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
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).
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Stuart Cowell
Market Analyst
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