2 Min Market Summary: 27 Mar 2019

The U.S. Dollar Index increased 0.2% to 96.80. The 2-yr yield closed one basis point higher at 2.26%, while the 10-yr yield declined one basis point to 2.41%.

U.S. Conference Board’s Consumer Confidence Index decreased to 124.1 in March  (consensus 132.0). The March decline represents the fifth decrease over the past six months.The key takeaway from the report is that while consumers remain confident in the economy’s ability to expand, the level of expectations has moderated.

Sterling is holding onto its recent gains on reports that members of Parliament are starting to see the current deal as a better alternative to no deal or no Brexit. However the Democratic Unionist Party (DUP) likened May’s plan to a prison sentence and said they would rather see a one year delay than support her withdrawal agreement. Their first step will be to hold a series of indicative votes later today on alternatives to May’s deal. Sterling will remain in focus as a result and subject to wild intraday volatility.

The RBNZ this morning left Official Cash Rate (OCR) at 1.75% (expected). The central bank stated that given the weaker global economic outlook and reduced momentum in domestic spending, the more likely direction of their next OCR move is down. It cites, “Employment is near its maximum sustainable level. However, core consumer price inflation remains below our 2 percent target mid-point, necessitating continued supportive monetary policy.” Markets interpreted the statement, with its introduction of an easing bias, as a major dovish surprise. Kiwi dropped 1.52% to a low of 0.6807 as a result of the dovish statement.

The S&P 500 gained 0.72% on Tuesday, as an early uptick in U.S. Treasury yields and gains in most global equity markets helped foster some risk-on sentiment. The benchmark index declined from a gain of 1.1% at its high to a gain of 0.2% at its low before rallying in the last 30 minutes of action. All 11 S&P 500 sectors finished higher with gains ranging from 0.4% (consumer discretionary) to 1.5% (energy). Many energy stocks benefited from an increase in oil prices ($59.94/bbl, +$1.05, +1.8%).

Shares of Apple (AAPL 186.79, -1.95, -1.0%) were up as much as 2.2% but steadily declined throughout the day. The stock took a leg lower into negative territory after Bloomberg reported a U.S. trade judge recommended a ban on imports of some iPhone models due to Apple’s infringement on a Qualcomm (QCOM 58.00, +1.36, +2.4%) patent. The judge’s findings will be subject to a full review by the U.S. International Trade Commission.

In M&A news, Uber Technologies (UBER) announced it will acquire Middle East rival Careem Networks for $3.1 billion, consisting of $1.7 billion in convertible notes and $1.4 billion in cash. Uber plans to kick off its IPO next month.