International News (Issue 437) – 24 February 2017
The main news from offshore this week came in the release of the minutes from last month’s Federal Reserve meeting.
The minutes revealed an ongoing belief in the constructive recovery in US economic confidence, and signaled the March meeting as being a highly contentious one.
We have had some real strength in US economic data in recent months, so I would think it’s an increasing likelihood that the Fed raise rates a third time at the meeting on March 16th.
Late in the week in the US there was some negativity around the pace of implementation for Trump’s ambitious infrastructure plans, and this caused some profit-taking in US heavy industry names such as steel and construction. An article suggested that with such a heavy legislative workload, the Trump administration might defer the infrastructure plans until 2018.
In Europe this week government bond markets continued to worsen as fears heighten into the lead up to elections in Holland (March) and France (April). Spreads on bonds in France and Italy particularly have worsened significantly on concerns an anti-European candidate might assume power.
This is clearly something to watch for in the coming months.
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