Stocks Gain, Yields Pare Rise After Fed Stands Pat

Stocks rose to record highs and yields on longer-maturity US debt retreated from more than one-year highs after the Federal Reserve continued to project near-zero interest rates at least through 2023 despite rising inflation concerns.The S&P 500 rose by 0.29% to 3,974.12 while Dow Jones was up 189.42 points (0.58%) to 33,015.37.

Powell Holds Dovish Line as Fed Signals Zero Rates Through 2023

Fed’s Chair Jerome Powell and his colleagues continued to project near-zero interest rates at least through 2023 despite upgrading their US economic outlook and the mounting inflation worries in financial markets. The decision, which came on a volatile day for investors with Treasury yields surging ahead of the announcement, masked a growing number of officials who saw liftoff before then.

US Housing Starts Stumble as Winter Weather Impedes Momentum

US housing starts retreated in February by more than forecast as harsh winter weather impeded activity, while still-elevated construction permits and rising backlogs suggest momentum in homebuilding will resume in coming months. Residential starts dropped 10.3% last month to a 1.42 million annualized rate, the slowest since August, according to government data released.

Canadian Inflation Inches Higher to 1.1% on Rising Gas Prices

Canadian inflation crept up in February to the highest since the start of the pandemic on rising gasoline prices. Annual inflation quickened to 1.1% last month from 1% in January, Statistics Canada reported. On a monthly basis, prices rose 0.5% versus economist forecasts for 0.7%. Core inflation -- seen as a better measure of underlying price pressures -- remained unchanged at 1.73% in February.

UK to Cut Industrial Pollution by Two-thirds in 15 Years

The UK government revealed plans to slash the amount of carbon dioxide spewed out by factories and other industrial processes by two-thirds within the next 15 years. The Industrial Decarbonization Strategy is part of the UK’s ambition to effectively eliminate greenhouse gas emissions by 2050. The Department for Business, Energy and Industrial Strategy allocated more than 1 billion pounds ($1.4 billion) to projects that can help drive down emissions in hospitals and schools, as well as factories.

Philippines Central Bank Sees Limited Spillover From Inflation

The Philippine central bank said it sees limited spillover from faster consumer-price gains that have been driven largely by food and oil costs, hinting that monetary policy will remain loose for months. Inflation, which hit its fastest pace since December 2018 last month, will remain within the 2%-4% target range this year and next, the central bank said.

New Zealand Economy Contracts, Denting V-shaped Recovery

New Zealand’s economy contracted in the final three months of 2020, denting its Vshaped recovery from a pandemic-induced recession. Gross domestic product fell 1.0% from the third quarter, when it expanded a revised 13.9%, Statistics New Zealand said in Wellington. From a year earlier, the economy shrank 0.9% against expectations of 0.5% growth.

Oil Dips With US Crude Supplies Topping Half a Billion Barrels

Oil fell to the lowest in a week after U.S. crude stockpiles topped half a billion barrels and the International Energy Agency said global supplies are plentiful. Brent crude for May settlement fell US$0.39 to US$68.00 per barrel.

Source: Affin Hwang Research - 18 Mar 2021