Focus Remains On Yields Ahead Of US Jobs Report

Fundamental analysis of Forex market


  • Global bond yield rally fuels concerns and curbs risk appetite.
  • Traders note the lack of a well-defined red line being set by the Fed had convinced many that key interest rates would likely continue to rise
  • BOJ’s Kuroda helped JGB yield to recover after stressing the need to keep bond yields ‘stably low’ ‘
  • Focus turns to US jobs report


  • BOJ Gov Kuroda stated that would likely debate whether to expand implicit band for 10-year JGB targets, more discussion needed before final decision; Introduction of negative rates helped lower yield curve. Did not think it is necessary nor appropriate to widen band along BoJ’s long-term rate target. Added that now was the time to keep yield curve stably low as COVID-19 was still affecting economy. Higher bond yields would reduce impact of monetary easing
  • National People’s Congress (NPC) Premier Li set its 2021 GDP Target >6% and CPI Target ~3.0%; Aimed for Urban Unemployment Rate of around 5.5%. Govt to maintain proactive fiscal policy and prudent monetary policy


  • Total global cases 115.6M (+0.4% d/d); total deaths: 2.57M (+0.4% d/d)


  • EU said to be prepared to launch legal action against Britain ‘very soon’ over Northern Ireland. To launch legal action against Britain after the UK moved unilaterally to extend grace periods for Northern Irish supermarkets by six months
  • Fed Chair Powell stated that in order to consider raising interest rates, Fed would need to see maximum employment, inflation at 2% and headed above that; Fed would not raise rates until these conditions were fulfilled. concerned by disorderly conditions in markets or a persistent tightening in financial conditions
  • Senate voted to start the debate on the Covid-19 relief bill, VP Harris casted the tie breaking vote to get the procedure rolling.
  • Congressional Budget Office (CBO) issued its 30-year budget projections. It raised its forecasts annual GDP growth over next 30 years from 1.6% to 1.8%. Found stimulus bill to be within budget limit. National debt was likely to nearly double to 202% of GDP by 2051,


  • OPEC+ confirmed Saudi to extend its 1M bpd voluntary cut into April; Russia allowed to increase production by 130K bpd, Kazakhstan allowed 20K bpd hike

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -0.58% at 409.48, FTSE -0.19% at 6,638.36, DAX -0.72% at 5,788.83, CAC-40 % at #, IBEX-35 -0.38% at 8,322.00, FTSE MIB -0.09% at 23,071.50, SMI -0.83% at 10,661.36, S&P 500 Futures -0.41%]
  • Market Focal Points/Key Themes: European indices open lower across the board but recovered somewhat as the session wore on; one sector trading in positve being energy, supported by results of OPEC+meeting; sectors leading to the downside include technology and consumer discretionary; French retail space under pressure following closure announcement by government; ICT receives takeover offer from consortium; Norsk Hydro to sell Rolling business; earnings expected during the upcoming US session include Global Partners and Big Lots


  • Consumer discretionary: Aggreko Plc [AGK.UK] +1.5% (offer)
  • Consumer staples: Corbion [CRBN.NL] -9% (earnings)
  • Energy: Norsk Hydro [NHY.NO] +1.5% (sells unit)
  • Financials: London Stock Exchange [LSE.UK] -5% (earnings)
  • Industrials: Dassault Aviation [AM.FR] -3% (earnings)
  • Technology: ICT Group [ICT.NL] +29% (earnings)
  • Materials: Aggreko Plc [AGK.UK] +1.5% (offer)


  • Russia Foreign Ministry stated that it would respond soon to latest US sanctions
  • Russia Govt spokesperson stated that was planning for various sanction scenarios and hoped the US did not sanction business tycoons

Currencies/Fixed Income

  • USD continued to firm in the session aided by higher bond yields in the aftermath of Fed Chair Powell’s comments on Thursday. Overall the take was that the Fed was not concerned about rising bond yields as the Fed chair stuck to his stance of keeping interest rates low for a long time. Dealers cited that the lack of a well-defined red line being set by the Fed had convinced many that key interest rates would likely continue to rise,
  • EUR/USD fell to a 3-month low at 1.1930 and was facing some technical damage for the week.
  • USD/JPY was higher at 108.50 for a 9-month high in the pair

Economic data

  • (SE) Sweden Feb Maklarstatistik Housing Prices Y/Y: 15% v 13% prior; Apartment Prices Y/Y: 6% v 7% prior
  • (ZA) South Africa Feb Gross Reserves: $53.8B v $55.0Be; Net Reserves: $51.6B v $52.0Be
  • (DE) Germany Jan Factory Orders M/M: 1.4% v 0.5%e; Y/Y: 2.5% v 1.9%e
  • (MY) Malaysia End-Fed Foreign Reserves: $109.0B v $109.7B prior
  • (TH) Thailand End-Feb Foreign Reserves: $B v $256.8B prior
  • (CN) Weekly Shanghai copper inventories (SHFE): 163.0K v 148.0K tons prior
  • (FR) France Jan Trade Balance: -€4.0B v -€3.4Be; Current Account Balance: -€1.6B v -€1.0B prior
  • (CH) Swiss Feb Foreign Currency Reserves (CHF): 914.2B v 896.8B prior
  • (AT) Austria Q4 Final GDP Q/Q: -2.7% v -4.3% prelim; Y/Y: -5.7% v -7.8% prelim
  • (AT) Austria Feb Wholesale Price Index M/M: 1.5% v 2.1% prior; Y/Y: +2.2% v -0.1% prior
  • (HU) Hungary Jan Industrial Production M/M: +0.2% v -2.7% prior; Y/Y: -2.8% v -3.5%e
  • (RU) Russia Narrow Money Supply w/e Feb 26th (RUB): 13.73T v 13.81T prior
  • (TW) Taiwan Feb Foreign Reserves: $543.3B v $541.5B prior
  • (UK) Feb Halifax House Price Index M/M: -0.1% v 0.0%e; Y/Y: 5.2% v 4.6%e
  • (SE) Sweden Feb Budget Balance (SEK): 47.3B v 7.7B prior
  • (SE) Sweden Q4 Current Account Balance (SEK): 57.4B v 70.2B prior
  • (CZ) Czech Feb Unemployment Rate: 4.3% v 4.3% prior
  • (IT) Italy Jan Retail Sales M/M: -3.0% v -0.5%e; Y/Y: -6.8% v -3.2% prior
  • (GR) Greece Q4 Q/Q: 2.7% v 3.1% prior, Y/Y: -7.9% v -10.5% prior

