Federal Reserve Chairman Jerome Powell will probably seek to convince suddenly skeptical financial markets on Thursday that the central bank will be ultra-patient in pulling back its support for the economy after the pandemic has ended. Rather than trying to cap rising long-term interest rates, Fed watchers expect Powell to use his appearance at a Wall Street Journal webinar to reaffirm the Fed’s determination to meet its revamped employment and inflation goals by keeping monetary policy looser for longer, and to make clear he’d like to avoid a repeat of last week’s disorderly bond market.

“It’s not an issue of trying to talk down the market,” said JPMorgan Chase & Co. chief U.S. economist Michael Feroli. “But you do want interest rates to be aligned with the Fed’s objectives.” That’s important for the economy’s long-run health. If the markets and the Fed are in sync, they’ll work together to attain the central bank’s objectives of maximum employment and 2% average inflation under its new strategic framework.

Long-term interest rates have climbed this year -- the yield on the Treasury’s 10-year note was 1.48% at 4:50 p.m. in New York Wednesday, up from under 1% at the start of 2021 -- as more widespread dissemination of vaccines to fight the virus and the promise of stepped-up government spending has fanned expectations of much faster economic growth ahead.

(Bloomberg – Continue Reading)

LONDON — A group of some of the world’s most powerful oil-producing nations will meet on Thursday to discuss the next phase of production policy amid the ongoing coronavirus crisis. OPEC and its non-OPEC partners, an energy alliance sometimes referred to as OPEC+, will convene via videoconference from 1 p.m. London time. A press conference is scheduled to take place following the conclusion of the meeting.

Analysts broadly expect OPEC+ to reverse some of the output cuts it made last year, although oil prices climbed higher on speculation that the group may decide against increasing supply.  International benchmark Brent crude futures traded at $64.34 a barrel during morning deals, up more than 0.4%, while U.S. West Texas Intermediate (WTI) crude futures stood at $61.48, around 0.3% higher.

Crude futures have soared to pre-virus levels in recent weeks, driven higher by substantial OPEC+ production cuts and the mass rollout of Covid-19 vaccines in many high-income countries. OPEC’s de facto leader Saudi Arabia has publicly encouraged allied partners to remain “extremely cautious” on production policy, warning the group against complacency as it seeks to ensure a full oil market recovery.

(CNBC - Continue Reading)

The labour market in the world’s largest economy is poised to exhibit renewed strength on Friday as more American states lift pandemic restrictions on businesses. February’s non-farm payrolls are expected to show a jump of 180,000 versus the 49,000 increase in January, according to an economists’ poll. The unemployment rate likely held steady at 6.3% last month, the poll predicted.

“We expect positive employment growth but not a significant rebound, so overall employment will remain subdued,” Danske Bank said. “Restrictions have been eased gradually but the pandemic is not over.” Private payrolls in the US increased by 117,000 in February, ADP reported Wednesday, a number that was well short of analysts' expectations of a rise of more than 200,000.  

ING said the end of California’s stay-at-home order in late January could support the headline non-farm payrolls number beyond market expectations with growth as high as 200,000 “With thousands of businesses allowed to reopen or operate at a higher capacity in the US’s most populous state, this should translate into some decent job creation, although it may be more reflected in the March report given the data collection cut-off point was the week of 12 February.”

(LiveSquawk – Continue Reading)