Morning 2-8

  • 30-year yield traded above 2% for first time in a year.
  • Japans TOPIX & NKY Stock market touched 30 year high, Dax multi years high.
  • Brent above $60 for first time in a year, closing higher for 6 consecutive days.
  • Yellen and Biden both calling for swift passage of latest stimulus bill, but some cold water being thrown on it By Larry Summers who believes the $1.9 T price tag is a bit much and worried about Inflation risks due to the size of Deal. Per ITC markets” Tsy Sec Yellen (7 Feb CNN): We have to consider the risk that the stimulus plan could cause inflation, but we have the tools to deal with risk, repeats again that the risk is we don’t do enough on stimulus.
  • Speaking of Inflation   10-year breakeven rate printed 2.21% highest since 2014, 5s 30 curve steepest in years and trend appears too higher.
  • Draghi could be sworn In by Friday as next Italian PM per ITC markets “Italy’s League leader Salvini (6 Feb): Will decide next week whether to back a Draghi led govt, common ground had emerged in Sat’s discussion.”
  • Citi’s Global risk aversion index briefly popped last week, but now printing below lasts weeks GME driven highs. All is week in the World…
  • Oh, lookie here TESLA HAS BOUGHT $1.5B IN BITCOIN – SEC FILING
  • China car sales Rebounded in Dec +6.6% expected to move higher in 2021 Platinum 4.5-year highs.

Econ Data

Spain’s industrial production fell 0.6 percent from a year earlier in December 2020, following a revised 3.7 percent slump in the previous month. It was the smallest contraction in output since December 2019.

Industrial production in Germany stalled in December, following an upwardly revised 1.5% rise in November and compared to market forecasts of a 0.3% increase, amid new coronavirus lockdowns at home and other European countries.

Virus:

  • South Africa to halt use of Astra shot due to limited effectiveness (BBG)
  • Newly reported coronavirus cases in the U.S. fell below 100,000 for the first time this year, and hospitalizations continued to decline, as vaccination rollouts picked up speed. -WSJ
  • But as the Lunar New Year holiday approaches, WSJ’s Jonathan Cheng explains that China is trying something different: handing out cash and gifts to those who agree not to travel.
  • IFR news “Virus infections have dropped in the United States has improved according to latest CDC reports- Rtrs, but in Europe both Health minister Spahn in Germany and UK PM Johnson are advocating for strict controls so no end to lockdown pressures- Rtrs news. That mixed news was followed by German production growth holding due to Chinese demand. Treasury secretary Yellin in comments over the weekend emphasized the need for a large fiscal stimulus bill and with-it full employment would be restored- Rtrs news.

Markets:

  • Stocks Continue to run and why wouldn’t they? Low rates more stimulus and the appearance that Virus is starting to be defeated SPX, NDX record highs last week Multi decade highs for Japanese stocks.
  • Italy’s Mib +1 year high,10-year BTPs 1-month lows

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