Forex news from the European trading session - 25 February 2021
Headlines:
- Nasdaq futures down 1% as yields continue to extend higher on the session
- Japan to end state of emergency in 5 prefectures at the end of the month
- ECB's Lane: ECB closely monitoring the evolution of long-term nominal bond yields
- AUD/USD hits 0.8000 for the first time in over three years
- Oil looks to keep the rally going into the month-end
- Dollar fails to take comfort in higher yields so far today
- France February consumer confidence 91 vs 92 expected
- Germany March GfK consumer confidence -12.9 vs -14.0 expected
- Germany reports 11,869 new coronavirus cases, 385 deaths in latest update today
Markets:
- EUR leads, JPY lags on the day
- European equities mixed; S&P 500 futures down 0.3%
- US 10-year yields up 7.4 bps to 1.449%
- Gold down 1.0% to $1,787.05
- WTI up 0.5% to $63.53
- Bitcoin up 3.9% to $50,696
The market is filled with mixed themes today but the big story is that of a surge higher in bond yields as the global steepening continues.
10-year Treasury yields began the session already higher just off 1.40% before extending upwards to 1.466% and is settling just below that now.
The selloff reverberated to Europe as well with 10-year bund yields touching its highest since March last year at -0.25% despite ECB's Lane attempt to jawbone the market.
The ramp higher in yields led to a decline in stocks during the session, though the mood is relatively calm all things considered.
The drop in equities is largely contained to big tech still with Nasdaq futures turning gains of 0.3% to a drop of 0.8% currently. S&P 500 futures also turned lower in tandem but Dow futures are keeping flatter ahead of North American trading.
Elsewhere, the memes are continuing as GameStop looks to continue its parabolic run once again since pre-market trading as of the close yesterday.
Going over to FX, the surge higher in yields didn't lead to any comfort in the dollar as the greenback slumped to its weakest levels since the start of January.
EUR/USD rose from 1.2175 to 1.2238 as buyers push to a six-week high while AUD/USD clipped 0.8000 for the first time in three years and is holding just below that now.
USD/CAD is also trading to fresh lows in three years as price falls below 1.2500 with oil prices continuing to bolster the loonie today.
The yen is the major laggard amid the rout in bonds, with USD/JPY looking to keep a break above 106.00 and other yen crosses surging to the upside as well.
