Archives of “January 8, 2021” day

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US dollar edges higher after upbeat comments from Clarida

  
Analysis, Forex

Treasury yields to the highs of the day

US 10-year yields:
Treasury yields to the highs of the day
Clarida said the outlook for the US economy is improving and the market sees that as a sign that the 2024 timeline to raise rates is unrealistic.
Clarida coupled it with a comment that tapering bond buyers is ‘well down the road’ but let’s not forget that last month the Fed was talking about buying more bonds so the communication can change quickly.
He’s certainly not leaning against the 20 bps rise in 10-year notes this week. He underscored that by saying he’s not concerned by the levels of Treasury yields.
I think we’ll be finding out if he’s concerned when they hit 1.2% or 1.5%.
With the rise in yields the market is continuing to flirt with buying the US dollar.

The PBOC has (gently) tapped on the brakes of yuan appreciation

  
Analysis, Forex

Noting some subtle nudges from the People’s Bank of China in recent days and weeks which are indicative of their desire to slow the rate of gain for the Chinese currency but slowing capital inflows:

  • yesterday the POBC lowered its macro-prudential adjustment factor for companies cross-border financing – essentially reducing the capacity of domestic companies to borrow overseas (by 20%)
  • has curbed financial institution USD borrowing
  • raised the cap for local companies to lend to affiliates abroad
Looking ahead the banks has a few other tools in the box, eg:
  • increasing the QDII quota for overseas investments
  • procedural restrictions on the annual $50,000 quota for residents to buy foreign currencies could be relaxed
 Noting some subtle nudges from the People's Bank of China in recent days and weeks which are indicative of their desire to slow the rate of gain for the Chinese currency but slowing capital inflows:

Boeing to pay more than $2.5bn over DOJ 737 Max fraud charges

  
  Analysis

The US Department of Justice on Boeing 737Max charges

  • criminal fraud charges against Boeing for its role “impairing, obstructing, defeating and interfering with” the FAA’s attempts to properly certify the 737 Max and its faulty software program
  • Boeing has already come to a deal to lessen the charges to the criminal fraud indictment and has received “partial credit for its cooperation.”
The US Department of Justice on Boeing 737Max charges

NASDAQ and surges 2.6%. The largest one-day gain in 2 months

  
Analysis, US Market

Dow, S&P, NASDAQ, Russell 2000 all closed at record highs

The major indices are all closing at record highs.

  • THe Dow industrial average closed above 31,000 for the 1st time ever.
  • The NASDAQ index close above 13,000 for the 1st time ever.
  • The NASDAQ index surged by 2.6% which is the largest one-day gain in 2 months

The final numbers are showing:

  • S&P index rose 55.65 points or 1.48% at 3803.79
  • NASDAQ index rose 326.68 points or 2.56% at 13067.48
  • Dow industrial average rose 211.73 points or 0.69% at 31041.13
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