A Critical Week For Markets Begins: Preview Of The Main Events

A pivotal, catalyst-filled week for global markets is now underway as investors brace for the second US interest rate hike in 2 quarter, a Dutch election, the expiration of the US debt ceiling deal, the imminent invoking of Article 50 by Theresa May, the first G20 finance ministers’ meeting of the Trump era and perhaps the disclosure of Trump’s proposed budget.
While the key events on the US economic docket will be retails sales and Wednesday’s CPI report, it is the slew of geopolitical and central bank-linked events and announcements which will have a profound impact on capital markets.
The most important, if mostly priced in, event is this FOMC announcement on Wednesday where the February employment report all but confirmed the Fed’s view that the US labor market is at or very close to full employment, giving them a bright green light to raise rates at the March meeting and continue its message of further normalization. Traders view a quarter-point Fed hike this week as a virtual certainty and will be watching the central bank’s policy decision for signals on what will come next. Futures indicate the market is moving toward policy makers’ December projection of three rate increases in 2017. It would be the first year with multiple Fed hikes since 2006.
Another key event is the Dutch general election on March whose results should be known on Thursday morning. Focus will be on the performance of the anti-EU, anti-immigration party PVV, and party leader Geert Wilders’ pledge to hold a referendum on EU membership. But current polls do not suggest that he is in a position to achieve an absolute majority, or form a governing coalition and take the country out of the EU. The current government will continue in office until a new coalition is
formed (that can take weeks, or months). Geert Wilders’ Freedom Party, which may be emerge as the biggest party from the elections, is unlikely
to join the new government. Whether the perceived populist trend is
shaken is the potential surprise.

This post was published at Zero Hedge on Mar 13, 2017.