Archives of “February 26, 2021” day

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G20 Finance Ministers and Central Bank Governors meet today, Friday 26 February

  
  Analysis

This is a virtual event, stay tuned for any headlines. The news conference at the conclusion is due at 1715 Central European Time

  • which is 1615GMT
The G20 members are:
  • Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States, and the European Union.
  • Spain is also invited as a permanent guest.
Yep, 21 of ’em.

EUR/USD 1.25 the line in the sand for the European Central Bank (but there’s a but …)

  
Analysis, Forex

BNY Mellon with the remarks on ECB euro sensitivity:

  • “If we really surge towards 1.25 by the March meeting, the ECB will absolutely push back. For now it’s just about manageable”
From an interview a BNY analysts on Bloomberg TV, stressing that the pace of the gain is more important than the level (hence the ‘surge’ comment).
More:
  • says the ECB will act if there is an undue tightening in financial conditions. For now its manageable
 —-
No stress right now for the ECb though, especially after the USD gains on Thursday (US time)

As Expected complete Bloodbath at #WALLTREET

  
Analysis, US Market

Closing changes in US equities:

Closing changes in US equities:
  • S&P 500 down 92 points to 3833 (-2.3%)
  • Nasdaq -3.3%
  • DJIA -1.6%
  • Russell 2000 -3.8%
The bond market is a mess:
  • 2s +5 bps to 0.17%
  • 5s +22 bps to 0.82%
  • 10s +15 bps to 1.53%
  • 30s +6 bps to 2.29%
There are a multitude of ways to spin this but this is a market that suddenly wants to reassurances from the Fed that they won’t let yields run too far too fast. There’s also very good argument that convexity hedging in the mortgage market combined with dealer selling after the auction is responsible for a good chunk of this move.
The good news is that the S&P 500 and Nasdaq both closed above Tuesday’s low. The bad news is that tomorrow is the PCE report and if inflation is high, those levels aren’t likely to hold.

US sells 7-year notes at 1.195% vs 1.151% WI

  
  Analysis

Results of the $64 billion sale

  • 4.4 bps tail
  • Bid to cover 2.04 vs 2.30 prior
This is a disastrous auction. The wheels are about to come off the bond market.
The belly is falling apart, US 5-year yields just hit 0.86% on a puke out.
bonds
Before the auction I read that today’s move was 6 standard deviations. It’s gotta be up to 8 or 10 now.
The vast majority of money in the bond market is slow-moving and there will be many bond holders pulling the plug in the day ahead.

Italy reports the most new covid cases since January 9

  
Analysis, COVID-19

Uptick in cases?

I wrote earlier about the potential for another wave in cases. Today Italy reported 19,866 new cases, which is up from 16,424 a day ago and is the most since January 9.
Uptick in cases?

The US and a few other countries can seemingly plow through high cases and deaths but much of the developed world will shut down again (or stay shut down) if/when cases rise. The vaccine timeline is also longer.

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