US Open Note – Dollar knocks down riskier currencies; House stimulus vote looming

Posted on February 26, 2021 at 2:15 pm GMT

Central banks react after yield rally It was a turbulent week for markets as the rapid rise in global bond yields triggered profit taking on stocks and harmed traditional safe-haven currencies, with the S&P 500 and Nasdaq set to close the week with considerable losses, though hold within the neutral-positive territory in monthly terms. Although investors got assurances from the Fed and other central banks that any tightening in monetary policy was long in the future, the yield rally over [..]

Week Ahead – NFP to guide yields, RBA could be a yawn, pound turns to UK budget for boost

Posted on February 26, 2021 at 2:03 pm GMT

As a new month starts, investors will have their eyes locked on the latest nonfarm payrolls numbers out of the United States amid an accelerating selloff in bond markets. The Reserve Bank of Australia’s policy meeting will be the only central bank gathering of the week but is unlikely to provide much excitement. Canadian Q4 GDP figures are also on the agenda but the upcoming output meeting by OPEC+ might matter more for the oil-dependent loonie. It will be somewhat [..]


US Open Note – Bond yields shine at fresh highs as US futures struggle; euro bulls gear up

Posted on February 25, 2021 at 2:11 pm GMT

Bond yields shrug of Powell’s comments; US future point to the downside Nothing could stop bond yields from rising on Thursday, not even the Fed chief Powell, who once again told lawmakers of the House of Representatives on Wednesday that a persistent rapid inflation break above 2.0% will not be the case for the next three years. While his remarks assured investors, who were front-running the Fed, that the current ultra-lose monetary policy is here to stay, the US 10-year [..]

With Powell out the way, dollar turns to data barrage – Forex News Preview

Posted on February 25, 2021 at 12:33 pm GMT

The testimonies by Fed chief Powell before Congress confirmed the central bank won’t overreact to any inflation episode but didn’t reveal anything new. The spotlight now falls on the next batch of US data at 13:30 GMT Friday. The dollar has stopped behaving entirely as a safe haven and has started to realign with US fundamentals, so every data point matters. Rising yields unable to lift dollar The mechanics governing the dollar are changing. After the crisis hit the greenback [..]

Technical Analysis – AUDUSD’s ascent conveys no near-term signs of waning   

Posted on February 25, 2021 at 10:14 am GMT

AUDUSD has climbed to a 3-year high tracing the upper Bollinger band and is currently tackling the 0.7988 high, stretching back to February 2018. Furthermore, the advancing simple moving averages (SMAs) are defending the prevailing bullish bias. The short-term oscillators are transmitting no signals of fading in the bullish momentum. The MACD, some distance in the positive region, is rising above its red trigger line. The RSI and the stochastic lines remain positively skewed as they are rising in overbought [..]

Global yields catch up with US Treasuries; has the dollar’s rebound been thwarted? – Special Report

Posted on February 24, 2021 at 2:54 pm GMT

A battle of the yields is underway as the returns on long-dated government bonds recover to pre-pandemic levels, undermining the allure of riskier assets such as stocks. The rally in bond yields is being led by US Treasuries, as the American economy shines the brightest in the Western sphere. However, while the US dollar got an unexpected leg up from the early stages of the surge in Treasury yields, the strengthening vaccine-led optimism is now spreading to other parts of [..]

Daily Market Comment – Yen and franc dive but stocks unable to sustain Powell bounce

Posted on February 24, 2021 at 10:28 am GMT

Safe-havens yen and franc plunge again as Powell boosts recovery hopes US stocks pull back from sharp dip but elevated yields continue to weigh Pound catapults to fresh highs; aussie, kiwi and loonie soar too Powell reassurance sends safe havens skidding Growing optimism about a vaccine-led recovery continued to reverberate through currency markets on Wednesday, steering riskier pairs to fresh highs, while pummelling traditional safe havens such as the yen and Swiss franc. The latest wave of positive outburst comes [..]


Aussie unlocks new highs ahead of Q4 capex – Forex News Preview

Posted on February 23, 2021 at 9:22 am GMT

The Australian dollar has been moving sharply higher against the US dollar over the last month as investors are waiting for the capital expenditure data for the fourth quarter on Thursday at 02:00 GMT ahead of the GDP figure on March 3.  In the meantime, the aussie is forming a positive structure on the back of the positive vaccine news, which have opened a pathway to a safe Australia. Private capital expenditure slumped by 3% q/q in the third quarter, the seventh consecutive quarter of decline, following a revised 7.1% fall in the previous release.  Through [..]


US Open Note – Wall Street could open with tears as bond yields weigh

Posted on February 22, 2021 at 2:16 pm GMT

Euro holds resilient above 1.2100; European stocks set for a negative close World shares kicked the week off on a negative note as the endless rally in bond yields made equity valuations look more stretched than they already are. Discussions about reopening plans in Europe created optimism that the vaccine rollout, although delayed, could put the region on a positive path, with investors turning somewhat sensitive to data releases for any early sign. Hence, the upside surprise in the German [..]

Daily Market Comment – Stocks under fire, dollar breathes as bond yields soar

Posted on February 22, 2021 at 9:41 am GMT

Relentless grind higher in bond yields bites stocks, stabilizes dollar Dollar becoming the US currency again, instead of a safe haven? Yen crumbles despite risk-off mood, sterling shines, gold adapts Bond market ruins the party in equities The non-stop rally in global bond yields has started to infect other asset classes, bringing the party in stock markets to a halt and breathing some life back into the devastated US dollar. There hasn’t been any major news, so this repricing appears to be [..]

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