Forex news from the European trading session - 16 February 2021
Headlines:
- Treasury yields extend higher ahead of North American trading
- ECB's Makhlouf: The big question is what happens next to retail habits
- Germany February ZEW survey current situation -67.2 vs -66.5 expected
- Japan vaccine czar says will begin vaccination rollout starting from Wednesday
- BOJ's Kuroda: We have no plan now to end ETF purchases
- BOJ's Kuroda: It will be hard for inflation to hit price target of 2% even by 2023
- China reportedly considering curbs on rare earth exports to cripple US defense sector
Markets:
- NZD leads, JPY lags on the day
- European equities mixed; E-minis up 0.6%
- US 10-year yields up 5.4 bps to 1.262%
- Gold flat at $1,818.00
- WTI up 0.6% to $59.85
- Bitcoin up 2.8% to $49,580
It is still all about the reflation narrative in the market as bonds sell off once again, with the moves looking rather extended in the Treasuries space as it plays catchup to the declines seen in European trading yesterday.
As such, we are seeing a further steepening and 10-year yields are pushing to 1.26% with 30-year yields towards 2.07% ahead of North American trading.
Despite that, equities kept calmer throughout with US futures pointing to modest gains despite a bit of a hiccup earlier on reported US-China tensions.
In the major currencies space, the yen is pinned lower but is at least off earlier lows with the dollar also bearing the brunt of the reflation push across the market.
EUR/USD moved up from 1.2140 to 1.2169 while GBP/USD kept a decent advance as it hovers around 1.3925-40 levels for the most part during the session.
AUD/USD pared early gains to 0.7780 at the start of European trading but is now lurking back towards 0.7800 as it nears the highs for the year.
Meanwhile, NZD/USD kept pace with a push to 0.7250-60 levels, trading at five-week highs, as buyers start to take a look towards the year's highs closer to 0.7300.
USD/JPY pared its early advance from 105.60 to 105.18 before inching back up as yields push higher now going into the session ahead. That said, price is still keeping just below its 200-day moving average @ 105.51 - a key level to watch this week.
