USD: This is as fine a week as any for a dollar rally


 The orderly sell-off in US Treasuries has recently devolved into chaos, raising the question of whether the Fed is concerned this week. A slew of Fed speakers will take the stage this week, including Fed Chair Powell on Thursday, giving the central bank an opportunity to delay the Treasury's slide by at least expressing some concern. The US February ISM data and the jobs report, where an above-consensus 200k rise in the latter appears to be the possibility, could add fuel to the bond bonfire this week. The Fed's Beige Book will be published this week in advance of what is shaping up to be a pivotal FOMC meeting on March 17th. The irrational sell-off in Treasuries has spread through asset classes, impacting equities and eventually placing pressure on some stubbornly tight credit spreads. Market corrections tend to be quick and sharp after long, benign periods of risk-taking, and unless the Fed decides to verbally intervene in the bond market, risk assets will remain vulnerable over the coming week, with the dollar enjoying a brief corrective rally.

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