1. The market is getting nervous about Powell's testimony this week  CNBC
  2. Economic Calendar This Week: Week beginning 22nd February 2021  Arirang News
  3. The Treasury Yield Stress Point  Seeking Alpha
  4. The Money Boom Is Already Here  The Wall Street Journal
  5. The bond market’s non-taper tantrum is odd but explainable  Mint
  6. View Full Coverage on Google News
Rising bond yields and accompanying inflation fears are adding a level of drama to Powell's appearance.Rising bond yields and accompanying inflation fears are adding a level of drama to Powell's appearance.

(Bloomberg) -- A wave of reflation bets sweeping across global markets is prompting traders to brace for an end to the low interest-rate regime earlier than expected.The ramp-up in inflation expectations intensified a selloff in Treasuries sending the gap between the 5- and 30-year yields to the widest since October 2014 and bringing forward expectations for U.S. rate hikes to as early as mid-2023. That’s reverberating across assets from credit to emerging markets, and emboldening commodity bulls who are betting on a super-cycle to drive a surge in prices including for copper.The trade is picking up momentum on prospects for pandemic-relief spending, rising inflation expectations, and a higher real yield that strips out price gains to reflect a pure read on growth prospects. In response, traders across the globe are setting their sights on the prospect of policy tightening by the Federal Reserve and other central banks -- however unlikely in the near term -- as the pace of bond yields’ ascent raise concerns over its impact on risk sentiment and financial conditions.“The duration spoiler we worried about is upon us,” John Velis, a BNY Mellon strategist, wrote in a client note. “Despite signs of inflation across the supply curve, the Fed will not dial back policy accommodation until at least late 2022, and might even impose yield curve control before then as yields drive higher.”Credit VulnerabilityTen-year Treasury yields climbed as much as six basis points to 1.39%. Money markets are pricing in the first Fed 25-basis-point rate hike for around mid-2023, versus early 2024 earlier in February.Credit markets would be among the most vulnerable, as rising government rates more than offset the shrinking risk premiums in company debt. Total corporate bond returns are down almost 1.9% this year, according to Bloomberg Barclays indexes.Credit’s vulnerability to rising yields increased during the pandemic, as companies exploited low interest rates to raise funds that wouldn’t have to be repaid until the virus was a distant memory.“Last summer, being short or bearish U.S. and global government bonds was an obvious trade -- many markets were pricing in substantial global reflation, but government bonds everywhere were essentially pricing in a great depression,” said Mike Riddell, portfolio manager at Allianz Global Investors. “Now it’s getting increasingly hard to argue that government bonds are expensive.”Emerging MarketsThe pace of Treasury yields’ ascent hit emerging markets, where currencies from the Mexican peso to the Turkish lira and South African rand suffered declines of more than 1% on Monday.If U.S. Treasury yields continue to rise, “central banks in emerging markets may need to hike rates to stem inflationary pressures coming from weakening currencies,” Per Hammarlund, chief emerging-markets strategist at SEB AB in Stockholm, wrote in e-mailed comments. The Fed “will need to let market participants know how they plan to prevent long-term yields from rising too fast,” he added.In Australia, reflation trades reached a fever pitch that will be hard for global policy makers to ignore. Ten-year Australian yields climbed the most since March 2020, while benchmark three-year yields inched further above the Reserve Bank of Australia’s 0.1% target.The moves were more muted in Europe, where German and Italian rates steadied after rising as much as 3 basis points. After the yield surge this year, there’s a risk investors may be overdoing the prospects for a full economic recovery even as nations intensify their vaccination roll-outs.“The market needs to be cautious about getting too over its skis on this as there is a lot of spare capacity and unemployed people that need to be reabsorbed,” said Charles Diebel, who manages about 4.5 billion euros ($5.5 billion) at Mediolanum in Dublin. “I would think we are getting to the point where risk assets start to take notice.”