Next rate rise by the Fed, the main focus on Tuesday

On Tuesday the attention turned to when the next rate rise may come. The June Fed policy meeting is seen offering a 38.5% chance of another 25bp hike. Unless Friday’s monthly US jobs report is shockingly poor, then a move in several days’ time by chair Janet Yellen and colleagues is considered a given.

US 10-year Treasury yields were up 1bp at 2.51% though equivalent maturity German Bunds were 3bp softer at 0.31% after a report confirmed economic growth in the eurozone was 0.4% in the fourth quarter of 2016.

After a mild pullback in recent sessions, many major bourses were more stoic on Tuesday. The S&P 500, which closed on March 1 at a record 2,396 as hopes revived that President Trump’s policies would add extra propulsion to US growth, opened the session down just 0.2% at 2,371. In Europe the Stoxx 600 was off less than 0.3% and London’s FTSE 100 was also flat as miners recovered some of the previous day’s retreat.

Earlier on in the day Japan’s Topix index was also becalmed as Nintendo was a bright spot, with its shares climbing 2% for a third straight day of gains following Friday’s launch of the new Switch console.

In Sydney, Australia’s S&P/ASX 200 index rose 0.3%, led by gains for the healthcare sector. Hong Kong’s Hang Seng index gained 0.4%, buoyed by gains for consumer staples and information technology stocks, while in mainland China the Shanghai Composite index added 0.3%.

Oil prices continue to fluctuate within the narrow channel they have inhabited for much of the year as Opec production cuts are counteracted by expectations of increasing US-based output.

Brent crude, the international benchmark, was at$56.57 a barrel while Gold was down 0.5% to $1,219 an ounce. The precious metal hit a near fourmonth high of $1,264 just six sessions ago but has drifted lower as US rate rise expectations have jumped.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.