Fixed income Issuance

  • (IN) India sold total INR232.0B vs. INR310B indicated in 2022, 2025, 2030 and 2033 bonds
  • (ZA) South Africa sold total ZAR380M vs. ZAR2.0B target in I/L 2029, 2038 and 2050 Bonds

Looking Ahead

  • (UR) Ukraine Feb Official Reserve Assets: $28.7Be v $28.8B prior
  • 05:10 (EU) Daily ECB Liquidity Stats
  • 06:00 (IE) Ireland Q4 GDP Q/Q: No est v 11.1% prior; Y/Y: No est v 8.1% prior
  • 06:00 (IE) Ireland Q4 Current Account Balance: No est v €12.7B prior
  • 06:00 (IE) Ireland Feb Live Register Monthly Change: No est v -4.2K prior; Live Register Level: No est v 190.5K prior
  • 06:00 (UK) DMO to sell £3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.0B respectively)
  • 06:30 (IN) India Weekly Forex Reserve w/e Feb 26th: No est v $583.7B prior
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (IN) India announces upcoming bill issuance (held on Wed)
  • 07:00 (BR) Brazil Jan Industrial Production M/M: 0.4%e v 0.9% prior; Y/Y: 2.0%e v 8.2% prior
  • 07:00 (MX) Mexico Dec Gross Fixed Investment: -10.2%e v -12.1% prior
  • 07:00 (MX) Mexico Feb Vehicle Production: No est v 278.7K prior; Vehicle Exports: No est v 223.5K prior
  • 07:00 (CL) Chile Jan Nominal Wage M/M: No est v 0.4% prior; Y/Y: No est v 4.0% prior
  • 08:00 (RU) Russia Feb Official Reserve Assets: $592.3Be v $590.7B prior
  • 08:00 (PL) Poland Feb Official Reserves: No est v $157.3B prior
  • 08:00 (PL) Poland Central Bank (NBP) Feb Minutes (two meetings ago)
  • 08:00 (BR) Brazil Feb Vehicle Production Anfavea: No est v 199.7K prior; Vehicle Sales: No est v 171.2K prior; Vehicle Exports: No est v 25.0K prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) Feb Change in Nonfarm Payrolls: +200Ke v +49K prior; Change in Private Payrolls: +200Ke v +6K prior; Change in Manufacturing Payrolls: +15Ke v -10K prior
  • 08:30 (US) Feb Unemployment Rate: 6.3%e v 6.3% prior; Underemployment Rate: No est v 11.1% prior; Labor Force Participation Rate: No est v 61.4% prior
  • 08:30 (US) Feb Average Hourly Earnings M/M: 0.2%e v 0.2% prior; Y/Y: 5.3%e v 5.4% prior; Average Weekly Hours: 34.9e v 35.0 prior
  • 08:30 (US) Jan Trade Balance: -$67.5Be v -$66.6B prior
  • 08:30 (CA) Canada Jan Int’l Merchandise Trade (CAD): -1.4Be v -1.7B prior
  • 09:00 (UK) BOE’s Haskel participates on a Panel
  • 09:30 (TR) Turkey Feb Cash Budget Balance (TRY): No est v -26.1B prior
  • 10:00 (CA) Canada Feb Ivey Purchasing Managers Index (seasonally adj): No est v 48.4 prior; PMI (unadj): No est v 55.7 prior
  • 11:00 (RU) Russia Feb CPI M/M: 0.6%e v 0.7% prior; Y/Y: 5.5%e v 5.2% prior
  • 11:00 (RU) Russia Feb CPI Core M/M: 0.4%e v 0.5% prior; Y/Y: 4.9%e v 4.6% prior
  • 11:00 (EU) Potential sovereign ratings after European close (Moody’s on Spain sovereign rating; S&P on Finland and Cyprus sovereign ratings)
  • 13:00 (US) Weekly Baker Hughes Rig Count
  • 15:00 (US) Jan Consumer Credit: $12.0Be v $9.7B prior
  • (MX) Citibanamex Survey of Economists
  • 19:00 (CO) Colombia Feb CPI M/M: 0.5%e v 0.4% prior; Y/Y: 1.5%e v 1.6% prior
  • 19:00 (CO) Colombia Feb CPI Core M/M: No est v 0.2% prior; Y/Y: No est v 0.9% prior