· Turkish lira crumbles on central bank woes, yen gains
The Turkish lira slumped toward a record low versus the dollar after President Tayyip Erdogan stunned investors over the weekend by replacing the hawkish central bank governor with a critic of high interest rates.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.094 after its recent recovery from levels below 91.5.
The yen rose against the euro and the antipodean currencies on speculation that Japanese individual investors who have been buying the lira recently for its high rates will be forced to cut losses and close out their positions.
Worries that events in Turkey will cause disruptions in other financial markets also supported the dollar because of its status as a safe-harbour currency.
The Turkish lira stood at 8.10 per dollar in early Asia trade, down 11% from its close on Friday.
At one point the lira fell by as much as 14.9% to 8.4850, which is close to a record low of 8.5800.
Liquidity was thin during early trading, but analysts said they are braced for bigger moves as more investors enter markets later in the day.
The yen edged up against the euro, the Australian dollar and the New Zealand dollar, boosted by expectations that Japanese retail investors who lost money on the lira will unwind other popular cross yen trades.
The dollar was little changed at 108.89 yen but edged up against the British pound to $1.3833.
The euro fell slightly to $1.1885.
Erdogan fired the central bank governor only two days after a sharp rate hike that was meant to head off inflation of nearly 16% and support the lira.
The new central bank governor likely means a reversal of the hawkish and orthodox steps taken to battle inflation, which could lead to prolonged market volatility, analysts said.
A decline in risk appetite weighed on the Australian dollar, which fell to $0.7725. The New Zealand dollar also fell slightly to $0.7153.
· EUR/USD to push back to the 1.20 mark – Rabobank
While economists at Rabobank concur with the Fed that rises in CPI inflation will be transitory, optimism in the US economic outlook contrasts with disappointment in the EU linked to the slow vaccine rollout The EUR/USD pair still risks a move back to 1.20, but it is seen trading at 1.18 on a 12-month view.
· Bitcoin could surge to $300,000 — but winter could last for years when the bubble bursts, says crypto entrepreneur
Bitcoin is currently in a bull market and could surge to as high as $300,000 based on historical patterns, says crypto entrepreneur Bobby Lee.
Still, he predicted that price for bitcoin could see a drastic decline in the subsequent “bitcoin winter” that could last years.
Bitcoin has had a blockbuster 2021 so far, with the cryptocurrency breaking multiple record levels this year.
· Fed's Barkin says the dot plot is not FOMC policy
Barkin is the president and CEO of the Federal Reserve Bank of Richmond, he has some comments crossing on the wires.
Speaking in a Bloomberg TV interview.
- you want yields to respond to what happening in the economy
- yields reflecting good news on vaccines, fiscal aid
- really hopeful that we're at the back end of pandemic
- the Fed's interest-rate dot plot is not Federal Open Market Committee policy
-Fed has tools to handle unwanted inflation
- inflation is not a one-year phenomenon, it's multi-year
- expect to see price pressures in 2021
- expect strong demand, met by some supply-chain issues
- the US economy will have strong spring and summer
· AstraZeneca coronavirus vaccine found to be 79% effective in U.S. trial
· UK sets new single-day Covid vaccine record with 873,784 jabs in 24 hours
Boris Johnson praised everyone involved and urged people to come forward and get their jab when they were invited to do so.
· EU has committed to allow contractual vaccine exports, UK minister says
Britain said on Monday it would remind the European Union of its commitment to allow vaccine manufacturers to fulfill orders, including the export of shots to Britain, after speculation of a vaccine trade war heated up.
“One thing I think we can do is remind the EU of the commitments they have made, and particularly Ursula von der Leyen, the EU president, made the commitment to the prime minister that the EU would wouldn’t block companies from fulfilling contractual obligations to supply vaccinations,” social care minister Helen Whately told Sky News.
· EU has 'absolutely no need' of Sputnik V vaccine, commissioner says
The European Union does not need Russia’s Sputnik V vaccine for COVID-19 and can achieve immunity across the continent using European production, a leading EU executive said on Sunday in comments that provoked a backlash from the vaccine maker.
The European Commission has been criticised for a slow vaccine rollout when the bloc faces a rise in cases and as former member Britain’s inoculation programme gathers pace.
· Asia accelerates AstraZeneca COVID-19 vaccine rollouts, even as trust plunges in Europe
Many Asian countries are accelerating the rollout of AstraZeneca’s COVID-19 vaccine after confidence in its safety was hit, following reports that the shot was linked to rare blood clots in Europe earlier this month.
