Alternating Reality!
Mainstream media’s economic optimism seems at odds with reality - Yellen’s reality-challenged view of the US economy and financial system confirms she is living in an alternate reality -most bewildering is her claim of steering US towards fiscal sustainability.
ANZ came out with their call for rate hike in New Zealand (yes, you read it right) on Feb 28 and there are murmurs of RBA also following suit - are global rates turning opposite to expectations?
For academically inclined, in today's CPI recalculated seasonally adjusted indexes as well factors for the period Jan 2019 through Dec 2023 will be made available - the adjustments to the seasonal factors would only impact the m/m rates but will not affect the y/y rates. Whatever the eventual number, market is going to cheer.
Decent 10Y auction helped - biggest ever at $.42 bio - can say there is always a quick-trigger bid for bonds at any signs of regional-bank stress - 30 year at $ 25 bio too passed off with good optics.
CPI from Germany is eagerly anticipated.
ECB pushing back at rate cut expectations as hard as Fed. Nagel undoubtedly would stay hawkish when he speaks later today. EUR/USD has stayed rangebound for long Mid-point of Oct-Dec 2023 rise is 1.0794 which will hold.
Obvious that in case BoE were to abandon its inflation-led high-rate regime, seeking to stir growth as BoJ has, everyone knows GBP could slide significantly. Hence BOEs Haskel: Waiting for more evidence on inflation before "stopping" raising rates.
GBP USD remains range-bound between 1.2788 and 1.2518.
Uchida said that even if BoJ were to end negative rates, it was unlikely to “keep raising the interest rate rapidly”. Even at the cost of being dubbed as obsessive, we stayed with USDJPY Longs-Faithful dollar longs get rewarded - break above 149.17 (76.4% 151.92-140.27 drop) opens first 151.93 test. Thereafter blue sky.