Archives of “March 2021” month

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PayPal to announce crypto checkout service

  
Analysis, BITCOIN

Bitcoin climbs to $59,000 on the headlines

The move sees PayPal allowing US customers to use their cryptocurrency holdings to pay online merchants globally, which could significantly bolster the usage of digital currencies in day-to-day transactions and commerce.

PayPal is to reveal that customers who hold Bitcoin, Ether, Bitcoin cash, and Litecoin in PayPal digital wallets will be able to convert their holdings into fiat currencies at checkouts in order to make purchases online. More from Reuters here.

Higher yields the main focus once again so far today

  
  Analysis

Bond sellers offer a reminder that they aren’t going anywhere just yet

USGG10YR
Hedge funds. Block trades. Liquidation. Risk management. It’s all an interesting story but a passable one in the grand scheme of things. Higher yields on the other hand, that is one that is tough to ignore since the start of the new year.
10-year Treasury yields are back up to above 1.75%, going back to pre-pandemic levels and while it may seem like the hard part is just beginning i.e. climb towards 2%, odds are the market is still willing to chase that given the Fed’s approach.
Sure, there’s still a need to observe higher inflation numbers and hotter economic data in the next few months. But for now, the market is still running with the same view over the past few weeks and that hasn’t changed post-FOMC meeting this month.
With the short-end of the curve still going nowhere, it plays exactly to the Fed’s liking.

 

USGG2YR

Eurozone March final consumer confidence -10.8 vs -10.8 prelim

  
  Analysis

Latest data released by Eurostat – 30 March 2021

  • Economic confidence 101.0 vs 96.0 expected
  • Prior 93.4
  • Industrial confidence 2.0 vs 0.0 expected
  • Prior -3.3; revised to -3.1
  • Services confidence -9.3 vs -14.9 expected
  • Prior -17.1; revised to -17.0

Optimism in the euro area continues to beat expectations as economic confidence rises slightly above the long-term average for the first time since the pandemic. Of note, Germany showed the largest improvement in sentiment with a jump of +7.9 to 103.7.

This reaffirms a more positive outlook towards 2H 2021 but the latest virus developments may still pour cold water on those expectations in the months ahead.

Treasuries selloff looks poised to extend further

  
  Analysis

10-year Treasury yields hit 1.75% again

USGG10YR

10-year yields are up 5 bps to 1.75% and breaking that will likely see the selloff in Treasuries gather more pace as traders will start to potentially eye the 2% level next.
With Biden’s spending plans among the focus this week as well, the market is resuming the selloff in Treasuries and it really is just not looking back since the turn of the year.
There has been a slight pullback after hitting 1.75% earlier in the month but the move was limited around 1.60% and here we are again.
One might still argue that the market is getting ahead of itself but with the Fed allowing a steeper for longer narrative, the path of least resistance is quite clearly set out.
Keep an eye on this space as we start to challenge key levels now. That may yet feed through to more dollar strength and yen weakness this week.

USD/JPY touches 110.00 for the first time in a year amid higher Treasury yields

  
  Analysis

USD/JPY hits 110.00 for the first time since 26 March last year

USD/JPY D1 30-03

The figure level will still offer a key battleground for buyers and sellers in the day ahead but keep your eyes on Treasuries for more clues. 10-year yields are up by nearly 4 bps to close in on the March highs just below 1.75% and that is pressuring the yen lower.

There are large expiries for USD/JPY layered at 110.00-20 rolling off tomorrow so that might still help to keep price action in-check ahead of the month-end, quarter-end.
But with the market eagerly awaiting more infrastructure spending plans by Biden and the Fed holding the steeper for longer narrative, we are quickly shifting back to another selloff in Treasuries and that is still among the key factors at play currently.

Bank of Japan Governor Kuroda talking again – global, Japan, economies showing signs of bottoming out

  
Analysis, Economy

Kuroda speech, sticking to his script and not adding anything new or surprising.

 

  • global economy showing signs of hitting bottom, Japan’s economy showing similar signs
  • impact of covid-19 on Japan’s economy to persist for prolonged period
  • Japan’s economy to experience clear, positive growth in fiscal 2021
  • risks to Japan’s economy, prices skew to downside
  • BOJ will take additional easing steps without hesitation if needed
  • says YCC exerting intended effect on economy
  • BOJ must stem any sharp rise in interest rates, have made tools available to do so in March review
  • BOJ must keep entire yield curve stably low while impact of pandemic continues

 

  • says steps taken at March review allow boj to promote powerful monetary easing even further
  • while it is taking time, it’s possible to achieve BOJ’s 2% inflation target by maintaining easy policy

 

 

This one ….

 it’s possible to achieve BOJ’s 2% inflation target 
It is also possible I will have a dinner date with Gigi Hadid, and it may take time. But don’t go basing any trades on that, K?

FTSE Russell to include Chinese sovereign bonds in its flagship bond index from starting later this year

  
  Analysis

This will prompt further large inflows into China.

  • Chinese government bonds (CGBs) will be included in the FTSE World Government Bond Index (WGBI) from the end of October
  • will be phased in over three years
  • Chinese government bonds were previously included in index suites from JPMorgan and Bloomberg Barclays, but FTSE WGBI inclusion is expected to have a larger effect due to the size of passive flows tracking it
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