Morning Minutes

Treasury Yields and Inflation Continue To Climb




Yesterday’s comments from Fed Chair Powell on inflation and interest rates continue to reverberate through markets, particularly on the fixed income side. Yesterday’ Powell indicated that the Fed intends to get inflation under control and hinted that the US central bank could bring in larger rate hikes if needed and that it may start shrinking its balance sheet soon. The prospect of an even more hawkish Fed has increased the tailwind behind the US 10-year treasury note yield which is trading between 2.30% and 2.35% this morning.

Inflation pressures continue to build keeping central bankers’ feet to the fire. Canadian Industrial Product Prices (3.1% vs street 1.2%) and Raw Material prices (6.0% vs street -0.6%) soared far more than expected in February.   

US indices fell on the Powell comments yesterday and finished flat to down 0.6%. This morning, US index futures are up 0.1% to 0.4% as stocks regain their footing. Overseas markets were higher overnight and into this morning, including gains of 3.1% for the Hang Seng, 1.5% for the Nikkei, 0.7% for the Dax and 0.4% for the FTSE.

In currency markets today, cryptos are bouncing back with Bitcoin up 4.6% and Ethereum up 4.0%. Defensive havens are sliding with the Japanese Yen down 1.0% and gold down 0.1%. On the other hand, the Pound is up 0.4%. Commodity action is mixed with copper up 0.4% and WTI crude oil down 0.4%.

In corporate news, Nike posted a positive earnings report ($0.87 vs street $0.71) and is up 5.6% in premarket trading. Canadian Pacific and the Teamsters union have agreed to binding arbitration to their labour dispute and end a 2-day strike that had snarled supply lines.

New Video: SIA Wealth March Webinar Replay

A replay of the SIA Wealth Market Outlook Webinar with Portfolio Managers Paul Vendrinsky and Kyle Wilson, plus Colin Cieszynski, Chief Market Strategist which discussed risk management in uncertain markets, recent changes to cash allocations in SIA Wealth managed portfolios, and answered questions from advisors and media is now available.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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