Global bond yields soften driving risk-on equity buying, dollar is mixed

Global bond yields soften driving risk-on equity buying, dollar is mixed

Global treasury yields are softer following last week’s dramatic rush higher. Investors are quickly back into risk-on mood, which is pushing prices higher for global stocks and commodities. The US dollar is mixed, weakening against the commodity-currencies and strengthening against the safe-haven currencies. Gold and oil are both slightly higher. There are plenty of economic data releases this week to start the month, and traders await comments by Fed Chair Powell on Thursday.

Monday: US ISM Manufacturing Purchasing Managers’ Index (Feb), US Construction Spending (Jan)

Tuesday: Canada GDP growth (Q4), Eurozone CPI (Feb), RBA monetary policy

Wednesday: US ISM Services Purchasing Managers’ Index (Feb), Federal Reserve releases Beige Book

Thursday: Eurozone Unemployment (Jan), OPEC meeting on output, Fed Chair Powell discusses economy

Friday: US Jobs Report (Feb), US International Trade Balance (Jan), Canada International Merchandise Trade (Jan)

  • FX Rates
    March 1, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar index is up slightly to start the week, strengthening against the safe-haven JPY and Swiss franc, and weakening against the commodity-currencies, (in order) Norwegian krone, Russian ruble, Canadian dollar and Mexican peso. US stocks are opening higher in line with generally higher global stock prices. US Treasury yields are steady (10yr at 1.42%), while global bond yields are generally lower. Traders await a slew of economic data this week as well as comments from several Fed officials.

    GBP

    Last week, the UK pound peaked at $1.4237 and then sold off below $1.40, its biggest down week so far this year. This morning, the UK pound is fairly steady, continuing to trade under $1.40. Traders await UK Chancellor of the Exchequer Rishi Sunak’s presentation of the nation’s budget on Thursday. He has promised to help support the economy for as long as the pandemic persists.

    EUR

    The euro has edged lower with little news to effect prices. Germany’s inflation rate for February was unchanged at 1.6%, as expected. German Retail Sales and Unemployment are released tomorrow.

    CAD

    The Canadian dollar is up about 0.50% on better demand for commodities and commodity currencies. Oil is trading at $61.50, up slightly over the weekend and ahead of Thursday’s OPEC meeting to discuss output. Traders also look forward to tomorrow’s GDP reading for December and Q4.

    ASIA/PACIFIC

    Australian bond yields fell as much as 32 bps after the Reserve Bank unexpectedly doubled the amount of bonds they normally purchase (QE) in order to curtail the recent rise in bond yields. The Australian dollar gained by nearly 0.5% on the news.

    The Japanese yen fell slightly with the reduced demand for safe-haven currencies in the risk-on market mood.

Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.

Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Dollar continues to ease as share prices rise

 

Dollar soft as equities rise

 

Daily FX Update: Dollar ends week positive

 

Daily FX Update: Dollar down four consecutive days

 

Daily FX Update; Dollar up after yesterday’s volatility

 

Daily FX Update: Dollar continues slide despite volatility