Archives of “March 2021” month

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Brazil’s central bank hiked its benchmark rate more than was expected

  
  Analysis
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A 75bp hike vs. the 50 that was widely expected from the Banco Central do Brasil.

  • BCB add that they expect to hike another 75bps at the following meeting
  • says it has initiated a partial normalisation process, reducing its extraordinary degree of monetary stimulus
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Despite with the FOMC and Powell tell us I think perhaps the BCB is providing a sneak preview of what is to come from the Fed prior to 2024. We’ll see.

Bank analyst says favours NZD, CAD, AUD after the dovish Fed

  
Analysis, Forex

A response to the Federal Open Market Committee and Powell’s press conference from an analysts at a bank that has to remain unnamed.

  • says the FOMC was more dovish than they expected
  • which supports risk appetite, commodity FX
  • weighs on the US dollar
  • on EUR/USD says risks more balanced, major headwinds in the eurozone … on balance today’s FOIMC reduces downside risk for the EUR
Hard to argue with any of that really, and markets are way ahead of this note with their response already.

A response to the Federal Open Market Committee and Powell's press conference from an analysts at a bank that has to remain unnamed.

China – US summit meeting coming up today, Thursday 18 March 2021

  
Analysis, Politics
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A high level US-China meeting is happening in Alaska today.

 

  •  China’s upper echelon diplomats will meet With Blinken and Sullivan

 

Unnamed sources with what is on the agenda on the Chinese side:

 

  • China is to propose a reversal of the Trump-era China policies
  •  China to propose lifting of US sanctions and restrictions on Chinese companies
  •  China will propose a Biden-Xi virtual meeting during the April climate summit

 

 

Wall Street Journal has more here (may be gated)

Dow and S&P close at record levels. NASDAQ erased its earlier declines

  
Analysis, US Market
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Major indices off highs as well

The Dow and S&P indices both closed at record highs after Fed Chair Powell and Fed continue to steer the soft policy course with not a lot of concern for inflation and expectations for stronger growth.

The final numbers are showing:
  • S&P index up 11.41 points or 0.29% at 3974.12. The high reached 3983.87. The low extended to 3935.74.
  • Nasdaq up 53.63 points or 0.4% at 13525.20. The high reached 13595. The low extended to 13272.69
  • Dow rose 189.42 points or 0.58% at 33015.37.  The high reached 33047.58. The low extended to 32782.18
some big gainers today included:
  • Alcoa, +7.72%
  • Celsius, +6.37%
  • Crowdstrike holdings, +6.18%
  • Transmedic, +5.91%
  • Draft Kings, +5.21%
  • General Motors, +5.15%
  • United Airlines, +4.43%
  • Roku, +4.31%
  • AMC, +3.92%
  • Micron, +3.72%
  • Tesla, +3.71%
  • Marriott, +3.56%
  • General Electric, +3.5%
  • Rackspace, +3.5%
  • Boeing, +3.26%
  • Caterpillar, +3.16%
  • American Airlines, +2.82%

big losers today included:

  • Uber, -4.25%
  • First Solar, -2.81%
  • Black Knight, -2.06%
  • Rocket, -2.0%
  • Under Armour, -1.71%
  • Palantir, -1.56%
  • FireEye, -1.49%
  • Rite Aid, -1.46%
  • CVS, -1.35%
  • Dollar Tree, -1.27%
  • Walgreens, -1.08%
  • target, -1.03%
  • Chewy, -1.0%
  • Mastercard, -1.0%
  • Intuit, -0.94%
  • Stryker, -0.93%
  • Snowflake, -0.78%
  • HomeDepot, -0.77%

US dollar drops and risk trades rally as Fed dots say no hikes until 2024

  
Analysis, Forex

Dollar falls around 40 pips across the board

Dollar falls around 40 pips across the board
The US dollar has slumped and risk assets are rallying after the FOMC statement and forecasts.
The latest dot plot shows 7 of 18 Fed members forecasting a rate hike (or more) in 2023. That means the majority still see no move higher through that year.
The immediate reaction was selling in the US dollar and buying equities. The S&P 500 went from -20 to +4 and the Nasdaq from -1.1% to flat. USD/CAD is down to 1.2440 from 1.2485. EUR/USD is up to 1.1950 from 1.1910.
It’s a uniform move across the board and is likely to be underscored by Powell in his press conference.
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