Every man for himself
US dollar dips, markets eye Powell testimony
Financial markets have an every man for himself look about them today, as various asset classes diverge in their own directions. A combination of tightening yields and the impending two-day testimony by Fed Chairman Powell starting today in Washington DC seems to have provoked differing reactions across different markets.
Despite yields rising once again in the 10 and 30-year tenors, the US dollar fell overnight across the board. Gold rallied impressively as the dollar weakened, and US yields rose, despite that being a repeat of the price action on Friday which it completely ignored. Equities fell on Wall Street, led by the tech-heavy Nasdaq, which endured a torrid day. Oil, meanwhile, rose impressively despite thawing signs in Texas and signs of cracks among OPEC+ on the trajectory of production cuts. Base metals, notably tin and copper, rallied strongly once again. Meanwhile, Bitcoin did what it does, falling 10%
Caution prevails in Asia
February 18, 2021SharePrint
Although China has returned from its week-long break today, there are little signs that mainland markets want to play catch-up with the equity action seen elsewhere over the past week. Indeed, after spiking higher on the open, both the Shanghai Composite and the CSI 300, having risen 2.0% in early trading, are now nearly 1.0% lower, dragged down by the index’s Shenzhen components, which is enduring a torrid day.
Inflation nerves seem to be lingering around financial markets despite the FOMC minutes overnight, reassuring hinting at lower for longer, with no change in tack in sight. That may have arrested the rise in US longer-term yields, which traded sideways overnight, but wasn’t enough to push them materially lower. Any good work from the FOMC minutes was offset by higher US PPI numbers and US Retail Sales, which blew expectations out of the water by rising 5.30% in January.
Japanese yen ticks higher - MarketPulse marketpulse.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from marketpulse.com Daily Mail and Mail on Sunday newspapers.
Creeping bond yields unnerve markets
February 17, 2021SharePrint
US yields continue to rise
Government bond yields crept higher overnight, notably in the United States where the US 10-year rose above 1.30%, and the 30-year consolidated above 2.0%, rising to 2.08%. With the buy, everything trade spanning equities, currencies and commodities in full swing for most of February, the rise in yields was enough to provoke investors to book profits. That was despite the price action in yields being a repeat of much of last week.
I noted yesterday that another spike in US yields was the only thing that could upset the Biden stimulus/vaccine-led recovery buy everything rally. For once my timing was right, although I can really claim no credit. Financial markets at the moment are schizophrenic, concentrating on a single issue of the day depending on the narrative they want to hear and their positioning while excluding what doesn’t suit. Last night it was bond markets turn to be the dish o
Inflation fears weigh - MarketPulse marketpulse.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from marketpulse.com Daily Mail and Mail on Sunday newspapers.