Forex news for New York trading on Feb 22, 2021:
- ECB's Lagarde: ECB closely monitoring evolution of longer-term yields
- BOE's Vlieghe says we may not see rates similar to before financial crisis in my lifetime
- ECB's Villeroy says no risk of lasting pickup in inflation
- EU to urge G20 not to withdraw fiscal stimulus too early - report
- Fed's Kaplan: Epidemiologists have warned we could face one more Covid surge
- Iran's Khamenei says won't abandon stance on nuclear deal
- UK releases reopening timeline with schools set to open March 8
- UK officials say virus infections drop 70% 21 days after first Pfizer dose
- Dallas Fed Feb manufacturing index +17.2 vs +8.5 expected
- Statistics Canada backtracks on change to core inflation released just 5 days ago. Publishes big revisions
- Chicago Fed Jan national activity index +0.66 vs +0.52 prior
Markets:
- Gold up $24 to $1808
- US 10-year yields up 2.7 bps to 1.36%
- S&P 500 down 30 points to 3876 with tech badly lagging (NQ -2.5%)
- WTI crude up $2.25 to $61.50
- AUD leads, CHF lags
Commodities are booming and tech is busting, we've gone from 1999 to 2003 in a few weeks.
There are divergent themes all over markets but rising yields and inflation are overshadowing everything else. There was an initial pop in yields in Asia/Europe but they were reeled in early in New York before a second wave hit late.
There's a reflexivity between bonds and other markets that's dominating. The dollar was solid early but slumped hard when yields reversed lower, only to get a small late lift on another risk averse move.
The winner continues to be cable, which shook off some long timelines on reopening and hit a long-term high of 1.4086 before giving back a quarter-cent late.
The dollar sag even extended to USD/JPY, which fell 80 pips from the Asian highs and briefly fell below 105.00 before finishing on the lows.
The big story was also a brief one was bitcoin crumbled to $46,616 in minutes and then bounced all the way back to $54,000 in a wild trip that's reminiscent of the many big swings in bitcoin before. The rebound is impressive.
