Mon, Apr 19, 2021 @ 16:47 GMT
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Sunset Market Commentary

Markets The long end of the European yield curve took off where it left on Friday: rising and underperforming against the US. The EU 10y swap rate trades north of 0.10% for only the second time since March 2020, trying to force a break higher out of a closing triangle...

Dollar Selloff Resumes and Accelerates, Sterling Gaining Most For Now

Euro finally breaks through 1.2 handle against Dollar, as the greenback's selloff resumes today and accelerates broadly. Nevertheless, Euro is overwhelmed by others, in particular Sterling, which is the strongest for now, followed by Swiss Franc. Commodity currencies are somewhat lagging behind too, partly as they're facing some pressure...

BoE Tenreyro: Recovery heterogeneity even within advanced economies

BoE policy maker Silvana Tenreyro said in an online discussion that upcoming recoveries diverge between advanced and emerging economies. And, "heterogeneity even within advanced economies". That's partly due to "different speeds of vaccine rollout". There are still "continued high virus prevalence in many countries, which "may lead to further lockdowns,...

Sunset Market Commentary

Markets The easing of tensions on bond markets remains a trading feature this week. We can’t really call It a comeback of core bonds, but they nevertheless are recouping some ground with positive eco and vaccination news by and large discounted. US Treasuries get some additional reprieve by the (one...

Dollar and Yen Maintain Gains as Markets Turn Steady

Markets are generally steady in Asian session today, with mild recovery seen in Nikkei. Though, movements in other markets are rather subdued. Commodity currencies recover in general while Yen, Swiss Franc and Dollar are the weaker ones. However, for the week, Dollar and Yen remain the strongest one while...

BoE Haldane: When recovery comes, it will come fast and large

Asked by in ITV's Robert Peston Show on whether the UK will have the fastest recovery for a century, BoE Chief Economist Andy Haldane said, "yes, as it was the sharpest recession to begin with". Haldane explained that people are "desperate to get their lives back, desperate to get out...

Weekly Economic & Financial Commentary: Still on Track for a Robust Recovery Even After Soft Data This Week

U.S. Review Still on Track for a Robust Recovery Even After Soft Data This Week The worse-than-expected outcomes for February retail sales, industrial production and housing starts were in part due to the severe winter weather that hit much of the country last month. However, other factors contributed to each...

Week Ahead: Coronavirus, MOAR Powell, and US Treasury Auctions

After a jam packed, Central Bank dominated week, things will begin to slow down as spring arrives.  There were no major surprises from the FOMC, BOE, and BOJ last week, however the peripheral central banks of Turkey and Norway were notably concerned about inflation.  This week, as the vaccine...

USD Gains As Uncertainty And Yields Rise

The USD tended to gain against most of its counterparts as uncertainty on the fundamentals along with US yields tended to be on the rise. It was characteristic that riskier assets such as commodity currencies and emerging economy currencies tended to suffer while US equities were dropping, with the...

Fed, BoE Step Back, Yields Push Up

Both of the Federal Reserve and the Bank of England vowed to keep liquidity plentiful and not to taper support in the face of rising inflation until they see prolonged signs of an economic recovery. The FOMC served up a surprise with the majority of the dots flat through...

BOE Voted Unanimously to Keep Bank Rate and QE Unchanged. Warned of Uncertain Outlook Despite Upbeat Data

The BOE voted 9-0 to leave the Bank rate unchanged at 0.1%. It will also continue to buy up to 875B pound of UK government bonds and 20B pound of corporate debts. While  cautioning that the economic outlook remained highly uncertain, policymakers acknowledged the recent upbeat data, smooth vaccination...

Sunset Market Commentary

Markets Yesterday’s remarkable ‘entente’ between markets and the Fed was short-lived. Markets were happy to embrace the Fed’s guidance to keep policy accommodative until hard data confirm the bank is reaching its targets. Second thoughts kicked in this morning. US yields easily reversed yesterday’s decline, with the long end setting...

BOE Hedges Comments from January’s Meeting: GBP/USD

The BOE left rates unchanged at 0.10% and left their bond buying program unchanged at 875 billion Pounds.  In addition, the central bank noted that they will not tighten until they see significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.   Some...

Sentiments Weighed Down by Unstoppable Yields, Dollar Recovers

Sentiments appear to be weighed down by the upstoppable rally in treasury yields again today. At the time of writing, US 10-year yield is trading above 1.75 handle while Germany 10-year bund yield is at -0.25. US futures point to lower open, with weakness seen particular in NASDAQ again....

Pound Dips as BoE Stays Dovish

The British pound is in negative territory in the Thursday session. Currently, GDP/USD is trading at 1.3926, down 0.27% on the day. BoE remains in an accommodative mood The Bank of England did not surprise anyone with its rate announcement earlier in the day. MPC members were unanimous in their decision...

