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Dollar Recovers Despite Sluggish ADP Job Growth, Yields Up Again

Dollar recovers in early US session as sluggish ADP job growth drags down stock futures. Additionally, treasury yields are having a mild rebound. At this point, Sterling is following as the strongest followed the day, then Canadian. New Zealand Dollar is leading Australian Lower, followed by Swiss Franc and...

Eurozone PPI at 1.4% mom, 0.0% yoy in Jan

Eurozone PPI came in at 1.4% mom, 0.0% yoy in January, versus expectation of 1.0% mom, -0.4% yoy. For the month, industrial producer prices increased by 3.5% mom in the energy sector, by 1.2% mom for intermediate goods, by 0.4% mom for capital goods and for durable consumer goods...

Eurozone PMI composite finalized at 48.8, on course for a double-dip recession

Eurozone PMI Services was finalized at 45.7 in February, up slightly from January's 45.4. PMI Composite was finalized at 48.8, up from January's 47.8. Looking at some member states, Italy PMI Composite rose to 7-month high at 51.4. Germany came in at 51.1.. France dropped to 3-month low at...

What Does the UK Budget Hold for Sterling?

The Chancellor of the Exchequer will unveil the latest UK Budget on Wednesday at 12:30 GMT. It will likely include another massive round of spending to safeguard jobs and boost the recovery. Rumors suggest taxes on corporations might be raised as well to repair the hole in public finances,...

Sunset Market Commentary

Markets Some ‘constructive calm’ returned to European markets today. Asian markets took a more nervous start as a top Chinese banking regulator this morning warned on risks for bubbles in the global financial system. However, European investors didn’t feel addressed by this warning. European equities soon reversed opening losses. Eco...

Euro Indices Mixed on WHO Warning

After a stellar session on Monday that saw the S&P enjoy its strongest day of gains in nine months, Europe opened on the defensive. Warnings over asset bubbles from Chinese officials, fresh concerns over Covid numbers and dismal German retail sales figures all briefly weighed on sentiment. However, cautious...

Asia Pauses For Thought

Asian markets appear to be taking a breather this morning, having led the global equity recovery yesterday. US markets found their mojo again overnight, with a day of calm on bond markets greenlighting equities to leap higher on the vaccine recovery optimism that characterised the Asian session earlier in...

Sunset Market Commentary

Markets Calm returned after last week’s wild swings on bond markets that spilled over to risky assets as well. The VIX volatility index retreated further from a minor spike somewhere around 29 to 25 today. Market sentiment is optimistic at the start of the new month with European stock markets...

Swiss Franc Sold Off Again as Stocks Rebound, Yields Turned Mixed

Swiss Franc is in deep selloff again today as risk sentiment further stabilized in the markets. European indices rebound broadly while US futures point to higher open. Global bond markets also turned mixed for now. Euro and Yen are following as next weakest. Meanwhile, Canadian Dollar is leading other...

Week Ahead – Rising Yields Spook Markets

Powell fails to ease concerns Everyone is watching the bond markets at the moment, as yields accelerate higher and investors become increasingly anxious. That is dominating the headlines and it’s unlikely to change next week, with the jobs report on Friday now even more significant. Country US It seems Wall Street is much...

Week Ahead – NFP to Guide Yields, RBA Could be a Yawn, Pound Turns to UK Budget for Boost

As a new month starts, investors will have their eyes locked on the latest nonfarm payrolls numbers out of the United States amid an accelerating selloff in bond markets. The Reserve Bank of Australia’s policy meeting will be the only central bank gathering of the week but is unlikely...

Weekly Focus – Spill Over from Continuing Yield Increase

Yields continued up this week; US 10yr government bond yields reached a one-year high. Oil prices increased above USD67/barrel and industrial metals, particularly copper, have accelerated further as well, weakening safe haven currencies like JPY and CHF. This development has been backed by more positive vaccine news and a...

Sunset Market Commentary

Markets Central banks stepped in to counter an aggressive selloff on bond markets but with mixed results. The Bank of Korea announced buying plans (5-7tn won) for the coming months. The Reserve Bank of Australia pulled out the big guns with an unscheduled A$3 bn purchase to defend its 3-year...

Rising Real Rates Hit Markets

Market movers today This morning we get Q4 GDP details from both Sweden and Denmark. We know what growth was based on the indicator but not what drove it. In Norway, we expect the unemployment rate was unchanged at 4.0% in February. In the US, monthly private consumption as...

Sunset Market Commentary

Markets The sell-off on bond market continues. US yields add 2.8 bps (2-yr) to 8.1 bps (7-yr). The belly of the curve underperforms after a long bear steepening move. It suggests that markets more and more start discounting that the Fed will sooner rather than later have to address risks...

Euro Attempts a Come Back, Global Yields Surge Continues

Surging global yields remain the major focus today, with Germany 10-year bund yield hitting as high as -0.234, while UK 10-year gilt yield reaching as high as 0.818. Earlier in Asia, Japan 10-year JGB yield closed strongly at 0.152. US 10-year yield is also trading above 1.45. In the...

