Archives of “February 27, 2021” day

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A look at the slate of Fed speakers next week

  
  Analysis

Will they speak about rising interest rates

Will they speak about rising interest rates
The Fed is in a tough spot. If they continue to say that the rise in bond yields is a sign of economic confidence or say nothing at all, then it’s a greenlight for more. Eventually that could truly tighten financial conditions.
On the other hand, if they come out and say they’ll buy more bonds, that’s an overreaction.
The trick may be somewhere in the middle, saying that they’re on guard against disorderly or rapid moves higher in yields and reiterating that it will be ‘some time’ before they taper. If that doesn’t work, they could try a WAM extension or at least hint that it’s in the toolbox.
Top officials will have plenty of opportunities to send a message in the week ahead.
Monday:
  • Williams
  • Brainard
  • Bostic,
  • Mester
  • Kashkari
Tuesday:
  • Brainard
  • Daly
Wednesday:
  • Harker
  • Evans
  • Beige Book
Thursday:
  • Powell in a Q&A with the WSJ

CFTC Commitments of Traders: Pound gets a bit of love

  
Analysis, Forex

Weekly forex futures positioning data for the CFTC for the week ending Tuesday, February 23, 2021:

CFTC Commitments of Traders GBP net chart
  • EUR long 138K vs 140K long last week. Longs trimmed by 2K
  • GBP long 31K vs 22K long last week. Longs increased by 1K
  • JPY long 29K vs 37K long last week. Longs trimmed by 8K
  • CHF long 12K vs 9K long last week. Longs increased by 3K
  • AUD short 2K vs 3K short last week. Shorts trimmed by 1K
  • NZD long 15K vs 14K long last week. Longs increased by 1K
  • CAD long 9K vs 8K long last week. Longs increased by 1K
The break higher in sterling finally resonated with speculators as they waded in. It will be interesting to see if it inches above last year’s high in the week-ahead report or if specs were rattled by the volatility this week.

Late selling sends US equities into the red despite bond market reversal

  
Analysis, US Market

Closing changes for the main North American indexes

Closing changes for the main North American indexes
Yields finished near the lows of the day and about 20 minutes before the close that looked like it was going to spill into equities as they quickly jumped but right at the end of the day there was some hard selling
  • S&P 500 -0.5%
  • DJIA -1.5%
  • Nasdaq +0.6%
  • Russell 2000 +1.0%
  • TSX Comp -0.7%
On the week:
  • S&P 500 -2.5%
  • DJIA -1.8%
  • Nasdaq -4.9%
  • Russell 2000 -2.0%
  • TSX Comp -1.5%
On the month:
  • S&P 500 +2.6%
  • DJIA +3.15%
  • Nasdaq +0.9%
  • Russell 2000 +7.0%
  • TSX Comp +4.8%