Rates Fall, Equities Mixed Ahead of Fed Speakers and G20 Summit

 

President Trump signs executive order authorizing new sanctions against Iran. President Trump added that the new sanctions would prevent top officials from accessing financial instruments, the White House’s latest attempt to discourage a re-nuclearization of the country. President Trump added that the sanctions were a “strong and proportionate response to Iran’s increasingly provocative actions.” The continued tensions between the US and Iran has not yet been felt significantly in equity markets as the VIX or “Fear Index” subdued at 15.26.

 

 

Seemingly endless bond rally drives 10 year Treasury yield to 2.01%. Treasury yields and swap rates fell 4-5 basis points across the curve as investors continued to pile into bonds. Tomorrow, three different voting FOMC members will speak:  New York Fed President John Williams will speak at a forum in New York, Fed Chair Jerome Powell, and St Louis Fed President James Bullard (the lone dissenter in the last FOMC vote) will speak at separate events.

 

 

U.S. equities mixed ahead of G20 meetings. The S&P 500 and Dow Jones Industrial Average both trimmed initial gains to end the day down 0.17% and up 0.03% respectively. The G20 summit will begin later this week and is expected to include a meeting between President Donald Trump and Chinese President Xi Jinping. While investors are hoping to see a breakthrough at these talks, President Trump has threatened to hit China with additional tariffs on at least $300 billion if a deal is not reached at the summit.