Markets were little changed in March, with the currency majors and United States equity markets losing a bit of steam.
Instead we noticed a limp closing to the month, with the euro failing to hit its goal of 1.40 against the US dollar and the British pound failing to progress to 1.70.
At the start of last month, developments from Crimea overshadowed markets and cast a strong risk-averse shadow, which kept the US dollar in demand. However, most of these gains were lost after a more-than-hawkish Federal Open Market Committee rate decision in mid-March, which caused the dollar to pare its gains from earlier in the month.
The Fed chair, Janet Yellen, was more hawkish than expected during her testimony. One of the notable differences was the adoption of a wider range of data for future guidance policy. The Fed under Ben Bernanke had targeted a 6.5 per cent unemployment threshold as a target to determine future Fed policy.
With February’s US non-farm payroll report showing an unemployment rate of 6.7 per cent, Ms Yellen instead broadened the range of data the FOMC will use to determine future Fed policy action instead of solely focusing on US labour market data.
The Fed was also very detailed on future interest rates, with the rate expected to be closer to 1 per cent through next year. Current rates were kept at 0.25 per cent, while the pace of asset purchases was dropped by another US$10 billion to a revised $55bn per month. The purchase of mortgage-backed securities was cut by $5bn to a revised $25bn, while treasury purchases were scaled back by $5bn to a revised $30bn.
The Fed’s decision to use a broader array of market data as opposed to solely focusing on the condition of the labour market will de-emphasise the importance of today’s non-farm payroll report – although volatility is set to remain high. February’s report showed that 175,000 new jobs were added in the US, with the unemployment rate ticking up to 6.7 per cent. Expectations for March are for gains of 206,000, with the rate dropping back to 6.6 per cent. However, once again the participation rate will be a more accurate barometer to judge the overall unemployment rate.
The broader range of data from March will inspire US bulls, as the data has been positive. Industrial production and manufacturing data from the US were slow, albeit showing signs of improvement over February. Inflation dropped to 1.1 per cent from a previous reading of 1.6 per cent. US annualised fourth-quarter GDP came in at a solid 2.6 per cent, below expectations but higher than the previous month’s reading of 2.4 per cent.
Perhaps the most interesting piece of data from the US this past month was the net long-term treasury international capital (Tic) flows data, which measures the amount of investment inflows into US bond and equity markets compared to the outflows to foreign bond and equity markets. The data collected from January showed that there was a $7.3bn increase in investments into US markets, compared to December, when about $45.9bn left American shores for foreign markets.
This rise in investments in the US not only shows more confidence in the US markets, but an increase in demand for US assets will naturally keep the demand for the dollar elevated to make these purchases. As long as the Tic data remains positive, more money is flowing into the US on the back of safe haven demand.
The Indian rupee put on a strong performance in March, gaining more than 3 per cent against the dollar to close the month below the all-important psychological level of 60. The rupee has gone through a bit of a renaissance, as improving political developments in the lead- up to May’s general elections have improved the prospects for the Indian economy.
With exit polls showing a strong turnout for the Modi-led BJP, the prospects for the Indian markets and the rupee will continue to improve through the month ahead. Data from India this past month has also improved prospects for the rupee. Dips in consumer price pressures (the inflation rate fell to 8.1 per cent, down from 8.79 per cent) while industrial production figures and manufacturing purchasing index data recorded slight gains have also brought optimism to Indian markets.
With inflation at a 25-month low and near the Reserve Bank of India’s target rate and the rupee making a recovery, the RBI held rates unchanged at 8.00 per cent as expected when it met on Tuesday. The rupee has rallied more than 5 per cent against the dollar in the past two months, and the gains are set to continue. We expect to see a strong showing of 58.40 against the dollar in the weeks ahead. However, the volatility will be high through the elections next month.
Gaurav Kashyap is the head of futures at Alpari ME
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
More coverage from the Future Forum
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
RESULTS
Bantamweight: Victor Nunes (BRA) beat Azizbek Satibaldiev (KYG). Round 1 KO
Featherweight: Izzeddin Farhan (JOR) beat Ozodbek Azimov (UZB). Round 1 rear naked choke
Middleweight: Zaakir Badat (RSA) beat Ercin Sirin (TUR). Round 1 triangle choke
Featherweight: Ali Alqaisi (JOR) beat Furkatbek Yokubov (UZB). Round 1 TKO
Featherweight: Abu Muslim Alikhanov (RUS) beat Atabek Abdimitalipov (KYG). Unanimous decision
Catchweight 74kg: Mirafzal Akhtamov (UZB) beat Marcos Costa (BRA). Split decision
Welterweight: Andre Fialho (POR) beat Sang Hoon-yu (KOR). Round 1 TKO
Lightweight: John Mitchell (IRE) beat Arbi Emiev (RUS). Round 2 RSC (deep cuts)
Middleweight: Gianni Melillo (ITA) beat Mohammed Karaki (LEB)
Welterweight: Handesson Ferreira (BRA) beat Amiran Gogoladze (GEO). Unanimous decision
Flyweight (Female): Carolina Jimenez (VEN) beat Lucrezia Ria (ITA), Round 1 rear naked choke
Welterweight: Daniel Skibinski (POL) beat Acoidan Duque (ESP). Round 3 TKO
Lightweight: Martun Mezhlumyan (ARM) beat Attila Korkmaz (TUR). Unanimous decision
Bantamweight: Ray Borg (USA) beat Jesse Arnett (CAN). Unanimous decision
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
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UAE currency: the story behind the money in your pockets
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
The biog
Favourite food: Tabbouleh, greek salad and sushi
Favourite TV show: That 70s Show
Favourite animal: Ferrets, they are smart, sensitive, playful and loving
Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can
Name of first pet: Eddy, a Persian cat that showed up at our home
Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
