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March 01, 2021
Bloomberg

Good morning. $100 oil talk, Buffett's letter, Golden Globe glory. Here's what's moving markets.

$100 Oil Talk

$100 a barrel oil is being spoken about again, and while Bank of America's call for Brent crude to hit that level over the next few years may seem premature, such speculation reflects how Covid-19 vaccines have transformed the outlook for crude. Prices have rallied to pre-virus levels, as a glut of supply vanishes and after U.S. production took a hit from freezing storms. OPEC+ is expected to agree to increase production when it meets on Thursday. Brent crude trades at just above $65 this morning. Meanwhile, government bonds extended a rebound as equity futures rose and the dollar dipped, meaning potentially calmer markets ahead. Last week's bonds turmoil left traders weighing up how central bankers will react to the recent jump in yields. Finally, Bitcoin is facing fresh concern about how much energy is needed to mine the cryptocurrency.

Buffett's Letter

Legendary investor Warren Buffett released his famous annual letter, using it to highlight how his firm, Berkshire Hathaway, has seen its stake in Apple swell. The Oracle of Omaha has amassed $120 billion of Apple stock since his conglomerate started purchases in late 2016, while only spending about $31 billion building that stake. Part of the increase was due to the iPhone maker repurchasing its own stock, which is something Berkshire is doing itself. Meanwhile, some readers were left disappointed that the 90-year-old didn't offer much opinion on issues like the pandemic and politics, or race and equality.

Golden Globe Glory

Watch Disney and Netflix shares in New York later after the former grabbed the top award at the Golden Globes for its film "Nomadland," while Netflix dominated in television with hits like "The Crown" and "Queen's Gambit." The two studios won 15 of the prizes handed out Sunday by the Hollywood Foreign Press Association in a NBC broadcast hosted by comic actors Tina Fey and Amy Poehler. Other streaming services, particularly Amazon.com, also picked up key prizes, with "Borat Subsequent Moviefilm" winning best picture, musical or comedy. Read the full list of winners here. 

Brazilian Variant Tracked

Six cases of a Brazilian coronavirus variant have been detected in the U.K., Public Health England said, warning the mutation may be more resistant to vaccines. Officials are contacting all passengers on a specific flight from Sao Paulo to London Heathrow via Zurich in order to test them and their households. Heathrow, meanwhile, will begin charging departing passengers an extra fee in an effort to claw back costs spurred by the pandemic. Elsewhere, Italy will tighten social curbs in Milan, Turin and some other areas starting today, while South African has eased restrictions as the rate of new infections dropped, scrapping most limits on alcohol sales. On vaccines, Germany will soon reconsider its decision not to recommend the AstraZeneca vaccine for people over 65.

Coming Up…

Manufacturing purchasing managers index data are coming from most regions with Chinese numbers showing the recovery slowed in February. Meanwhile, U.K. mortgage approvals statistics numbers are due amid reports of fresh support for Britain's housing sector at this week's budget. Earnings season is winding down but big names to come this week include lockdown winner HelloFresh and London Stock Exchange Group as it navigates the post-Brexit world. Check out our review of the latest reporting period. 

What We've Been Reading

This is what's caught our eye over the weekend. 

And finally, here's what Cormac Mullen is interested in this morning

Last week's global bond selloff was an unequal one, creating relative winners and losers on either side of investors' inflation expectations. As noted by Citigroup, the spread between benchmark U.S. Treasury yields and a basket of bonds from countries that traditionally suffer from low inflation -- such as Germany, Japan and Switzerland -- is widening, while it is narrowing for a more reflationary cohort including Australia, Canada and New Zealand. That will not have gone unnoticed by currency traders, as it suggests investors have moved on from expectations for the return of a nebulous "global" inflation and are becoming more discriminating on a country and regional basis. Given Europe and Japan's past struggles with disinflation and sometimes outright deflation, that could mean extra headwinds for the euro and the yen, should the trend continue. It could also give an extra fillip to the Aussie dollar and the kiwi. And together with President Joe Biden's soon-to-be approved stimulus bill, with the bulk of the earmarked $1.9 trillion in proposals likely to stay intact, it could also give some support to the beleaguered U.S. dollar.

Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo.

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