Markets are in a holding pattern this morning, so in today’s Comment we will focus on the calendar for the week ahead, which contains more than a few potentially market moving events. Having said that, we still want to briefly summarize the overall picture in markets at the start of the week. US Treasury yields are edging lower this morning, though at 0.83y the 10y still has erased about half the vaccine increase in yields (which pushed it up from 0.73 to nearly 1.00). Asian equity markets are mostly lower this morning. However, those moderate losses don’t make a dent on the monthly gains ranging from 5% for Shanghai to around 25% for the Spanish and Italian markets on vaccine optimism. The dollar has been clearly weaker for the month, losing more than 2% against the majors and nearly 4% against EM currencies. Dollar losses have helped boost commodities even further, with overall commodities up 10% for the month and crude up 20% on economic recovery optimsim. It goes without saying that markets expect central banks to stay dovish (enough) for a long time. Hence, the overall level of nominal bond yields remain low. And Eurozone and US real yields have barely budged and remain around the lowest levels in years.
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