Market participants will get a respite from Fed speak this week as we are now in the blackout period ahead of the March 18 FOMC meeting. In only hours after the Fed’s extraordinary inter-meeting 50 basis point rate cut last Tuesday, the market has aggressively brought forward the timeline for Fed easing and is pricing in by another 50-bps next Wednesday. Also, the majority of quality analysts are now projecting real GDP growth to be flat in the first half of the year — the slowest two-quarter growth rate since the crisis — with Q2 showing a contraction of 0.6% at an annualized rate.
I’m going to skip this week’s economic data analysis as it relatively meaningless when global markets are in meltdown mode since the coronavirus crisis arrived in the US. I’ve never seen such a muted reaction to such a healthy payroll number. That’s no great surprise; no one cared about payrolls with all eyes focused on the coronavirus, media reels.
Fixed income and equity markets are on…