A week facing big central bank signals

Published on 18 March 2024

Valérie Noël, head of trading at Syz Group

Valérie Noël, head of trading at Syz Group, discusses the potential effects of central bank meetings in the US, UK, Switzerland and Japan this week, as macro triggers continue to be a major driver of directionality and volatility.

In the US the Federal Reserve’s current policy could trigger a relief rally In equities and rates. However, as always, Jay Powell’s comments will be very impactful as well.

Noel discusses the likelihood of rate changes in other markets, the importance of communication by governors, and looking ahead, the effect of the shift to T+1 settlement, followed by an MSCI rebalancing a few days later on overseas investors buying US assets.

North America: Last week’s review and outlook this week’s markets

  • Equities volumes dropped week on week but high activity for Friday due to Triple Witch. Bid-ask spreads range average for the year to date.
  • US IG volumes saw little change week on week but remain elevated. IG has had a positive streak for liquidity since January.
  • Data: Canada’s Inflation Rate on March 19 and the US Fed Interest Rate decision on 20 March.
  • Primary markets: 12 IPOs expected to price at a combined US$1.7 billion e.g. Reddit and ASTERA.

Europe: Last week’s review and outlook this week’s markets

  • Equities volumes fell and were below average levels for 2024 but bid-ask spreads tightened week on week.
  • Euro IG volumes made a comeback from the previous week’s lows and continues to see positive signs for liquidity since January.
  • Data: EU’s inflation Rate on 11 March, the UK’s Inflation Rate on Wednesday and the UK BoE Interest Rate decision.
  • Primary markets: One IPO, from Galdera Group is expected to price on the Swiss Exchange for US$2.2 billion.