BoE stands pat, financial conditions broadly unchanged

BoE kept Bank Rate unchanged at 0.10%, and asset purchase target at GBP 895B as widely expected. Both decisions are made by unanimous 9-0 vote. It doesn't intend to tighten monetary policy " at least until there is clear evidence that significant progress is being made in eliminating spare capacity...

(BOE) Bank Rate Maintained at 0.1%

The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment.  At its meeting ending on 17 March 2021, the Committee judged that the existing stance of monetary policy remains appropriate. The...

The Fed Left Monetary Policy Unchanged. The Market Focused On The Meeting Of The Bank Of England

At the press conference, Federal Reserve Chairman Jerome Powell said that the current monetary policy is appropriate and there is no reason to change the volume of stimulus amid the sharp rise of Treasury yields in the last month. Against this backdrop, investors' concerns about monetary policy were dissipated,...

No Dotty Moves From The Fed

As expected, the FOMC held to its previous guidance of no imminent rate hikes or tapering while reiterating its views on supporting the economy to help rebuild employment. Although it upgraded its growth assessments for the US this year to 6.50%, it maintained that higher inflation was transitory. The...

BoE Could Strike A Dovish Tone, But Traders Won’t Buy It

After Wednesday's policy decision by the Fed and previously the ECB, I wouldn't be surprised if the Bank of England also tries to be more dovish than the markets are currently expecting today. But will the bond markets call the BoE's potential bluff in the same way? Indeed, benchmark...

USD Weakens After Fed’s Interest Rate Decision

USD tended to retreat against a number of its counterparts yesterday after the Fed's interest rate decision to remain on hold as was widely expected. The bank implied that still no interest rate hikes are in the schedule until 2023 is through, as per the renewed dot plot, albeit...

Dovish Fed Lifts Wall Street, But Can’t Keep Yields Down

Fed maintains dovish rate path despite upping growth and inflation forecasts Dow Jones and S&P 500 hit new records; Nasdaq rises too before futures slip Dollar falls but then rebounds as 10-year Treasury yields resume climb BoE decision up next, pound steady; yen see-saws on BoJ rumours Fed reiterates...

Is The BoE Worried About The Rise Of Longer-Term Yields?

Markets The Fed maintained the policy rate at 0-0.25% yesterday as well as its $120bn monthly bond buying pace. Tweaks to the policy statement were insignificant. Growth however was boosted to 6.5% this year (4.2% in December) and to 3.3% in 2022 (3.2%) before normalizing in 2023 to 2.2% (2.4%)....

BoE Meets, Nike And FedEx Announce Earnings

The Bank of England (BoE) will announce its latest policy verdict today and is expected to maintain its monetary policy broadly unchanged. The BoE officials are certainly optimistic about the economic outlook, but they may find hard to communicate their joy with investors given the latest spike in sovereign...

European Open: Aussie Jobs Surge, BOE Meeting In Focus

Yet more data from Australia's rebounding economy goes at odds with the RBA's dovish stance. And whilst on the central bank theme, the Bank of England (BOE) meet this morning. Asian Indices: Australia's ASX 200 index fell by -49.3 points (-0.73%) to close at 6,745.90 Japan's Nikkei 225 index has...

Traders Await Number Of Interest Rate Decisions Today

The US dollar eased slightly after the Fed delivered its March interest rate decision. The Fed maintained a dovish stance even as it upgraded its economic outlook. It boosted its forecast that the American economy will expand by 6.5% this year mostly because of the vaccine roll-out and recent...

Dollar Falls on Risk-On Sentiment after FOMC, Aussie Powers Up on Job Data

Dollar dropped broadly overnight as markets turned into mild risk-mode following FOMC rate decision. A better economic outlook was painted by the new economic projections. Yet, Fed is clear that it's not even considering tapering the asset purchases for now. DOW and S&P 500 rose to new record while...

Awaits BoE view on recovery, yields and inflation, GBP/CHF bullish in range

BoE is generally expected to keep bank rate unchanged at 0.10% today, and hold the QE target at GBP 875B. Both decisions should be by unanimous 9-0 votes. Governor Andrew Bailey sounded upbeat about economy economy in his comments earlier this week, even though that came with "a large...

BOE Preview – Response to Rising Yields in Focus

We expect BOE to vote 9-0 to leave the Bank rate unchanged at 0.1%. Meanwhile, the QE program will also stay at 875B pound worth of government bonds, and 20B pound of corporate debt. Despite contraction in the first quarter, policymakers should point to the post-pandemic recovery as driven...

Bank of England to Stick to ‘Cautionary Realism’ as UK Yields Surge

The Bank of England will announce its latest decision on Thursday (12:00 GMT) just hours after the Fed’s, likely keeping its monetary policy settings unchanged also. There is no press conference or new economic projections to accompany the March meeting, so no fireworks are anticipated. However, investors will be...