Eurozone PMI manufacturing finalized at 57.9, fastest cost inflation in a decade
Eurozone PMI Manufacturing was finalized at 57.9 in February, up from January's 54.8. Markit said output and new orders were up sharply as export trade strengthens. But acute lengthening of delivery times drove fastest cost inflation in nearly a decade.
Looking at some member states, Germany PMI manufacturing hit 37-month...
EUR/USD Should Recover 1.21 For The Pair To Retain The Short-Term Upward Momentum
Markets
The bond selloff eased markedly in Europe last Friday, in part following comments from ECB’s Lane and Schnabel. The latter said rising real long-term yield could threaten the recovery. That in turn might lead to more action by the central bank. In an overall cautious setting, the German yield...
Morning Mail: Chinese PMI Drops Again
Market movers today
Development in bonds markets continues to be a key driver for most markets. Focus will be on any signs of the ECB increasing bond purchases and lots of Fed speeches throughout the week.
In the US today, we get ISM manufacturing. We expect it to remain...
European Open: Minor Bounce For Indices Ahead Of Key PMI Reports
Sentiment was given a slight boost in Asia today following the weekend's positive news flow.
Asian futures:
Australia's ASX 200 index rose by 116.3 points (1.74%) to close at 6,789.6
Japan's Nikkei 225 index rose by 597.66 points (2.06%) to close at 29,563.67
Hong Kong's Heng Seng index has risen...
A Wild Week of Metals, Yields, Stocks and Dollar
Just after DOW hit new record high in the middle of last week, the rally was choked by skyrocketing treasury yields. Dollar surprisingly ended as the strongest one for the week, followed by Euro and then Sterling. Australian Dollar suffered most as it reversed some of the month's gains....
Weekly Economic & Financial Commentary: The U.S. Economy Continues to Start 2021 on a High Note
U.S. Review
The U.S. Economy Continues to Start 2021 on a High Note
In January, personal spending increased at a robust 2.4% pace, while personal income soared 10.0%. The core PCE deflator rose 0.3% during the month and 1.5% over the year. Fed Chair Powell testified in front of Congress...
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...
Dollar Strong as Stocks Stay in Red Even Though Yields Retreat
Even though treasury yields are retreating mildly today, stocks are staying in red in Europe and Asia. US futures point to a recovery but it's unsure if the rebound could sustain before close. Investors are digesting comments from central bank officials regarding surging real long term rates and inflation....
ECB Schnabel: May need to step up policy support in response to rising real long-term rates
ECB Executive Board Member Isabel Schnabel said a a speech that "changes in nominal rates have to be monitored closely and interpreted in the light of their driving forces". "A rise in nominal yields that reflects an increase in inflation expectations is a welcome sign". Even gradual increase in...
ECB Lane: It’s crystal clear we’re not engaged in yield curve control
ECB chief economist Philip Lane told Spanish newspaper Expansión in an interview, "at this stage, an excessive tightening in yields would be inconsistent with fighting the pandemic shock to the inflation path. That's what we said, and that's what we will be continuing to keep an eye on day...
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...
ECB Lane: Ensuring favourable financing conditions is central to restoring inflation momentum
ECB chief economist Philip Lane said in a speech, "ensuring favourable financing conditions is central to restoring inflation momentum and guiding the formation of inflation expectations". And, "preservation of favourable financing conditions should involve the inspection of indicators along the whole transmission chain of our monetary policy".
Within the broad-based...
Fed’s Powell Moves The Markets Once Again
US stock markets were on the rise yesterday, with the Dow Jones reaching new record highs, as Powell reiterated his dovish message. The Fed's Chairman once again pledged that the bank is to maintain an accommodative stance with a loose monetary policy, this time before the House of Representatives...
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...
Is The Dollar Near A Potential Tipping Point?
Markets
Global markets yesterday again showed sharp swings as investors tried to adapt positions to the developing reflation narrative. European markets took a cautious albeit constructive start. However, trading on US interest rate markets turned very volatile. US yields jumped sharply higher with the 10-y and the 30-y setting new...
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...
Positive Vaccine News Keep Ticking In
Market movers today
Another day with mostly tier-2 data releases. In Sweden, the NIER survey is due out.
In the US we get weekly jobless claims data and core capex data for January. A lot of FOMC members are also speaking tonight but they are unlikely to say anything...
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...
Powell Soothes Nerves
Central banks send dovish message to markets
Fed Chairman Jerome Powell stayed on message overnight, acknowledging the improvements seen in the economy but highlighting that it was “uneven and far from complete.” Mr Powell saw no signs of “bad inflation”. He committed to keeping monetary policy ultra-easy, emphasising the need...
Can Powell’s Commitment Cause A Pause In The Steeping Trend On Global Interest Rate Markets?
Markets
Investors continued pondering how to cope with different aspects of the reflation trade. Rising yields and an astonishing commodity rally are a sign of optimism on the economic rebound, but might also became a source of volatility. European equities initially nosedived but reversed most of the losses. US indices...
Powell Supported Risk Sentiment
Market movers today
Today is a quiet day in terms of data releases. In Sweden, the Debt Office borrowing forecast is due out today.
In the UK, we will listen closely to Bank of England policymakers with governor Bailey, Broadbent, Vlieghe, Haskel and Haldane all speaking.
In the US;...
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...