• The main focus in the markets remains around Brexit developments and its potential impact on financial markets, which remained contained in UK assets, so far. Yesterday, the UK Parliament voted to take a no-deal scenario off the table, allowing the GBP to appreciate further. Following this, a vote to extend Article 50 will take place later today while May’s new strategy is to hold a third vote on her Brexit plan for next week. Against this backdrop, GBP volatility is expected to remain as May continues to face a challenging context for her plan, with the March 29th Brexit deadline fast approaching.
  • Although market sentiments have being calm recently, trade fears returned to the forefront after the US announced that the highly expected Trump-Xi Summit will be delayed beyond March. Despite this, US equity indices were broadly flat today and the upward trend on European equity markets remained. In Asia, Chinese equity indices fell amid the release of disappointing industrial production data and the uncertainty in China-US negotiations.
  • Sovereign core yields slightly rose: the US Treasury 10Y yield approached the 2.64% level ahead of next week’s Fed meeting. In this vein, the German 10Y Bund yield increased despite both the slightly lower-than-expected German final inflation data and the cut in German economic growth forecast for 2019 by Ifo institute. Peripheral risk premia narrowed today leading by Italy.
  • The USD recovered some ground today against its main peers. Meanwhile most EM currencies depreciated with the main exception of the ARS ahead of today’s release of Argentina’s CPI. Others Latam currencies depreciated despite stable crude prices: the latest report showed that OPEC cut its forecast for global oil demand in 2019, signaling potential further oil supply cuts.

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This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) Research Department on behalf of itself and its affiliated companies (each a BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. The information, opinions, estimates and forecasts contained herein refer to that specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.

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