Yields fall
Global bond markets are stabilizing after last week’s defeat, withcentral banks around the world assuring investors that they will continue their measuresof accommodative policy. Although Federal Reserve and Bank of England officialshave said they see little reason to be concerned about the rapid rise in incomes in thelast week, the Australian monetary authority signaled that it will maintain its target ofincome and the European Central Bank said it will not tolerate higher yields thanrisk damaging the economy. Increasingly, investors are alsoreassessing the risk of an explosion of inflation, with some now thinking that fearsrapid rise in consumer prices are exaggerated.
Stimulus
President Joe Biden’s $ 1.9 trillion stimulus bill, approved by the House inSaturday, without Republican support, heads to the Senate. Plans to penalize companies thatdo not increase the minimum wage have been archived for the package to move forward quickly,according to people familiar with the matter. With some measures to support unemployment,running out in two weeks, legislators focus on getting the bill approvedin the Senate and be ready for Biden’s signature as soon as possible.
Virus
The approval of the Johnson & Johnson single dose vaccine by the Food and Drug Administrationthe US is a welcome addition to the pandemic-fighting arsenal asauthorities are concerned about the circulation of new variants and the recent slowdown inrate of reduction of cases. The FDA has also outlined a rapid approval process fornew vaccines or booster doses to combat new strains. In Europe, new restrictionswere announced to combat local outbreaks in Italy and Norway, while the UKis trying to track cases of the variant in Brazil.
Stock Rally
With bond investors less and less concerned with the risks of high inflation, therisk appetite in equities is gaining momentum. Overnight, the MSCI Asia Pacific indexadded 1.5%, while Japan’s Topix index closed 2% above. In Europe, the Stoxx Index600 gained 1.6% at 7:50 am Brasília time, with all sectors of the industry in the green. YouS&P 500 futures pointed to a similar increase in openness,10-year treasury was 1.432% and oil and gold were higher.
Arriving
The US manufacturing PMI in February is at 11:45 am with ISM Manufacturing at 12:00 pm. THENew York Fed Chairman John Williams and Fed Governor Lael Brainard speaklater, and three regional presidents are on a panel on racism and economics heldby the Minneapolis Fed. Zoom Video Communications Inc., NIO Inc. and Novavax Inc. areamong the companies that reported results. CERAWeek begins
