The Day at a Glance | March 17 2021

The Top

· Republicans oppose increasing taxes to fund the infrastructure program.

· The S&P credit rating agency confirmed a AA+ rating with a stable perspective for American debt despite its high level of indebtedness.

· US 10-year Bond reaches 1.67% and analysts anticipate it reaching 2.25% this year.

· Markets focused on the FED`s monetary policy decision (12 pm).

Economic environment

Inflation in Europe accelerates to 0.9%. February`s final inflation figure set at 0.9%, in line with the previous month`s figure and at par with expectations. An increase in energy prices has been recorded. This information doesn’t modify expectations of the Central Bank`s monetary stance, through which it will begin to aggressively increase its asset purchasing program.

Federal Reserve makes monetary policy decision. Investors will focus their attention on the FED`s decision. A “dovish” stance is expected, without any change regarding the interest rate and the quantitative easing program. However, we will also see new forecasts for economic growth and inflation for 2021 and 2022, which will be revised upwards since economic data continues to point towards a strong recovery. It will be key to observe the “dot plot” in which it will be possibly to see if any of the FED`s members anticipates any increases in fedfund rates before 2023. Jerome Powell`s press conference will also be relevant; we expect him to make comments about the increase in long term Bond yields in order to detect any signs of a monetary policy change in terms of the control curve