Archives of “February 2021” month

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Four Fed speakers on the agenda for Wednesday 24 February 2021

  
  Analysis

At 1500 GMT Fed Chair Powell appears before the House Financial Services Committee to deliver the semi-annual monetary policy report. This will be a rehash of Tuesday’s testimony.

1530 GMT Fed Board of Governors member Brainard will be speaking, discussing the Bank’s maximum employment mandate in an event hosted by Harvard University, there will be both prepared text and a following Q&A.
1800 GMT the Fed’s Vice Chair Clarida will be discussing his views on the economic outlook and monetary policy. The venue is a virtual event hosted by the US Chamber of Commerce; prepared text and Q&A to follow.
2100 GMT Fed Vice Chair Clarida, yes again. Will discuss his economic outlook and monetary policy, yes again, at a virtual event hosted by the American Chamber of Commerce in Australia! Prepared text and Q&A.

AstraZeneca tells EU it expects to deliver less than half the COVID-19 vaccines it was contracted to supply in Q2

  
Analysis, COVID-19

Via Reuters info, citing an unnamed source, and EU official

  • AstraZeneca to deliver under 90 mln doses in Q2
  • Company had committed to supplying EU with 180 mln doses
  • AstraZeneca says it is working to increase productivity
  • Says it could make up the shortfall in Q3
Adds Reuters:
  • The expected shortfall, which has not previously been reported, follows a big reduction in supplies in the first quarter and could hit the EU’s ability to meet its target of vaccinating 70% of adults by summer. 
If this is correct it’ll be a negative for the EUR as recovery on the continent lags other areas of the globe.

Fed head Powell spoke Tuesday – recap “Toss out the college textbooks, because the world has changed”

  
  Analysis
Reuters have a recap posted that makes the points:
  • The unemployment rate? Forget it. The Fed only cares about the number of people working and how to get it higher
  • Inflation? Not a problem anytime soon. 
  • on U.S. infrastructure, Powell set aside classic concerns of hefty government borrowing driving up prices and responded “this is not a problem for this time as near as I can figure.”
Here is the link for more, good stuff and worth a read.

As Expected US Major indices close well off session lows

  
Analysis, US Market

NASDAQ closes lower for the 5th time in 6 trading days

S&P index and Dow industrial average moved higher on the day, but the NASDAQ continued its moved to the downside.

  • S&P index closed higher for the 1st time in 6 trading days
  • NASDAQ index closed lower for the 5th time in 6 trading days
  • Dow industrial average is now up for 3 consecutive days
The NASDAQ index although lower on the day by -0.5%, traded as low as -3.91%.
The final numbers are showing:
  • S&P index +4.87 points or 0.13% at 3881.37. The low price reached 3805.59. The high price extended to 3895.98
  • NASDAQ index fell -67.849 points or -0.5% at 13465.19. The low reached 13003.98. The high price extended to 13526.09
  • Dow industrial average rose 15.66 points or 0.05% at 31537.35. The low price extended to 31158.76. The high price reached 31653.38
  • The Russell 2000 was the worst performer today. It fell -19.76 points or -0.88% to 2231.31.  The low price reached 2169.078. The high price extended to 2248.41.

More from Powell: We will update 2021 GDP growth forecast to the range of 6%

  
  Analysis

Comments from Powell

  • Current forecast is 4.2%
Private forecasts have been rapidly rising given strong January data on stimulus (despite the pandemic surge in Jan).
  • Some parts of the commercial real estate market are under pressure, it’s not clear if that’s temporary or lasting
  • Watching commercial real estate very closely
  • Overall response to climate change has to come from elected officials
  • Repeats that Fed is in favor of standardized climate disclosures
  • Does not have an opinion on asset price bubbles
  • We expect ‘enthusiastic spending’ to boost inflation but it won’t be particularly large or persistent
  • Inflation risks are to the downside
There have been no signs whatsoever in this testimony that anything has changed or that Powell is any less dovish.

European indices end the session with mixed results

  
Analysis, Global Indices

Spain’s Ibex bucks the negative trend

The major European indices are ending the session with mixed results. Spain’s Ibex buck the trend with solid gains. France’s CAC and UK FTSE 100 is near unchanged. The German DAX is lower.

The snapshot of the provisional closes are showing:
  • German DAX, -0.7%
  • France’s CAC, +0.1%
  • UK’s FTSE 100, +0.1%
  • Spain’s Ibex, +1.5%
  • Italy’s FTSE MIB, -0.5%
In the benchmark 10 year note sector, yields are higher across the board with the Italian yields up the most at 4.4 basis points. German yields are up the least at 2.2 basis points.  France’s 10 year yield got closer to the 0.0% level. It’s high yield reached -0.030%.
Spain's Ibex bucks the negative trend
In other markets, US yields remain mixed with modest changes. The 5 year yield is down -2.4 basis points while the 30 year yield is up 1.1 basis points. The 2 – 10 year spread has narrowed modestly to 124.46 basis points from 125.44 basis points at the close yesterday.
US yields are mixed
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