After the FOMC (Federal Open Market Committee) declared that it raised the key interest rate for the first time in 2017, the market reacted calmly.
On March 15, 2017, the Fed announced its much-awaited interest rate hike—the first increase this year. It’s the third rate hike in the past decade.
The Fed’s more hawkish tone is one of the major reasons behind the rising expectations for the financial sector.
The ten-year US Treasury yield was close to its one-month high of 2.6% on March 13, 2017, amid expectations of a rise in the Fed’s key interest rate on March 15, 2017.
Investors generally look for short-term duration bonds in the midst of a rising interest rate scenario.
Fed chair Janet Yellen recently said at the Executives’ Club of Chicago that the economy is showing strength. The Fed is sounding more hawkish in regards to a March rate hike.
A short-term corporate bond offers investors with a lower risk profile to invest in fixed income securities with intermediate or short-term maturities.
An interest rate hedged ETF usually takes a short position in the interest rate swaps. It makes the duration of the portfolio zero.
Senior loans offer floating rate coupons and have low interest rate sensitivity. They provide the perfect hedge for rising interest rate environments.
The 30-year Treasury yield was close to its month high as of March 10, 2017, at 3.20% in anticipation of an interest rate hike by the Fed on March 15, 2017.
Germany’s improved price competitiveness and its innovations in the manufacturing sectors positively impacted its exports in 2016.
Germany’s unemployment rate was lower at 3.8% in December 2016, as compared to the pre-crisis level of 11.3% in 2003.
Germany’s expected rise in inflation is concerning as the cost of borrowing has increased across Europe—and this amid all the political uncertainty.
Consumer confidence in Germany rose more than expected in February 2017, reflecting the recent boost in its market performance
The German Stock Index DAX 30 (DAX-INDEX) surged over its 12,000 historical mark in March and was trading at 11,941 on March 9, 2017.
In 2016, the budget deficit rose to $587.0 million, a 30.0% rise from 2015.
Japan leads the nations with its rising debt-to-GDP ratio. The United States is in seventh place.
The gross federal debt at the end of 2016 was $19.5 trillion. It’s estimated at more than $20.0 trillion for 2017.
The US Conference Board Consumer Confidence Index improved in February 2017. It was at 114.8 compared to 111.6 in January 2017.
The most important indicators for this week are services PMIs.