February 2021 in Figures
February 27, 2021
Extreme financial market volatility on the final business day of February exerted a significant effect on monthly changes shown in the table below. The ten-year U.S. Treasury yield, for example, plunged from last week’s 12-month high of 1.61% to 1.40% at yesterday’s close, and the prices of oil and gold sank 3.2% and 2.6% on that day. Many equity indices suffered through a difficult day that saw losses of 4.0% in the Japanese Nikkei, 2.5% in the British Ftse, and 1.5% in the Dow Jones Industrials.
Bearing that late distortion in mind, February as a whole experienced substantial net sovereign deby yield rises in February that were most pronounced in Britain and Canada. The backdrop for this move was rising inflation and short-term price expectations from a combination of higher commodity prices. A faster roll-out of Covid-19 vaccines and more fiscal support to counter pandemic drag were other factors. Yield curves as a result became much more upwardly sloped because central bankers consider the rise of inflation to be a temporary short-term development. No major central banks raised interest rates during February, and forward guidance points to no such likely changes for the foreseeable future.
Equities in many countries still managed to rack up sizable net price increases over February as a whole, Switzerland being the only exception in the table below. The price of West Texas Intermediate crude oil soared 17.8% despite a drop of $2 a barrel on the final day. Gold, which had been strongly bid in the early months of the pandemic to a record high of $2,067 per ounce on August 6, 2020, lost another 6.4% during February and ended up $338, or 16.4%, below last August’s peak.
The dollar’s performance was mixed in February, with advances against the yen, Swiss franc and Chinese yuan but declines against the other currencies shown in the table below. The trade-weighted dollar index opened February at a value of 90.53, quickly reached its most elevated value in February (91.58) on the fourth day of the month, thereafter trended down to a monthly low of 89.68 on February 25, only to rebound yesterday to a close of 90.88 for just a mere 0.4% appreciation versus the opening level of February.
| 10-Yr Yield | 02/26/21 | 01/29/21 | Change in Feb |
| U.S. | 1.40% | 1.07% | +33 Basis Points |
| Germany | -0.26% | -0.52% | +26 |
| Japan | 0.15% | 0.04% | +11 |
| U.K. | 0.82% | 0.32% | +50 |
| Canada | 1.35% | 0.89% | +46 |
| Switzerland | -0.26% | -0.48% | +22 |
| CB Policy Rate | 02/26/21 | 01/29/21 | Change in Feb |
| Fed funds target | 0.00/0.25% | 0.00/0.25% | 0 Basis Points |
| ECB deposit rate | -0.50% | -0.50% | 0 |
| BOJ policy rate | -0.10% | -0.10% | 0 |
| BOE Bank Rate | 0.10% | 0.10% | 0 |
| Swiss 3M Libor | -1.25/-0.25% | -1.25/-0.25% | 0 |
| FX | 02/26/21 | 01/29/21 | Pct Chg in $ |
| EUR/USD | 1.2075 | 1.2135 | +0.5% |
| USD/JPY | 106.58 | 104.75 | +1.7% |
| USD/CHF | 0.9096 | 0.8908 | +2.1% |
| GBP/USD | 1.3932 | 1.3698 | -1.7% |
| AUD/USD | 0.7706 | 0.7641 | -0.8% |
| NZD/USD | 0.7229 | 0.7185 | -0.6% |
| USD/CAD | 1.2718 | 1.2791 | -0.6% |
| USD/CNY | 6.4789 | 6.4277 | +0.7% |
| Equities | 02/26/21 | 01/29/21 | Change in Feb |
| S&P 500 | 3811 | 3714 | +2.6% |
| Nasdaq | 13192 | 13071 | +0.9% |
| Djia | 30932 | 29983 | +3.2% |
| Dax | 13786 | 13433 | +2.6% |
| Nikkei | 28966 | 27663 | +4.7% |
| Ftse | 6483 | 6407 | +1.2% |
| Canada TSE | 18060 | 17337 | +4.2% |
| Swiss SMI | 10522 | 10591 | -0.7% |
| Commodities | 02/26/21 | 01/29/21 | Change in Feb |
| Oil, $ per barrel | 61.50 | 52.20 | +17.8% |
| Gold, $ per ounce | 1728.80 | 1847.30 | -6.4% |
Copyright Larry Greenberg 2021. All rights reserved. No secondary distribution without express permission.
Tags: 10-year sovereign debt yields, central bank interest rates, commodity prices, Equity indices
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