HOLIDAY IN MOST OF CANADA AND IN THE UNITED STATES
Financial markets finally appear to be stabilizing after a particularly volatile February. Further to a downturn of 11.8% between Jan. 29 and Feb. 9, the S&P500 regained some lost ground with a 4.3% gain over the past week. Remember that both the U.S. and Canadian stock markets are closed today because of President’s Day in the U.S. and Family Day in most of Canada.
Again this week, the bond market will be of interest to investors with large issues expected from the U.S. Treasury. The forecast growth of the U.S. deficit and the most recent economic indicators showing a rise in inflation have weighed on the fixed income market: 10-year U.S. government bond yields are now at 2.88%, up by 47 bps since the beginning of the year. This week, we will be keeping an eye on the release of the Federal Reserve’s (Fed’s) Beige Book on Wednesday and the comments from several influential members of the Fed.
Contrary to what several analysts may have believed, this increase in bond yields was not able to support the U.S. dollar, which has been down against all of the G10 currencies since the start of the year.
Emmanuel Tessier-Fleury
Range of the day: 1.2490 – 1.2610