Bond yields further down after the Fed Minutes

Much ado about nothing: the Fed minutes showed many Fed members getting more nervous about inflation and eager to discuss tapering bond purchases in order to react quickly if necessary. The most noticeable information that was not obvious after the Fed meeting was growing concern about the impact of monetary policy on the overheating housing market. 

US home prices sharply on the rise

Some members proposed reducing purchases of Mortgage Backed Securities in priority, but that could also mean rate hikes coming sooner than expected. Whatever, all this did not prevent US equities to reach new highs and the US 10y from going below 1.30%. The EUR/USD pair fell below 1.18 in parallel, which appeared at odds with the other markets’ reaction.

The EU Commission had also revised the euro area GDP growth forecasts sharply higher to +4.8% in 2021 and 4.5% in 2022. This appears voluntaristic, not to say very optimistic, given the supply problems limiting activity in the automotive sector in particular and the consequences of the spread of the Delta variant.  

Main event today: the release of the ECB’s strategic review and Mrs. Lagarde’s press conference at 1 and 2pm CET respectively. The euro could weaken a bit further if it is confirmed that the ECB follows in the footsteps of the Fed by tolerating inflation above 2% from now on.  

Share this news :

You might also read :

ES-oil
February 10, 2022

US oil stocks at their lowest since 2015

The weekly report from the US Department of Energy confirmed the current tightness in the oil market. US Crude oil inventories fell by 4.8mb last week and gasoline…
ES-oil
July 19, 2021

OPEC+ members strike a deal

On Sunday, OPEC+ members met for a rapid meeting, delivering a suite of production decisions going forward. The current production agreement between OPEC nations and…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Subscribe to our newsletter

Don’t have an account yet? 

[booked-calendar]