(Adds context on global markets, interest-rate pricing throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.(Bloomberg) -- A wave of reflation bets sweeping across global markets is prompting traders to brace for an end to the low interest-rate regime earlier than expected.The ramp-up in inflation expectations intensified a selloff in Treasuries sending the gap between the 5- and 30-year yields to the widest since October 2014 and bringing forward expectations for U.S. rate hikes to as early as mid-2023. That’s reverberating across assets from credit to emerging markets, and emboldening commodity bulls who are betting on a super-cycle to drive a surge in prices including for copper.The trade is picking up momentum on prospects for pandemic-relief spending, rising inflation expectations, and a higher real yield that strips out price gains to reflect a pure read on growth prospects. In response, traders across the globe are setting their sights on the prospect of policy tightening by the Federal Reserve and other central banks -- however unlikely in the near term -- as the pace of bond yields’ ascent raise concerns over its impact on risk sentiment and financial conditions.“The duration spoiler we worried about is upon us,” John Velis, a BNY Mellon strategist, wrote in a client note. “Despite signs of inflation across the supply curve, the Fed will not dial back policy accommodation until at least late 2022, and might even impose yield curve control before then as yields drive higher.”Credit VulnerabilityTen-year Treasury yields climbed as much as six basis points to 1.39%. Money markets are pricing in the first Fed 25-basis-point rate hike for around mid-2023, versus early 2024 earlier in February.Credit markets would be among the most vulnerable, as rising government rates more than offset the shrinking risk premiums in company debt. Total corporate bond returns are down almost 1.9% this year, according to Bloomberg Barclays indexes.Credit’s vulnerability to rising yields increased during the pandemic, as companies exploited low interest rates to raise funds that wouldn’t have to be repaid until the virus was a distant memory.“Last summer, being short or bearish U.S. and global government bonds was an obvious trade -- many markets were pricing in substantial global reflation, but government bonds everywhere were essentially pricing in a great depression,” said Mike Riddell, portfolio manager at Allianz Global Investors. “Now it’s getting increasingly hard to argue that government bonds are expensive.”Emerging MarketsThe pace of Treasury yields’ ascent hit emerging markets, where currencies from the Mexican peso to the Turkish lira and South African rand suffered declines of more than 1% on Monday.If U.S. Treasury yields continue to rise, “central banks in emerging markets may need to hike rates to stem inflationary pressures coming from weakening currencies,” Per Hammarlund, chief emerging-markets strategist at SEB AB in Stockholm, wrote in e-mailed comments. The Fed “will need to let market participants know how they plan to prevent long-term yields from rising too fast,” he added.In Australia, reflation trades reached a fever pitch that will be hard for global policy makers to ignore. Ten-year Australian yields climbed the most since March 2020, while benchmark three-year yields inched further above the Reserve Bank of Australia’s 0.1% target.The moves were more muted in Europe, where German and Italian rates steadied after rising as much as 3 basis points. After the yield surge this year, there’s a risk investors may be overdoing the prospects for a full economic recovery even as nations intensify their vaccination roll-outs.“The market needs to be cautious about getting too over its skis on this as there is a lot of spare capacity and unemployed people that need to be reabsorbed,” said Charles Diebel, who manages about 4.5 billion euros ($5.5 billion) at Mediolanum in Dublin. “I would think we are getting to the point where risk assets start to take notice.”(Adds context on global markets, interest-rate pricing throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Reflation Trade Gets Shot in the Arm With Rate Hikes in Focus

