There is not much in the way of major macro or corporate data due this week, but markets will be on the alert for any hints from regional Federal Reserve Chiefs’ as to what the US central bank’s next moves will be.
US rate hikes
In general terms, leaving aside certain nuances, the short-term outlook in the US will be such that it will allow the Fed to raise interest rates, which will be taken as a positive symptom. But on the downside, this will mean higher funding costs. So issuers have already begun to anticípate these rate hikes which will make it difficult for them to match the debt issuance volumes of 2016.
Julius Baer Research | Against all odds the US Federal Reserve (Fed) continues to show a bias towards normalising rates. Comforted by stabilising financial conditions and a pickup in inflation, the Fed will try to guide market expectations towards additional rate hikes this year.