Beware the Ides of March

In a spooky correlation with the infamous Ides of March (15 March) this week promises to be one to remember with the US Fed March meeting, US debt ceiling and the Netherlands elections all happening around that auspicious date and all taking on 11th hour news.  Indeed Theresa May was talked out of nominating 15 March for triggering Article 50 to start the Brexit because of ‘that’ date…

Friday night saw the non farm payrolls print an expected strong 235,000 new jobs and unemployment at just 4.7% essentially baking in the cake a rate rise on the 15th US time.  But the market reaction reflected the fact that whilst that headline number was strong we again saw weaker than expected average hourly earnings, rising just 0.2% (and remember last month was just 0.1%).  Gold actually rallied back up over US$1200 on the print rather than fall as expected.  This was helped along by Trump’s Treasury Secretary Steven Mnuchin talking up currency manipulation threats ahead of the G20 and driving down the USD.

And as Business Insider reported on Friday that same Treasury Secretary has put the House on notice about the debt ceiling:

“In a letter to House Speaker Paul Ryan sent on Wednesday, Treasury Secretary Steve Mnuchin "the outstanding debt of the United States will be at the statutory limit" at midnight on March 16. At that point, Treasury will have to utilize "extraordinary measures" for the federal government to keep paying its bills.

Mnuchin told Ryan at that point "Treasury will suspend the sale of State and Local Government Series (SLGS) securities" "until the debt limit is either raised or suspended."”

And finally to the Netherlands where just days before an election where the anti Islam, anti immigration, anti EU Freedom Party was starting to lose its lead in the polls, we had the blow up in tensions between Turkey and the Netherlands putting a full gust of wind in Geert Wilders party which is now widely expected to emerge as the largest party in an election with no outright majority leader.

Gold has rallied after the last two Fed rate hikes and historically rallies on the sort of uncertainty the debt ceiling and political uncertainty possibly present this week.  It will be interesting to see how this all unfolds and what impetus a Wilders win in the Netherlands may provide to Le Penn in France.