Stock markets opened to losses on Monday, continuing a drop from record highs earlier in the month, as investors prepared for testimony by Federal Reserve Chairman Jerome Powell on Tuesday.Stock markets opened to losses on Monday, continuing a drop from record highs earlier in the month, as investors prepared for testimony by Federal Reserve Chairman Jerome Powell on Tuesday.

Markets slump ahead of Powell testimony | TheHill

Stock markets opened to losses on Monday, continuing a drop from record highs earlier in the month, as investors prepared for testimony by Federal Reserve Chairman Jerome Powell on Tuesday.Stock markets opened to losses on Monday, continuing a drop from record highs earlier in the month, as investors prepared for testimony by Federal Reserve Chairman Jerome Powell on Tuesday.

Markets slump ahead of Powell testimony | TheHill

Bloomberg - Are you a robot?

That US Treasury yields rose despite the Fed’s no-taper promise suggests a return of inflation fearsThat US Treasury yields rose despite the Fed’s no-taper promise suggests a return of inflation fears

The bond market’s non-taper tantrum is odd but explainable

Over the past year Federal Reserve Chair Jerome Powell has engineered the largest economic rescue in U.S. history, thrown a controversial lifeline to companies hard hit by the coronavirus pandemic and steered a sweeping labor-friendly revamp of monetary policy that any presidential...Over the past year Federal Reserve Chair Jerome Powell has engineered the largest economic rescue in U.S. history, thrown a controversial lifeline to companies hard hit by the coronavirus pandemic and steered a sweeping labor-friendly revamp of monetary policy that any presidential...

Analysis: Fed's Powell set table for Biden economy, but will he stay for dessert? | Reuters

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Rising Treasury yields and emboldened bond bears are prompting investors to reach out for historical playbooks.Rising Treasury yields and emboldened bond bears are prompting investors to reach out for historical playbooks.

Here are parts of the market most vulnerable to a bond-market ‘taper tantrum’ - MarketWatch

The official rate stood at 6.3 percent in January, but using an expanded metric, Fed and Treasury officials say it’s closer to 10 percent.The official rate stood at 6.3 percent in January, but using an expanded metric, Fed and Treasury officials say it’s closer to 10 percent.

Spot silver prices (XAG/USD) has recently pushed to session highs in the $27.70s, having previously remained supported above the $27.30 mark for most Spot silver prices (XAG/USD) has recently pushed to session highs in the $27.70s, having previously remained supported above the $27.30 mark for most

Silver bulls eye move back towards $28.00 level ahead of Powell on Wednesday

Traders on the floor react before the opening bell on the New York Stock Exchange on March 9, 2020 in New York. Timothy Clary/AFP/Getty Images ...US lawmakers will debate on Biden's proposed $1.9 trillion American Rescue Plan act this week, though some investors are nervous the stimulus could elevate inflation.

US stocks fall as investors mull how stimulus will impact inflation | Markets Insider

In his testimony this week, Powell may reiterate his suggestion that any inflationary spike to the upside over the near-term will be transitory.In his testimony this week, Powell may reiterate his suggestion that any inflationary spike to the upside over the near-term will be transitory.

The bond selloff continued Monday as Treasury yields climbed and sovereign debt in Australia and New Zealand slid on concerns about faster inflation, tempering stock market optimism from positive vaccine news. Japanese equities outperformed and shares also rose in South Korea.

Bond Yields Rise; Stocks Pare Gains as Metals Jump: Markets Wrap

Growing confidence in the global recovery, especially in the US, is leading to speculation over when the Fed might take its foot off the accelerator and buy…Growing confidence in the global recovery, especially in the US, is leading to speculation over when the Fed might take its foot off the accelerator and buy…

Timing the Tantrum: The market implications of a big Treasury sell-off | Article | ING Think

Federal Reserve Chair Jerome Powell can expect pressure to support the stimulus plan of Democratic lawmakers when they host him this week on Capitol Hill for the first time since regaining control of Congress.

Powell to face lawmakers over stimulus this week - BNN Bloomberg

Is it enough to earn the 68-year-old former investment banker four more years as the head of the U.S. central bank? That question will get increased attention during this, the final year of Powell's term, and the conversation may start as early as this week when the Fed chief delivers his semi-annual update on the economy in two hearings before Congress.Is it enough to earn the 68-year-old former investment banker four more years as the head of the U.S. central bank? That question will get increased attention during this, the final year of Powell's term, and the conversation may start as early as this week when the Fed chief delivers his semi-annual update on the economy in two hearings before Congress.

Jerome Powell: Fed's Jerome Powell set table for Biden economy, but will he stay for dessert? - The Economic Times