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Investment Bank

Investment Bank

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It's complicated

  • After a strong morning session, US markets fell in the afternoon as the vote on the healthcare bill was delayed. Bloomberg reports the vote may now take place on Friday. In addition to the ongoing wrangling over the bill, there are two FOMC speeches, US durable goods, and Euro area ‘flash’ PMIs.

  • If the healthcare bill does not get past the house, we believe a period of turmoil will be followed by a ‘doubling down’ of legislative efforts to cut taxes. Concern that the GOP domestic policy agenda might dissolve would increase pressure to achieve a major domestic policy goal before the mid-term elections. The challenge of making progress on healthcare has laid bare the legislative challenges facing the administration, and consequently attenuated and delayed expectations for policy action, compared to just after the election.

  • Chicago Fed President Evans speaks, but St. Louis Fed President Bullard is the one to watch. We believe Bullard is the lone ‘dot’ that expects no further hikes this year or next.

  • We expect US durable goods orders to rise 1.5% m/m in February, buoyed by some bounce back in motor vehicle production on the month. Recent readings on manufacturing sentiment show robust strength in the manufacturing sector and we expect that to begin to boost hard data.

  • Similarly, the ‘soft data’ readings on the European manufacturing also look strong, though they should moderate somewhat in today’s euro area flash PMI reading. We look for the composite indicator to inch up again in March to 56.2. This should be driven by further rise in services confidence (to 56.0), while manufacturing should moderate somewhat to 55.1.

  • We expect the CBR to keep policy rates on hold today, though policymakers could use the accompanying statement and press-conference to indicate when the easing cycle may be restarted. Market expectations of a cut at this meeting are ahead of themselves, in our view.  
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Barclays Live app for iPad and Android tablets

The Barclays Live app for tablets helps institutional clients to cut through the information deluge. Interactive tiles allow clients to view the content they want, store it for offline use, annotate it on the go, and more. It's Barclays Live, now tailored for you on iPad and Android tablets.

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