Sunday , February 28 2021
Home / BK Asset Management / Risk Off Ahead of Fed

Risk Off Ahead of Fed

Summary:
Euro lower on ECB comments Stocks retreat Nikkei 0.315 DAX -1.38% UST 10Y 1.03 Oil .8 Gold 40/oz. BTCUSD 22/oz. Asia and the EU No Data North America USD FOMC 14:00 Equities started to sell off ahead of the North American open despite blockbuster earnings by Microsoft which suggested that the tech leaders continue to see growth despite the pandemic. In FX euro sold off on exchange rate comments by the ECB and the overall tone of the markets was decidedly risk off ahead of the FOMC meeting later today. Stock index futures turned read with S&P 500 down nearly 1% as profit taking kicked in. One side story that may have triggered liquidation flows was a report by CNBC that Melvin Capital – a multibillion dollar hedge fund- closed out its short of Gamestop which has become a

Topics:
Boris Schlossberg considers the following as important: , , , ,

This could be interesting, too:

Kathy Lien writes US Dollar Soars as Surging Yields Attract Massive Demand

Kathy Lien writes Powell Reaffirms Dovishness, Sends Dollar Lower

Kathy Lien writes USD: How Surging Treasury Yields Affects Powell’s Testimony

Kathy Lien writes GBP, AUD End Week Near 3 Year Highs

Euro lower on ECB comments
Stocks retreat
Nikkei 0.315 DAX -1.38%
UST 10Y 1.03
Oil $52.8
Gold $1840/oz.
BTCUSD $3122/oz.

Asia and the EU
No Data

North America
USD FOMC 14:00

Equities started to sell off ahead of the North American open despite blockbuster earnings by Microsoft which suggested that the tech leaders continue to see growth despite the pandemic. In FX euro sold off on exchange rate comments by the ECB and the overall tone of the markets was decidedly risk off ahead of the FOMC meeting later today.

Stock index futures turned read with S&P 500 down nearly 1% as profit taking kicked in. One side story that may have triggered liquidation flows was a report by CNBC that Melvin Capital – a multibillion dollar hedge fund- closed out its short of Gamestop which has become a massive short squeeze play with the stock rocketing 500% in 5 days.

The battle between the professional hedge funds and the Robinhood retail traders which have been pushing the stock higher through Reddit’s wallstreetbets channel has subsumed markets for the past few days and Melvin Captital’s capitulation may have marked a short term speculative peak. The price action in Gamestop as well as other highly volatile stocks like Beyond Meat may provide the tone for the rest of the day – until FOMC takes center stage.

The Fed is not expected to make any changes to policy with Chair Powell likely reiterating that policy will remain accommodative but as always traders will look around the edges for any signs of possible tightening either in the rhetoric or in the dot plot. Several FOMC members have hinted that monetary policy may need to be curbed a bit from its record expansionary pace and markets will look for any hints in the shift of stance of US policy makers.

Boris Schlossberg
Real time analysis of forex market from co founder of BKForex Tweets are commentary only.

Leave a Reply

Your email address will not be published. Required fields are marked *