The Federal Reserve Board announced it’s extending its four emergency lending facilities through March 31 which were set to expire on December 31. The Treasury had previously approved. The extensions apply to the PPP, the Commercial Paper Funding Facility, the Money Market Mutual Fund Liquidity Facility, and the Primary Dealer Credit Facility. The Fed has reiterated its programs have provided a critical backstop to the short term funding markets.
Treasury yields are dropping on the announcement that underscores the Fed’s commitment to accommodation. The front end of the curve is now in the green with the 2-year rate at 0.147% versus an overnight rate of 0.156%, while the key 10-year rate sits at 0.846%.
Former Chair of the FOMC Janet Yellen, long touted as the new Treasury Secretary, has been confirmed as President-elect Biden’s pick by members of the transition team¹. The full nominations are:-
- Janet Yellen: Treasury Secretary
- Wally Adeyemo: Deputy Treasury Secretary
- Neera Tanden: OMB director
- Cecilia Rouse: CEA chair
- Jared Bernstein: CEA member
- Heather Boushey: CEA member
¹https://www.bloomberg.com/news/articles/2020-11-30/yellen-to-forge-u-s-economic-comeback-as-biden-s-treasury-pick
Equities have opened lower with the USA30 trading down 240 points (-0.81%), the USA100 down 17.6 points (-0.14%) and the USA500 down 14.44 points (-0.40%) for the final trading day of the month.
Today’s best performing pair of the main crosses continues to be the GBPAUD; at 14:40 GMT the pair were 0.47% higher and trading at R1 and 1.8120. We identified the pair this morning at 07:30 GMT as it ran to the 50-hour moving average at 1.8082. A retrace to the daily pivot point and a hold of the 20-hour moving average at 1.8038 has been followed by the rally to R1 and the 200-hour moving average (1.8135).
Click here to access the Economic Calendar
Stuart Cowell
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
