Archives of “March 2021” month

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Yields flatten out as New York trade picks up

  
  Analysis

Treasury market now virtually unchanged

Treasury market now virtually unchanged
Treasury yields had pushed lower earlier in the day on risk aversion and speculation about Powell offer (at the very least) a dovish hint.
The peak of the move was US 10s falling 4 bps to 1.44%. They’ve since risen back to unchanged on the day at 1.48% with most of that coming in the past hour.
Given Evans’ comments yesterday and other Fed commentary in the past week, the main risk is that Powell says nothing and highlights the move higher in rates as driven by economic optimism. If that’s the case, then we could see yields begin a climb back to 1.60%.

Oil climbs as key OPEC+ members highlight ongoing uncertainty

  
  Analysis

Comments at the open of the OPEC+ meeting

Comments at the open of the OPEC+ meeting
Comments in the public part. They’ll soon head into private deliberations
  • Urges ‘caution’ and ‘vigilance’
  • Uncertainty of oil-market recovery persists
  • OPEC+ and Saudi cuts have accelerated rebalancing
Russia’s Novak:
  • Oil market hasn’t fully recovered yet we are in a better place
WTI crude is at the highs of the day, up $1.20 to $62.47. The market is reading the signals about ‘caution’ and keeping powder dry as a sign that OPEC won’t flood the market.
There’s still so much uncertainty about today’s meeting but this strong market response so far indicates to me how much money is on the sidelines and waiting to pile into oil.
Update: Oil journalist Reza Zandi writes: “An informed source just said that some in the OPEC+ are concerned that Russia might ask for an increase bigger than 500 thousand bpd for April 1st, and to that end pressure others. Novak too emphasized the good conditions in the market.

Treasury yields retreat slightly to start the session

  
Analysis, Global Indices

10-year Treasury yields fall by nearly 2 bps to 1.461%

USGG10YR

Risk sentiment is keeping on the defensive going into European trading but there’s an air of calm in the bond market and the market focus may shift towards that, or at least the capitulation in equities may hit the pause button for now.

The bond market is eyeing Fed chair Powell’s speech later today and with the possibility of a pushback, the rise in yields this week is at least stalling for the time being.
Over to equities, we are also seeing US futures pare losses further with both S&P 500 futures and Nasdaq futures being down by just 0.2% currently.

Commodity currencies bounce back after softer start to the day

  
  Analysis

AUD/USD moves to session highs of 0.7810

AUD/USD H1 04-03

It may be a meltdown in Asian equities but the mood going into Europe may see the focus shift towards the calmer tones in Treasuries so far today. After the spike higher yesterday, 10-year yields are settling down 1 bps @ 1.47% for the time being.
The bond market may be tentative ahead of Fed chair Powell’s speech but such relative calm may also help keep equities and risk sentiment from capitulating altogether.
While stocks are still on the defensive, we are seeing a modest bounce in major currencies with the aussie, kiwi and loonie up to session highs for the day as the dollar gives up some ground from the start of trading today.
AUD/USD is back above 0.7800 as price action sits in between its key hourly moving averages @ 0.7776-46 at the moment. As such, the near-term bias is more neutral.
Elsewhere, USD/CAD is trading back just under its 100-hour moving average @ 1.2645 with oil prices keeping buoyed at around $61.65 ahead of the OPEC+ decision today.

Nikkei 225 closes lower by 2.13% at 28,930.11

  
Analysis, Global Indices

The Nikkei falls to near one-month lows

Nikkei 04-03

A rough day for Asian equities as the decline in US stocks yesterday, as well as US futures today, is keeping risk sentiment in a rough spot at the moment.

Of note, the Nikkei also closes below a key trendline support and that might see sellers keep the momentum. But a lot will ride on Fed chair Powell’s speech later today.
Elsewhere, the Hang Seng is down 2.4% and the Shanghai Composite down 2.1%. Meanwhile, S&P 500 futures are down 0.5% and Nasdaq futures down 0.8%.

The US issues an emergency warning on Microsoft email software

  
  Analysis

The hack attack on Msoft has been in the news for a few days, now an official US government alert issued.

  • Microsoft says that a sophisticated group of hackers linked to China has exploited its popular email service that allowed them to gain access to computers.
There are plenty of other sources of the news, like I said, this has been about for a few days.
Obviously this is not FX but something to be aware of regardless, especially if you may be vulnerable.

Its a big day coming up Thursday – Federal Reserve Chair Powell speaking

  
  Analysis

After a more or less dead Asia session on Wednesday I was speaking with someone who reminded me Powell is to speak on Thursday.

Oh nos …. this could put a dampener on the session here also (typing this with hopes its a ‘famous last words’ sort of thing).
Fed Chair Powell speak Thursday 4 March 2021
  • at 17.05 GMT
  • at a Wall Street Journal event
  • he will be discussing the US economy
  • he will not speak from a prepared text, its a Q&A session
I suspect he will stick very much to his recent script and we will not get anything at all new from him. So don’t hold back today, no need to wait!
After a more or less dead Asia session on Wednesday I was speaking with someone who reminded me Powell is to speak on Thursday.
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