EnergyScan

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 :
Share on twitter
Share on linkedin
Share on email

You might also read :

ES-economy
March 5, 2021

Bond yields keep on rising, the USD follows

Jerome Powell, the Fed chairman, repeated more or less word for word what Lael Brainard said previously, but markets expected something more specific pointing to…
ES-gas
July 7, 2021

Strong downward correction

European gas prices dropped significantly yesterday, pressured by below-normal demand and technical correction, which outweighed the impact of lower Russian supply. Indeed, due to maintenance…
ES-oil
February 9, 2021

Rallying by default

At 61 $/b, Brent prompt futures are now at their 7th consecutive positive session, boosted by a weakening dollar and Libyan output unable to ramp-up due…
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?  Sign up here!

[booked-calendar]