Good morning, and welcome to our rolling protection of the world economic system, the monetary markets, the eurozone and business.
After a late-February wobble, the markets are beginning March with a spring of their steps.
Anxiousness over rising authorities bond yields, which gripped traders final week, have light slightly as bond costs get well this morning, and merchants anticipate an financial restoration this 12 months.
The yield (or rates of interest) on US Treasury payments is dipping again from the highs seen final week. It’s all the way down to round 1.4% in early buying and selling, having spiked to one-year highs over 1.5% final week.
This bond market restoration is nice for equities – Japan’s Nikkei has rebounded, leaping 697 factors or 2.4% to 29,663, with Hong Kong’s Dangle Seng up 1.5%.
Britain’s FTSE 100 (which suffered its greatest plunge since October on Friday), is due for a optimistic begin too — up round 0.8% in pre-market.
Final week’s sell-off in authorities bonds jolted the markets. Traders confronted the chance that rising inflation may pressure central bankers to boost rates of interest (one thing they’re actually not eager to do).
Jim Reid of Deutsche Financial institution predicts the central bankers will push again this week, telling purchasers:
Tright here is little doubt in my thoughts that central banks will ultimately lean fairly arduous towards a sustained rise in yields. They merely can’t afford to see it occur with debt so excessive.
Up to now although, Fed officers have been largely relaxed over the latest strikes, suggesting that it displays extra optimistic financial development. However as all of it occurred so quick final week they may have had an opportunity to regroup and align their message for this week.
There’s additionally reduction at present that the US Home of Representatives has handed Joe Biden’s $1.9tn coronavirus support invoice. That ought to ship extra emergency monetary support to households, small companies and state and native governments, as soon as the package deal has been authorized by the Senate too.
Plus, America’s Meals and Drug Administration (FDA) has licensed Johnson & Johnson’s (J&J) vaccine for emergency use – which ought to assist the Biden White Home sort out the pandemic.
A flurry of producing surveys from internationally are being launched at present, which can present how UK, European and US factories fared final month.
Plus we get the most recent estimate of inflation (the difficulty of the second!) in Germany, and new UK housing information — simply as chancellor Rishi Sunak prepares to publicizes (we expect) a mortgage assure scheme to assist consumers with small deposits.
- 9am GMT: Eurozone manufacturing PMI survey for February
- 9.30am GMT: UK manufacturing PMI survey for February
- 9.30am GMT: UK mortgage approvals and client credit score information for January
- 1pm GMT: German inflation charge in February
- 3pm GMT: US manufacturing PMI survey for February