fxstreet.com 23 Feb, 2021 12:45 am

Dramatic market adjustment continues

Dramatic market adjustment continues
Overview: Rising rates continue to spur a rotation and retreat in stocks. Yesterday the NASDAQ sold-off by nearly 2.5% while the Dow Industrials eked

European yields are 3-4 bp higher after staging a sharp recovery following comments yesterday from ECB President Lagarde warning in effect, the central bank stands ready to resist premature tightening.The central bank often engages in "smoothing operations" in the foreign exchange market late in the local session and was put on the US Treasury's watch list in December.The central bank meets the first thing tomorrow in Wellington, and although no change in policy is expected, officials will likely feel more confident that the recovery is gaining traction.More broadly, Macklem may seem more upbeat than the central bank's forecast for a nearly 3% contraction here in Q1 suggests.

3% yesterday after staging a bit of a recovery spurred by the central bank offering dollar swaps.Brazil's central bank meets on March 17 (the same day as the FOMC meeting concludes), and the swap market is pricing in the likelihood of a 50 bp rate hike.

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