Dollar holds firmer even as the reflation trade pauses for breath
The dollar firmed yesterday on the back of higher yields and is so far keeping that momentum going in trading today, gaining modest ground across the board.

Comments by UK prime minister, Boris Johnson
– Will set out steps to move out of lockdown on 22 February
– Approach will be cautious, prudent, irreversible
– The unwinding of restrictions will be done in stages
Johnson is trying to manage expectations ahead of his big announcement next Monday. Expect there to be much rumours on that going

Westpac argues that the RBA has already used up its best opportunity to limit the aussie currency strength over the next six months
The firm’s senior currency strategist, Sean Callow, says that in electing to make an early decision by , the RBA had used its best shot to prevent further gains in the currency in

Comments by German health minister, Jens Spahn
Although the virus situation in Germany is taking a turn for the better, lawmakers remain guarded on the spread of virus variants and medical capacity.

30-year yields up 6 bps to 2.07% on the day
Meanwhile, 10-year yields are also up by 5.5 bps to 1.26% as the bond market selloff starts to turn into a bit of a rout going into the session ahead.

The reflation narrative keeps the market buzzing this week
The breakout in Treasury yields towards the end of last week is holding and that is keeping with the reflation theme that is sweeping across the market in the past few weeks.

Comments by ECB policymaker, Gabriel Makhlouf
The above may be referring to the US but it is a safe assumption that a similar phenomenon is being observed across the globe. Hence, how much (and at what pace) that buffer collapses in the next year or so is going to be crucial for how markets will react.

Latest data released by ZEW – 16 February 2021
The jump in the expectations reading is the highest since September last year and reaffirms that the market remains more forward-looking when viewing the German and euro area economies at this point in time.

Latest data released by Eurostat – 16 February 2021
The preliminary report can be found . The reading shows that the economic contraction was less than initially estimated. That is some good news but this just reaffirms that the euro area economy remains on track for a possible double-dip recession still.

Comments by UK prime minister, Boris Johnson
– No decisions have been taken on exact date to reopen schools
– Hoping to do so by 8 March
– We will try to set out a roadmap out of lockdown
Johnson is managing expectations a little before he gets into more detail on . Nothing out of the ordinary so