{"id":4172,"date":"2021-03-24T08:00:05","date_gmt":"2021-03-24T08:00:05","guid":{"rendered":"https:\/\/sarasinandpartners.com\/za\/?p=4172"},"modified":"2025-02-05T12:13:49","modified_gmt":"2025-02-05T12:13:49","slug":"the-week-in-markets-24-march-2021","status":"publish","type":"post","link":"https:\/\/sarasinandpartners.com\/za\/think\/the-week-in-markets-24-march-2021\/","title":{"rendered":"The week in markets – 24 March 2021"},"content":{"rendered":"

Welcome to your weekly macroeconomic round-up, where we spotlight a few of the most significant events in the last week.<\/h3>\n

Fed sticks to its guns<\/strong><\/h3>\n

This week\u2019s Federal Open Market Committee meeting had a dovish flavour, with Chair Powell stating it was too early to discuss the tapering of QE Treasury purchases, and the majority of members predicting no rate hike in the 2021-23 forecast period. This is despite expectations that the US economy will return to full employment and core personal consumption expenditures inflation will (moderately) exceed 2% over the same period. Forecast GDP for 2021 was revised up materially, to 6.5% from a projection last December of 4.2%.<\/p>\n

Bank of England and Bank of Japan meetings pass uneventfully, bond yields continue to head higher <\/strong><\/h3>\n

The Bank of England (BOE) Monetary Policy Committee did not signal any policy shift and continued to characterise the recent rise in bond yields as consistent with the improved economic outlook (vaccine rollout, passage of US fiscal stimulus package, for example). The BOE thus remains a relatively hawkish outlier among major central banks. The Bank of Japan announced it will cease purchases of equity ETFs and also slightly increased the ceiling on 10-year Japanese government bonds yields under its Yield Curve Control programme, from 0.20% to 0.25%.<\/p>\n

US consumer outlook very healthy<\/strong><\/h3>\n

US retail sales fell 3.0% month-on-month in February (versus an expected -0.5%), but the January figure was revised up to 7.6% month-on-month from 5.3%. Overall the trend in US consumer spending is very robust, buoyed by fiscal stimulus. February industrial production was much weaker than expected, as it declined 2.2% in February, with manufacturing production down 3.1%, due to an outsized negative impact from adverse weather conditions.<\/p>\n

Markets <\/strong><\/h3>\n

Government bond yields continue to head higher, particularly in the wake of the Fed meeting, with US 10-year Treasury yields briefly touching a 14-month high of 1.75% and gilts topping 0.90%. This caused equities to come under pressure, led by tech, and erased gains made earlier in the week to leave overall levels little changed compared to the end of the previous week.<\/p>\n

The US dollar\u2019s performance was mixed, making modest gains within the G10 currencies but ceding ground to high-yielding emerging market currencies. Crude oil registered its biggest one-week decline since last April, with the Brent marker dropping by around $6 to $63\/bbl.<\/p>\n

Look out for next week\u2019s update, where we\u2019ll be focusing on March PMIs around the globe and UK retail sales data.<\/strong><\/p>\n

\n

All details in this article are provided for information purposes only and should not be misinterpreted as investment advice or taxation advice.<\/p>\n

Where the data in this article comes partially from third party sources the accuracy, completeness or correctness of the information contained in this publication is not guaranteed, and third party data is provided without any warranties of any kind.\u00a0 Sarasin & Partners LLP shall have no liability in connection with third party data.<\/p>\n

\u00a9 2021 Sarasin & Partners LLP \u2013 all rights reserved.\u00a0 This article can only be distributed or reproduced with permission from Sarasin & Partners LLP. Please contact marketing@sarasin.co.uk.<\/p>\n","protected":false},"excerpt":{"rendered":"

Welcome to your weekly macroeconomic round-up, where we spotlight a few of the most significant events in the last week. Fed sticks to its guns This week\u2019s Federal Open Market Committee meeting had a dovish flavour, with Chair Powell stating it was too early to discuss the tapering of QE Treasury purchases, and the majority...<\/p>\n","protected":false},"author":41,"featured_media":10768,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"coauthors":[79],"class_list":["post-4172","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"\nThe week in markets - 24 March 2021 - Sarasin & Partners South Africa<\/title>\n<meta name=\"description\" content=\"Bank of England and Bank of Japan meetings pass uneventfully, bond yields continue to head higher\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sarasinandpartners.com\/za\/think\/the-week-in-markets-24-march-2021\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The week in markets - 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