Forex news from the European trading session - 2 March 2021
Headlines:
- Yields creep a little higher on the session
- Eurozone February preliminary CPI +0.9% vs +0.9% y/y expected
- Germany reportedly set to extend lockdown until 28 March
- ECB's de Guindos: If yields rise has negative impact on financing conditions, we are open to recalibrate
- Germany January retail sales -4.5% vs +0.3% m/m expected
- UK February Nationwide house prices +0.7% vs -0.3% m/m expected
- Germany reports 3,943 new coronavirus cases, 358 deaths in latest update today
Markets:
- AUD leads, CHF lags on the day
- European equities higher; E-minis down 0.2%
- US 10-year yields up 2.9 bps to 1.446%
- Gold up 0.2% to $1,729.05
- WTI up 0.2% to $60.80
- Bitcoin down 0.3% to $48,750
It is a bit of a mixed session as equities are seen slightly on the softer side, although US futures have trimmed losses while European stocks are trading a little higher, with bond yields creeping higher as we look towards North American trading.
Risk kept on the defensive earlier as China warned about bubbles and financial risks as the 'market froth is at risk of bursting'. That tempered with sentiment in Asia and the passiveness carried over to Europe in early trades.
European indices opened lower before turning higher while US futures started off at the lows, with S&P 500 futures down 0.5% before trimming that to be down 0.2% now.
Bonds were relatively calmer but are losing some ground in the past two hours with yields creeping higher. 10-year Treasury yields are near the highs at 1.446%.
In FX, the dollar held gains throughout but struggled to push the barriers with EUR/USD tracking below support from its 100-day moving average but holding at 1.2000.
USD/JPY is still hovering just below 107.00 while AUD/USD managed to retrace losses in a push up from 0.7750 to 0.7800 as the RBA kept policy more steady earlier on.
All eyes are still on the bond market but if the relative calm manages to establish itself for a few more days, perhaps the market may keep an open mind in reverting back to greed.
But even so, the mood remains rather delicate and a lot will ride on Fed chair Powell's speech on Thursday for further clues on how the week will end up being.
