BIS: Central banks have to work out the implications of rising bond yields
The Bank for International Settlements said, with the release of its quarterly review, that "prospects of a more robust economic recovery buoyed risky asset prices, with signs of exuberance reflected in the behaviour of retail investors." And, "sovereign yield curves steepened as investors priced in higher inflation and fiscal...
Stocks Edge Up, Dollar Eases As Bond Markets Stabilize
Yields fall back as selloff in government bonds cools, but is the panic over?
Stocks get off to firm start as vaccine and stimulus hopes still at play
Risky currencies pare losses as dollar recedes from highs, gold bounces off lows
Calm returns to bond markets, but maybe not...
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: When Doves Cry
Fed Chairman Powell provided testimony to Congress last week regarding Monetary Policy. He noted that the Fed was in no hurry to take its foot off the easing pedal and that although inflation expectations have been creeping into the markets, the Fed views this as a sign of confidence...
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...
A Wild End to the Week
It's a bit of a wild end to the week, with stock market jitters returning in force after yields spiked again on Thursday.
As the morning progressed in Europe, yields pared gains which has alleviated some of the pressure on stock markets but that seems to have reversed itself once...
Bond Market Meltdown Devastates Stocks, Resurrects Dollar
Carnage in bonds sends US yields flying, equities in a world of pain
Dollar comes back from the dead, commodity FX and pound lose altitude
Just a disastrous bond auction or a harbinger of bigger moves?
Near-disaster in bonds infects everything else
What started out as a relatively calm session...
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...
US Yields Send Asian Equities Lower
Equities bloodbath continues in Asia
The 17-basis point rise in US 10-year yields overnight, and a close over the magical 1.50% market, was enough to send Wall Street into a spiral dive. The S&P 500 fell 2.45%, while the tech-heavy Nasdaq suffered a severe bout of global recovery, work from...
Yield Surge Triggers Market Drama
US futures point to more declines.
10-year yields moderating after 1.60% breach.
Bond market’s message outshining Fed rhetoric for now.
Gold extends 2021 decline.
The surge in Treasury yields sent shockwaves across broader markets on Thursday, with 10-year yields briefly breaking the 1.60% mark to hit a new one-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...
Yields Up, Stocks Down, Dollar and Yen Rebound
US stocks suffered steep selling overnight on sharp rally in treasury yields, and the selloff carried forward to Asian markets. Yen and Dollar ride on the turn in risk sentiments and rebounded, together with Dollar. Australian and New Zealand are in deep pull back, together with Sterling. Euro and...
10-yr yield breaks 1.5 after awful debt auctions, heading to 2%?
The fast acceleration in US yield was a major shocker to the markets overnight. Fed officials are generally unconcerned with recent rally. They even sounded upbeat about the development in the bond markets. But some analysts pointed to the poor demand in the "awful" bond auctions overnight. Now that...
Yield Shield Peeled
The broader market is struggling with weather to interpret rising yields as a sign of economic improvement, inflation or dislocation in the bond market. On Thursday, an ugly rise in rates (10 yr hit 1.60%) led to a big reversal in risk with CHF leading and AUD lagging. The...
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...
Stocks Pull Back on Higher Yields
US futures have turned negative, with European stock markets reversing earlier gains as rising yields continue to weigh on sentiment.
Jerome Powell's soothing tones and some positive results from J&J on the vaccine front had given markets a boost late Wednesday, going into today, but already we're seeing that fade....
GBP/USD: The #1 Most Important Factor Powering Cable’s Relentless Rally
Through a global pandemic, Brexit, US political upheaval, and countless other storylines, there has been one constant in the FX market over the past 6-12 months: A relentless bid for GBP/USD.
After bottoming near 1.1500 as COVID fears peaked last March, the world’s third most-traded currency pair has rallied over...
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
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...
ECB Tries To Talk Yields Lower – Will Powell Do The Same Today?
Market movers today
The key event today is Fed chair Jerome Powell's semi-annual testimony before the Senate Banking Committee. We do not expect Powell to say anything new, as the Fed has said it very clearly that it will be very patient tightening monetary policy.
The UK jobs report...
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...
Lagarde: ECB closely monitoring evolution of longer-term nominal bond yields
In a speech, ECB President Christine Lagarde said the central bank's commitment to preserve favorable financing condition to support all sectors of the economy implies "looking at indicators along the whole transmission chain of our monetary policy – from risk-free rates to government borrowing costs to capital markets to...
The Focus For Global Trading Remains On The Repositioning On The Bond Markets
Markets
The global reflation trade showed signs of a metamorphose last week. Interest rates and cyclical commodities continued their ascent. Equities and the dollar showed some hesitation. Eco data again were only a secondary factor to guide those developing trends. Friday’s EMU February PMI’s didn’t bring a major surprise. Strength...
A Difficult Week
A rather downbeat week in the markets is ending on a more positive note, with US stocks opening a little higher and Europe heading for decent gains into the close.
Concerns about sharply rising yields appear to have abated for now, despite the fact that the direction of travel continues...
Weekly Focus – Rising Yields
This week was quiet in terms of data releases but still there were some interesting movements in financial markets. In the fixed income markets, long-term yields rose with the 10yr German government bond yields now trading at -0.33% up from -0.45% in the beginning of the week. US 10yr...
Sunset Market Commentary
Markets
European PMIs came in mixed with the manufacturing once again taking the lead over services. The euro area wide manufacturing PMI jumped from 54.8 to 57.7 (54.3 expected), the highest level since February 2018. The ongoing recovery came amid a surge in production, new orders and even a modest...