Le Pen a 34.2% chance of winning, while a poll by Elable for L’Express magazine overnight puts her within striking distance in a run-off with Fillion with 44% of the vote – inspiration for today’s title “Livin’ on a Prayer” by Bon Jovi.
My colleague Rodrigo Catril warned yesterday of the possibility of a US Fed March rate hike – what he termed the Ides of March. That argument gained further currency overnight with the US CPI and core‑Retail Sales printing double the market consensus.
The Trump-trade was reignited overnight on the back of the President flagging an impending “phenomenal” tax announcement.
The major event overnight was the US FOMC meeting where rates were left on hold as expected. There were very few changes to the post meeting statement with the Fed playing a straight bat. Markets were somewhat disappointed with Treasury yields and the US dollar reversing earlier gains that had occurred following stronger than expected US economic data.