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Livesquawk - European Briefing - Monday 01.03
European Briefing - Monday 01.03
Headlines
  • Biden, Yellen Back Fast Senate Relief Action To Boost Economy
  • Covid Stimulus Bill Heads To Senate As Democrats Face Conflict
  • Democratic Senators Abandon $15 Minimum Wage Hike Plan B
  • Iran Rejects Invitation Of Direct Talks With US On Nuclear Deal
  • US Enlists Allies To Counter China’s Semiconductor Tech Push
  • Chinese Economic Recovery Slackens Amid Holiday Disruption
  • RBA Doubles Down Yield Defense Amid Global Bond Rebound
  • ECB To Prove Whether Cap Yields Pledge More Than Just Talk
  • EU’s Von Der Leyen Warns Must Prepare For Era Of Pandemics
  • UK Chancellor Hints At Tax Rises, Vows Maintain Virus Support
  • OPEC+ Faces Calls To Cool Oil Market Frenzy With Extra Barrels
  • J&J Covid Shot Gets CDC Panel Backing, Vaccine Near Shipping
Commentary
Bond Traders Brace For More Pain As Fed Speakers Line Up

The past week’s tumult in the $21 trillion Treasuries market has left shell-shocked traders positioned for even more losses ahead -- raising pressure on Federal Reserve officials to respond to the startling run-up in yields.

 

Momentum traders were, as of Thursday’s close, the most short on Treasuries since the 2013 taper tantrum episode, according to Jefferies International. Meanwhile, expected volatility is surging, a warning flag across asset classes, and the market is moving toward pricing in a Fed lift off from near zero in late 2022, at least a full year earlier than the central bank has signalled.

 

That’s the backdrop in which Fed Chairman Jerome Powell will deliver what are likely his final public comments before a mid-month policy meeting. A bevy of other officials are set to speak before he takes centre stage later next week. (BBG - Continue Reading)

US Enlists Allies To Counter China’s Semiconductor, AI Tech Push

President Biden portrays US relations with China as a clash of values: democracy vs. autocracy. But his rhetoric obscures the administration’s more pragmatic approach of cobbling together groups of countries to work jointly on technology.

 

The goal is to stay ahead of China in semiconductors, artificial intelligence and other advances that are expected to define the economy and military of the future. Preliminary conversations with US allies have begun, though the effort is expected to take months, said senior administration officials.

 

The strategy has both offensive and defensive components. By combining efforts, the US and its allies can vastly outspend China, whose research-and-development budget now nearly matches the US. (WSJ - Continue Reading)

Eurozone February Inflation Likely To Edge Higher, Raising Concerns

Eurozone consumer price growth is expected to show a slight increase in February, a scenario likely to further fuel inflation concerns about the impact of government and central bank promises of trillions in fiscal and monetary stimuli in Europe and beyond.

 

The flash reading for headline inflation in the Eurozone is expected grow to 1.0% in February after surging to 0.9% in January from -0.3% in the final month of 2020. Core preliminary inflation is projected to ease to 1.1% for February after jumping to a five-year high of 1.4% at the start of the year from a record low of -0.2% in December, its biggest move ever.

 

The return of the main inflation measure to positive territory after five months in the red followed sharp rises in food, alcohol, tobacco, and services, with one-offs contributing to the surprisingly strong increase. (LiveSquawk - Continue Reading)

Files & Links
DATA
APAC GOVERNMENT/CENTRAL BANKS
EUROPEAN/AMERICAS GOVERNMENT/CENTRAL BANKS
FX
FIXED INCOME
COMMODITIES/ENERGY
APAC EQUITIES
EUROPEAN/US EQUITIES