John Hancock: Weekly Market Recap Week Ended April 12

Stubborn inflation

The latest inflation report cast further doubt about the timeline for potential interest-rate cuts, as the Consumer Price Index rose to an annual rate of 3.5% in March, up from 3.2% the previous month. Excluding volatile food and energy prices, core inflation rose 3.8%. U.S. government bond yields rose sharply following Wednesday’s report.

Yields jump again

In the wake of Wednesday’s inflation report, the yield of the 10-year U.S. Treasury bond rose to the highest level in five months, as it climbed as high as 4.59% at one point. As recently as February 1, the 10-year yield had closed as low as 3.86%.

Higher for longer?

Wednesday’s hotter-than-expected inflation data reinforced recent market expectations that initial interest-rate cuts are no longer imminent—a view that was backed up later in the day by the release of minutes from the U.S. Federal Reserve’s March policy meeting. Fed officials agreed that they were prepared to keep rates at current high levels for longer than they had previously anticipated.

Retail sales ahead

Monday’s scheduled release of U.S. retail sales data could indicate whether a recent positive turnaround in momentum extended into March. In February, sales rebounded to a 0.6% gain after posting an unexpected 1.1% decline in January.

Source: https://wmr.jhinvestments.com/