Can Central Banks Stop the Rise in Yields?

What’s in Today’s Report:

  • Can Central Banks Stop the Rise in Yields

Stock futures are in the red this morning, led by a 1.5% drop in Nasdaq futures as weakness in big tech names is dragging equity markets lower for a sixth consecutive day despite stabilizing bond yields.

Economically, the Eurozone HICP report met expectations at 0.2% in January, easing some recent inflation concerns.

Looking into today’s session, there are a few economic reports due to be released early in the day: Case-Shiller Home Price Index (E: 0.9%), FHFA House Price Index (E: 0.8%), and Consumer Confidence (E: 89.7) before focus will shift to Fed Chair Powell’s Congressional testimony which begins at 10:00 a.m. ET.

Specifically, investors will be looking for Powell to reiterate the Fed’s very accommodative stance on policy for the foreseeable future as well as his responses to any questions regarding the recent, sharp rise in interest rates.

In the afternoon, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET which should not move markets unless very soft demand, and subsequently higher yields suggests the market is becoming more hawkish on Fed policy given recent “hot” inflation data.