Former French President Sarkozy found guilty of corruption, sentenced to prison

Sarkozy going to jail

Sarkozy going to jail
Former French President Sarkozy was found guilty of corruption and sentenced to 3 years in prison, two of which are suspended.
The 66-year-old politician was convicted of trying to illegally obtain information from a senior magistrate in 2014 about a legal action in which he was involved.
The evidence was a wiretap in which Sarkozy promised a judge a job in exchange for leaking information about another legal case, known by the name of France’s richest woman, L’Oreal heiress Liliane Bettencourt.
In one of these phone calls with a co-accused, Sarkozy said of the judge: “I’ll make him move up … I’ll help him.”

Germany reportedly set to extend lockdown until the end of March

Business Insider reports on the matter

Adding that German authorities are also mulling loosening lockdown measures a little more but general restrictions should still apply through to the end of the month.
For some context, the current restrictions are set to run through to 7 March but the government and state leaders are to meet later this week (on 3 March) to reach a decision on how to proceed next.
Just take note though that some regions are trying to push forward with easing of restrictions as the lockdown since November is growing more weary by the day. As of this week, hair salons, hardware stores and flower shops are able to open in certain states.

Heads up: Fed speakers coming up later in the day

Fedspeak is going to be a hot topic in the market this week

Here’s the agenda for today:
1400 GMT – Fed’s Williams speaks at a virtual conference
The conference is hosted by the NY Fed and Williams will be delivering opening and closing remarks at the event. His opening speech is expected to be for 5 minutes only as the event will cover “Diversity, Equity & Inclusion and Culture”. Not quite the stage for specific policy remarks but just take note in any case.


1405 GMT – Fed’s Brainard delivers keynote address at an IIB event
Brainard will be speaking for about 30 minutes at the annual IIB conference, where the event will cover on “the most pressing issues facing the international banking community in the United States”. This doesn’t exactly fall in the realms of policy talk but given recent developments, she might make offer up a couple of remarks.
1900 GMT – Fed’s Bostic, Mester, Kashkari participates in a virtual event
There is a lot going on with this one as it involves different timings, but the event itself begins at 1900 GMT and will stretch on to 2100 GMT. Bostic, Mester, Kashkari will all be participating as moderators for some discussions and be part of the panel themselves in a separate discussion at 2040 GMT. The agenda can be found here, with the event covering “Racism and the Economy: Focus on Housing” – discussing ‘policy proposals for dismantling the deep inequities in housing market valuation, mortgage lending, and patterns of housing development’. Not really the stage for policy talk but just take note in case.

US Treasury yields tick higher ahead of North American trading

10-year yields up over 4 bps to near 1.45%

At the start of European morning trade, it was holding around 1.40%. Meanwhile, 30-year yields are up by over 7 bps on the day and closing in on 2.23%.
Despite the market keeping the calm and equities are firmer so far, this remains a key spot to watch in case it causes negative spillovers like what we saw last week.
  • S&P 500 futures +1.0%
  • Nasdaq futures +1.2%
  • Dow futures +0.9%
  • Russell 2000 futures +2.0%
For now, US futures are hoping that ignorance is bliss but we will see how Wall Street takes to this in the session ahead. As mentioned earlier, if it starts to become a little messy, things can turn pretty quickly in the other direction today.

Hang Seng adopts sweeping changes to Hong Kong stock benchmark

The number of constituents in the Hang Seng index will increase from 52 to 55 starting from 15 March and ultimately fix at 100 eventually

The index constituents are expected to gradually increase to 80 through regular reviews by mid-2022 and be fixed at 100 ultimately.
Other changes that will be adopted, via Bloomberg:


The 8% weightage cap will lessen the impact of Tencent and HSBC slightly but those two are likely to still be the dominant shares in the index for a while.

European bond yields fall further on the session

The invisible hand at play?

Italian 10-year yields are now down 8 bps to 0.69% while Germany 10-year yields are down 5 bps to -0.31% in European morning trade.
This goes against the backdrop of Treasury yields pushing a little higher so far on the session, with 10-year yields up from 1.40% earlier to 1.43% currently.
Going back to Europe, perhaps the ‘invisible hand’ i.e. ECB intervention is what is helping to exude calmer tones in the market. That is something to consider after policymakers had talked up the potential to accelerate PEPP purchases if need be.
We already also saw the RBA double-down on QE today to try and address the issue while the BOJ also offered a bit of a warning earlier in the session here.
The ball is now in the Fed’s court as to whether they will mention anything this week, with Powell’s speech on Thursday going to be a key one to watch.

BOJ prepared to quell risk of yields rising too much ahead of policy review – report

Bloomberg reports on the matter

The report says that the BOJ is still prepared to defend its yield target range if bond yields rise too much ahead of their policy review later this month, and could even act before 10-year yields hit 0.20%, according to people familiar with the matter.


The BOJ doesn’t exactly have a preset level of when to enter the market as it depends on the pace of the moves, the level and main reasons behind such a surge in yields.
But this looks to just a bit of a warning after the absence of the BOJ on Friday when 10-year yields hit a five-year high of 0.175% left some quarters of the market wondering if they will sit on their hands until the policy review on 19 March.
The sources in the report say that the BOJ will not allow yields to hit 0.30% ahead of the review as that will raise doubts over YCC credibility. For some context, the BOJ has a rather loose rule about letting yields fluctuate 20 bps in and around 0%.
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