Bond Market Insights - Tues, 17 Mar 2026

A moment of calm overnight as a pullback in crude helped steady nerves across global markets. US equities bounced and volatility eased, S&P was up 1%. Brent had pushed as high as $106 before sliding back below 100. while WTI settled below $94.

Technology led the rally. Nvidia gained after Jensen Huang opened a conference with a characteristically bullish tone, saying expected Blackwell and Rubin orders could reach $1tn through 2027. Micron jumped on expansion plans in Taiwan, while broader AI enthusiasm was reinforced by OpenAI’s reported talks with private equity firms to form a JV and Alibaba’s move to consolidate its AI efforts under CEO Eddie Wu. The tone in mega-cap tech was further helped by Meta, which rose in premarket trading despite controversy around reports of potential large-scale layoffs.

UST yields fell 4-6bps across the curve, effectively reversing Friday’s selloff, as investors edged back toward duration after what had become a fairly brutal repricing of Fed expectations. Traders are now pricing only one Fed cut by year-end versus a prior consensus closer to two.

Expectations are that the Fed stays on hold on Thursday, with Chair Powell likely to sound neutral to hawkish. The median dot is expected to remain unchanged for both this year and the longer run.

US data overnight did little to resolve the debate. Industrial production was resilient, beating expectations in February, but the Empire State survey disappointed, regional manufacturing remaining patchy and confidence fragile. The US economy is not rolling over, but neither is it delivering the kind of broad, synchronised strength that would make the Fed comfortable being more openly hawkish.

China looks healthy by comparison. Retail sales and industrial production both beat consensus and Yi Xiong’s activity indicator pointed to firmer sequential growth in the first two months of the year..

Canada’s CPI came in softer than expected, but the FX focus there is less about one print and more about whether the Bank of Canada can maintain its hawkish tone in the face of a deteriorating growth backdrop.

Trump’s comments that multiple countries may help secure the Strait of Hormuz offered some relief to energy markets, and oil sold off on the hope that disruption might not escalate further in the immediate term. That is a thin foundation and expect the next move to be headline led.

Today the RBA meets and is expected to announce a 25bp hike. Japan releases tertiary activity and Germany the ZEW survey. US releases include NY Fed services and pending home sales.