Eurozone economic sentiment rose to 93.4 in Feb, EU rose to 93.4

Eurozone Economic Sentiment Indicator rose from 91.5 to 93.1 in February. Industrial confidence rose from -6.1 to -3.3. Services confidence dropped from -17.7 to -17.1. Consumer confidence rose from -15.5 to -14.8. Retail trade confidence dropped from -18.5 to -19.1. Employment Expectation Index rose from 89.1 to 90.0. EU Economic...

Germany Gfk consumer sentiment rose to -12.9, recovering from tough lockdown shock

Germany Gfk Consumer Sentiment for March improved to -12.9 in March, up 2.6 pts. For February, economic expectation rose notably from 1.3 to 8.0. Income expectations rose from -2.9 to 6.5. Propensity to buy rose from 0.0 to 7.4. "Consumers are recovering to some extent from the shock they suffered...

Global Yields Catch Up With US Treasuries; Has the Dollar’s Rebound Been Thwarted?

A battle of the yields is underway as the returns on long-dated government bonds recover to pre-pandemic levels, undermining the allure of riskier assets such as stocks. The rally in bond yields is being led by US Treasuries, as the American economy shines the brightest in the Western sphere....

Sunset Market Commentary

Markets As was the case over the previous days, markets are still looking for the right balance/speed with respect to reflation trade. Recent sharp repositioning on bond and commodity markets earlier this week caused some nervousness on parts of the equity market. Fed Chair Powell yesterday reiterated that the Fed...

Euro Drifting as Powell Talks Dovish

The euro is unchanged in the European session. Currently, EUR/USD is trading at 1.2154, up 0.02% on the day. German GDP posts small gain Germany is the eurozone’s largest economy and has traditionally been the locomotive that leads the bloc in economic growth. With the eurozone grappling with the devastating effect...

Sunset Market Commentary

Markets European equity markets held a cautious bias following a mixed Asian session. The recent surge in commodities (although less the case today) and yields continues to weigh on stocks that have already been frontrunning the post-pandemic recovery with great enthusiasm. Stocks quickly slipped in the red after opening flat...

Sterling Stronger on Reopening Optimism, Dollar Stabilizes

Sterling rises broadly today as UK Prime Minister Boris Johnson said he's "hopeful" and "very optimistic " to end pandemic restrictions on June 21, based on the "one-way road to freedom" roadmap unveiled yesterday. Canadian Dollar is Dollar is following as second strongest, with a little help from oil...

Eurozone CPI finalized at 0.9% yoy, EU at 1.2% yoy

Eurozone CPI was finalized at 0.9% yoy in January, up from December's -0.3% yoy. The highest contribution came from services (+0.65%), followed by non-energy industrial goods (+0.37%), food, alcohol & tobacco (+0.30%) and energy (-0.41%). EU CPI was finalized at 1.2% yoy, up from 0.3% yoy. The lowest annual rates...

Sunset Market Commentary

Markets European investors made an abrupt end to the reflation vibe which was still active during Asian dealings. Core bonds fell prey to some short covering after yields (the mirror image) set fresh recovery highs on a global level. ECB Lagarde (see below) gave an additional boost. German Bunds outperform...

Swiss Franc Weak after Brief selloff, Yen and Dollar Also Soft

Swiss Franc was a focus in earlier European session as it suffered brief but deep selloff. Though, it somewhat found some footing quickly, even though it's still the second weakest for today so far. Yen is underperforming again on strong major global benchmark yields. Dollar and Canadian Dollar are...

German Ifo business climate rose to 92.4, manufacturing at best since 2018

Germany Ifo Business Climate rose to 92.4 in February, up from 90.3, above expectation of 90.5. Current Assessment index rose to 90.6, up from 89.2, above expectation of 88.9. Expectations index rose to 94.2, up from 91.5, above expectation of 91.9. Looking at some details, manufacturing index rose from 9.1...

Weekly Economic & Financial Commentary: Q4 GDP Data Top Expectations, but Q1-2021 Looking Shakier

U.S. Review A Consumer and His Stimulus Check Are Soon Parted Stimulus checks from the year-end COVID-relief package arrived in January, and we learned this week that retailers raked in more money during that month than they have since June. Every single store category reported increasing sales during the month....

Week Ahead – Powell to the Rescue

Rising yields spook investors Jerome Powell’s appearances in Congress next week may come at the perfect time. Rising yields have made investors nervous and the Fed Chair may be the person to put their minds at ease. Meanwhile, Boris Johnson will lay out plans for the easing of the lockdown...

Week Ahead – Dollar Realigns With US Fundamentals, RBNZ Meets

There's been a striking change in the dynamics of the FX market lately, with the US dollar no longer trading exclusively as a safe haven and instead reacting to American economic data. Investors have their eyes on the Fed, even if it is too early to price in a...