Global equites lower on rising US bond yields, dollar mixed
Rising inflation expectations and US bond yields firming back up near 1.50% are causing consternation amongst global equity investors. Asian equities were generally 2-3% lower and European equities were 0.5-1% lower. US equities are opening slightly lower following higher jobless claims than the previous week. The dollar is mixed against its peer currencies, the commodity currencies are outperformers. Traders await today’s results of the OPEC+ meeting and comments from Fed Chair Powell, and tomorrow’s US employment report for February.
March 4, 2021
EUR/USD 1.2039 GBP/USD 1.3973 USD/CAD 1.2646 AUD/USD 0.7786 USD/JPY 107.45 USD/CNH 6.4688 USD/ILS 3.3087 USD/MXN 20.8079 USD/CHF 0.9240 USD/INR 72.8375 USD/BRL 5.6067 USD/SGD 1.3319 USD/DKK 6.1767 USD/SEK 8.4406 USD/NOK 8.5028
The dollar is mixed overnight: commodity currencies – the Canadian and Australian dollars, and the Norwegian krone - outperformed vs the USD. Safe haven currencies underperformed – the Swiss franc and Japanese yen. Jobless claims were slightly higher than the previous week, but Nonfarm Productivity, although negative, was better than expected. Traders await comments from Fed Chair Powell who will probably reassure markets that the Fed will remain patient in tapering monetary stimulus and QE until the pandemic has ended.GBP
Chancellor Rishi Sunak’s budget announcement indicated he will continue to focus on stimulus for the economy, and not address the record budget deficit for another two years. The UK pound moved little, and remains within a tight 1.3850-1.40 trading range in place over the last week.EUR
The euro is lower on the day, but remains above 1.20. EZ Unemployment for January held steady at 8.1%, but was better than expectations of 8.3%. Retail Sales were down 5.9% in January, much worse than both the previous month’s +1.8% and expectations of -1.4%.CAD
The Canadian dollar was the top performing currency overnight, but only gained 0.25%. Traders await the outcome of OPEC+ (plus Russia), with production output the key topic.ASIA/PACIFIC
The Japanese yen was the weakest performer overnight, dropping nearly 0.5% versus the dollar. The USD/JPY surged to fresh highs near 107.50, its highest level since last July. Demand for a JGB 30-year auction drew the weakest demand in nearly five years.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
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.
Thank you for subscribing to SVB's Daily FX Update.
You're almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. Please add us to your trusted list of senders, contacts or address book.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
This article is intended for U.S. audiences only.
©2021 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.