Rates moved both higher and steeper again last week. Curve steepening has been pronounced with the 2-10 at 1.30% and the
3m-10 at 1.40%.

The holiday shortened week saw encouraging economic prospects translate to a textbook, pro-cyclical moves across markets as evidenced by rallies in cyclical areas of the stock market, commodities, and bond yields.

Primary drivers in the market last week included the signing of the American Recovery Act, exception­al progress on vaccine distribution, and a supportive calendar of economic reports. All three large cap U.S. indices (S&P, DJIA, NASDAQ) set new record highs while small caps surged over 7%.

The week ending February 5th saw global equity markets rally sharply, a steepening yield curve, and a strong bid for USDs and commodities.

Equity markets surged (6%-7%) to their best showing since April last week as election outcomes began to materialize.

Good news on the vaccine front last week put a positive charge into equity markets which after an up and down week left the S&P 500 at a new record high.

The holiday shortened Thanksgiving week began with a third consecutive Monday morning booster shot (AstraZeneca) which sustained throughout the week leaving the S&P 500 with a healthy 2.3% gain.