Global Market Updates
U.S. futures are hugging the flatline as traders brushed off jitters related to the Brussels attacks and appetite for equities waned ahead of the long Easter weekend. “Generally, the impact of terror attacks has become less and less dramatic after 9/11,” said Bernard Aw, market strategist at IG in Singapore. With few major economic and corporate releases on this week’s agenda, investors expect stocks to remain near their highest levels of 2016, following a five-week rally that helped erase steep losses at the start of the year.
Najim Laachraoui, the third bombing suspect who fled the Brussels airport on Tuesday, has been caught by Belgian police, but brothers Khalid and Brahim el-Bakraoui, are thought to have blown themselves up in the blast. The three are believed to be part of the same ISIS terror cell that carried out the French attacks in November. Cities around the world have now stepped up their airport security, as foreign leaders criticize the failure in Belgian screening and intelligence, and question the future of Europe’s open borders policy.
Security was also tightened across Tuesday’s primaries and caucuses in the U.S. following the Brussels bombings. Hillary Clinton and Donald Trump scored decisive victories in Arizona, Bernie Sanders won Idaho and Utah, and Ted Cruz took GOP delegates in the latter state. In terms of results, Clinton now looks tremendously close to securing her nomination before the Democratic convention, but on the Republican side, Trump could fall short of a first ballot victory (Jeb Bush also endorsed Cruz this morning).
Following an historic visit to Cuba, President Obama has touched down in Argentina to reset diplomatic relations and strengthen trade ties with the country. The two-day stopover marks a rapprochement after years of sour relations and is a sign of support for President Mauricio Macri’s investor-friendly reforms aimed at opening up Latin America’s third largest economy. The last U.S. presidential visit to Argentina was in 2005, when George W. Bush attended the Summit of the Americas.
Brazilian President Dilma Rousseff assured supporters late Tuesday that she’ll never resign and told them the impeachment process against her in Congress amounts to a coup attempt. Pressure to impeach Rousseff has grown in recent weeks as prosecutors in charge of the anticorruption probe centered on oil giant Petrobras (NYSE:PBR) brought the president’s predecessor and mentor, Lula da Silva, in for questioning on suspicion he benefited from the scheme. Last week, Rousseff appointed da Silva as her chief of staff.
More than two months after international nuclear sanctions on Iran were supposed to have ended, frustration is deepening that few trade deals are going through as foreign banks shy away from processing transactions with the country. Chief among these are rules prohibiting transactions in dollars – the world’s main business currency – from being processed through the U.S. financial system. Since January, Iran has struck agreements worth an estimated $50B with the global community, but getting the funding needed to turn the agreements into firm deals seems to be a challenging task.
Hungary has become the first emerging market to sport negative rates after the central bank lowered its overnight deposit rate by 15 basis points to -0.05%. Despite market expectations for no change at its March policy meeting, the bank also cut its key base rate by 15 basis points to 1.2%. The move comes amid lowered estimates for both growth and inflation.
Wall Street’s “fear gauge” has been falling sharply as traders anticipate the current rebound could help propel the S&P 500 to close out Q1 on a winning note. The Vix index, a widely followed barometer of implied volatility, hovered below a reading of 15 on Tuesday, near its lowest level since mid-August when China sparked a period of financial turmoil by devaluing its currency. The long-term average for Vix is 20, and readings below that level suggest greater optimism among investors.
Credit Suisse plans to eliminate an additional 2,000 jobs this year and deepen cuts at the investment bank, five months after CEO Tidjane Thiam announced an overhaul of the Swiss lender. “Today, we are announcing an increase to our 2018 cost reduction target from 3.5B Swiss francs ($3.59B) gross savings to at least 4.3B francs, driving our absolute operating cost base below 18B francs by 2018. For 2016, we aim to achieve 1.7B francs in cost savings.” Credit Suisse (NYSE:CS) shares are down 41% since the bank’s restructuring in October.