Tech Leads US Stock Rout as Bond Yields Soar

Tech shares led a rout in US stocks while the selloff in global bonds deepened, with the benchmark Treasury yield spiking to a one-year high and debt from the UK to Australia coming under pressure. The S&P 500 fell by 2.45% to 3,829.34 while Dow Jones was down 559.85 points (1.75%) to 31,402.01.

Fed’s Bostic Says Labor Market Crisis, Not GDP, Is Focus of Fed

While US growth is recovering quicker than expected amid the Covid-19 pandemic, the Federal Reserve is focused on supporting the labor market that is still in crisis after losing 10 million jobs, Atlanta Fed President Raphael Bostic said. The remarks, from a voting member of the central bank’s policy setting committee this year, reinforce the message that the Fed is not close to tightening policy even as the economy rebounds.

Stronger US Durables Orders Point to Solid Business Spending

Orders for US durable goods surged in January by the most in six months, fueled in part by equipment demand that points to another strong quarter for business investment. Bookings for durable goods -- or items meant to last at least three years - - increased 3.4% from the prior month after an upwardly revised 1.2% gain in December, Commerce Department.

Yellen Seeks Debt Transparency as IMF Eyes Expanded Firepower

US Treasury Secretary Janet Yellen called for greater transparency around the use of International Monetary Fund resources and on existing stocks of debt as global finance chiefs consider an expansion in the IMF’s lending firepower. “Transparent and comprehensive debt data will help promote sustainable growth,” Yellen said in a letter to her Group of 20 counterpart.

Euro-Area Confidence Improves Amid Optimism on Vaccine Rollout

Economic confidence in the euro area improved in February, as consumers and businesses grew more optimistic that vaccine rollouts will spark a recovery this year. A European Commission sentiment index increased to 93.4, the highest level in almost a year. Gauges for industry, services, and consumer sentiment all improved, though confidence in the retail and financial services sectors declined.

French Minister Says EU May Grant UK Limited Equivalence

A French minister close to President Emmanuel Macron says he thinks the European Union may grant some form of equivalence rulings that could allow the UK’s financial sector to do business across the continent -- but he warns they’ll be limited. “There will probably be partial equivalence, probably by the end of the semester,” Clement Beaune, junior minister for EU affairs, said in an interview.

Thailand Eyes US$1 Billion From Notes Tied to Libor Successor

Thailand’s central bank plans to auction its first floating-rate notes linked to a local benchmark to replace Libor, as the move away from the scandal-tainted benchmark gathers pace globally. The Bank of Thailand will auction 30 billion baht (US$1 billion ) of 182-day notes with a coupon rate of 5 basis points above the compounded Thai overnight repurchase rate, known as Thor, on March 25, it said in a statement.

Oil Hits Highest in More Than a Year With Global Supply Draining

Oil climbed to the highest in more than a year amid optimism of swiftly depleting global oil inventories. Brent crude for April settlement fell US$0.16 to US$66.88 per barrel.

Source: Affin Hwang Research - 26 Feb 2021