After briefly halting its use, many European countries have resumed using the shot in their inoculation programmes after a regional regulator said it was safe, while several country leaders are also taking the vaccine to boost confidence.
· Taiwan launches Covid-19 vaccination programme
The Prime Minister and the Minister of Health were administered their first dose of the AstraZeneca vaccine.
· Americans are still interested in putting their money in China
U.S. investors are among the many foreigners looking to profit from China, particularly its bond market.
One clear area of interest is in government bonds, where the Chinese 10-year has a yield of over 3.2%. In contrast, the latest rise in U.S. rates has pushed the 10-year Treasury yield to only 1.7%. That wide difference gives investors in Chinese government bonds a significantly higher return.
“U.S. investors continue to be very interested in investing in (the) Chinese market,” Tao Wang, head of Asia economics and chief China economist at UBS, said Thursday during a webinar with the Institute of International Finance. “Especially from the bond market perspective, there is a structural increase in the interest.”
· Trump plans social media return with his own platform, adviser tells Fox News
Former U.S. President Donald Trump, suspended from Twitter, Facebook and other social media sites after the Jan. 6 attack on the Capitol, plans to launch his own platform in two to three months, one of his senior advisers told Fox News on Sunday.
Jason Miller, a spokesman for Trump’s 2020 campaign, told the network that Trump would re-enter the social media space with a new platform of his own that would “completely redefine the game.”
· Brexit reality stokes fears for the peace in Northern Ireland
The deep anger among some pro-British unionists in Northern Ireland over post-Brexit trade barriers that cut it off from the rest of the United Kingdom is emblazoned along the road from Belfast to the mainly Protestant port town of Larne.
· New Zealand's Ardern puts travel with Australia on hold for two more weeks
New Zealand’s Prime Minister Jacinda Ardern will announce within two weeks a date for quarantine-free travel with Australia, she said on Monday, despite mounting pressure from business to open borders with neighbouring countries.
· Two of Australia’s three top insurers on Monday disclosed the number of claims received so far from the worst flooding that Sydney has faced in 60 years and said it was too early to estimate the costs.
Heavy rains along Australia’s east coast over several days have resulted in thousands of people being forced to evacuate their homes.
Suncorp Group has received 1,300 claims and expects the number to rise in the coming days. For fiscal 2021, it has set aside A$950 million ($734.07 million) as its natural hazard allowance.
Insurance Australia Group said it had received more than 2,100 claims by the end of Sunday, covering mainly property damage.
The full extent of the damage caused by the floods is yet to be determined with the rain forecast to continue for several days, S&P Global Ratings analysts said.
· Myanmar activists honk car horns in new protests; neighbours plan diplomacy drive
Motorists honked car horns in Myanmar biggest city on Monday and planted posters in an empty field in fresh protests against last month’s military coup that ended a decade of tentative democratic reform.
· Oil falls as European lockdowns douse recovery hopes
Oil prices resumed their decline on Monday, falling around 1% as worries about a drop in demand for fuel products in the wake of yet more European lockdowns dominated trading.
Brent crude was down 60 cents, or 0.9%, at $63.93 a barrel by 0136 GMT. U.S. oil was off by 68 cents, or 1.1%, at $60.74 a barrel. Both contracts fell by more than 6% last week.
Germany plans to extend a lockdown to contain COVID-19 infections into a fifth month, according to a draft proposal, after new cases exceeded levels authorities say will cause hospitals to be overstretched.
“The reality is that we’re still a long way from a full demand recovery, and it’s the record levels of withdrawn production capacity that’s the main prop for the oil market,” said Stephen Innes, chief global market strategist at Axi.
U.S. drillers are starting to take advantage of an earlier spike in prices on optimism about returning demand, adding the most rigs for extracting oil since January in the week through Friday.
The oil and gas drilling rig tally, an early indicator of future production, rose nine to 411 last week, the highest since April, energy services firm Baker Hughes Co <BKR.N> said in its closely followed report on Friday.
The rig count has been rising over the past seven months and is up nearly 70% from a record low of 244 in August.
· WTI seen trading at $57 by end-March 2022 – Deutsche Bank
Oil prices have risen in early 2021, and inventories have edged down, encouraged in particular by a recovery in demand in major emerging markets. Strategists at Deutsche Bank forecast WTI trading at $57 by end-March 2022.
Reference: CNBC, Reuters, inews, Forexlive, Foreigner.fi
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