February 2022 in Figures

February 28, 2022

Investors were already on high alert as the month began as a re-intensification of inflationary pressures made the prospect of tighter monetary policies seem more inevitable and likely to proceed more aggressively than imagined at the start of this year. On top of that set of risks, Russia’s invasion of Ukraine played out in surreal fashion, first with U.S. intelligence sources being so accurate as to suggest a mole at the highest level in Putin’s Kremlin and then the Russian president acting so irrationally as to suggest that maybe he has a terminal disease and has decided that if he can’t live much longer, neither must anyone else.

Equities and not either the dollar or long-term interest rates bore the brunt of February’s craziness. The U.S. currency edged just 0.2% higher on a weighted basis and versus the euro during the month. The greenback fell against other safe havens like the yen and Swissy and also versus commodity-sensitive currencies like the Australian dollar. A huge 38% appreciation of the dollar occurred against the ruble but seemingly did not deter Putin from wage a brutal attack on its neighbor. The ten-year U.S. Treasury yield went up only four basis points on net. Ten-year European sovereign debt yields recorded double-digit advances, while those of Canada and Japan climbed very little. Equity markets took a big hit in the United States, Germany, Japan and Switzerland.

Officials at the Bank of England were the first in the Group of Seven to lift its policy interest rate back in December and followed that action with a doubling of their rate to 0.50% in February. Other countries around the world with central banks that raised interest rates during the past month included Poland, Peru, Romania, Hungary, Kyrgyzstan, Brazil, the Czech Republic, Mexico, Iceland, Moldovia, and Rwanda. And then on this final day of the month, the National Bank of Belarus raised its key rate by 275 basis points, and the desperate Central Bank of Russia, which earlier in the month had lifted the rate by 100 basis points followed up with a 10.5 percentage point increase from 9.5% to 20.0%.

Commodity prices were a big beneficiary of February’s high level of market fear, and the price of a Bitcoin closed 10.5% higher on the month and 21.6% above the month’s low touched last Thursday.

10-Yr Yield 02/28/22 01/31/22 February Chg
U.S. 1.83% 1.79% +4 Basis Points
Germany 0.13% 0.01% +12
Japan 0.18% 0.17% +1
U.K. 1.41% 1.30% +11
Canada 1.84% 1.77% +7
Switzerland 0.21% 0.04% +17
CB Policy Rate 02/28/22 01/31/22 February Chg
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 0.50% 0.25% +25
Swiss 3M Libor -0.75% -0.75% 0
FX 02/28/22 01/31/22   Change in $
EUR/USD 1.1216 1.1234 +0.2%
USD/JPY 114.75 115.09 -0.3%
USD/CHF 0.9175 0.9265 -1.0%
GBP/USD 1.3410 1.3434 +0.2%
AUD/USD 0.7262 0.7071 -2.6%
NZD/USD 0.6762 0.6582 -2.7%
USD/CAD 1.2693 1.2708 -0.1%
USD/CNY 6.3093 6.3610 -0.8%
Equities 02/28/22 01/31/22 February Chg
S&P 500 4352 4516 -3.6%
Nasdaq 13751 14240 -3.4%
Djia 33880 35132 -3.6%
Dax  14461 15471 -6.5%
Nikkei 26527 27002 -1.8%
Ftse 7458 7464 -0.0%
Canada TSE 21034 21098 -0.3%
Swiss SMI 11987 12227 -2.0%
Commodities 02/28/22 01/31/22 February Chg
Oil, $ per barrel 95.72 88.31 +8.4%
Gold, $ per ounce 1900.70 1798.50 +5.7%

Copyright Larry Greenberg 2022.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.