■ S&P 500 advances 1.5% weekly, setting new record at 2,351 points, in spite of volatile yields

■ Yellen hints March rate decision is “live”, and so does Jan Inflation data

■ EUR/USD dips to 1.0521, but unwinds to 1.0616 as yield curve flattens back

■ Oil prices edge lower as inventories build faster than expected

The S&P 500 Index added 1.5% this week, reaching yet another all-time-high of 2,351.31 points. This increase concludes a fourth consecutive week of gains and a 3.5% increase for the index since the start of February.

What’s rather unusual here, however, is the fact that the road this week was a rather bumpy one. Pitfalls included Chair Yellen testifying to the Senate’s Banking Panel, where she argued that “Waiting too long to remove accommodation would be unwise.” Hawkish commentary lead to increasing expectations that the Fed will hike rates in its upcoming decision in March, thus making the economic environment less accommodative. Market reaction included the U.S. 10 year bond spiking from around 2.44% to 2.5%. January’s Consumer Price Index, released on Wednesday, similarly, saw U.S. annual inflation go from 2.1% to 2.5%, its highest since 2012. The 10y retorted by spiking at 2.522% on Wednesday.

While the 10 year did eventually slide downwards, towards the end of the week, oddly enough, much of the gain at the S&P was recorded between Monday and Wednesday, accounting for 1.4% of that 1.5% weekly gain. A mere 0.1% was left for Thursday and Friday combined, and some of that was the result of a bid by Kraft Heinz helping its stock increase, on Friday.

The S&P wasn’t unique in its behavior, with the Dow adding no less than 1.75% during the week and the Nasdaq concluding no less than a 1.8% increase. Like the S&P, the Dow and the Nasdaq also set new all-time-highs.

Not all markets behave equal

The Dollar’s behavior, meanwhile, draws a higher similarity to interest rate markets, than it does to rampant equity. After starting the weekly session around 1.0640, EUR/USD dipped as low as 1.0521 on Wednesday, in line with expectations for tighter policy infusing less USD into the market. The aforementioned unwind in bonds, however, saw it retreat back up, ending the week at 1.0616.

Swinging was harsher at USD/JPY. A 1.5% increase was at the start of the week, leading to a peak of 112.84. Things later took a strong downturn, however, on its second half, dragging the currency pair to end at a level of 112.84.

Oil prices experienced substantial selling pressure at the start of the week as the American Petroleum Institute reported a 9.94 mm increase at the size of crude inventories, vs, +3.5 mm expected. On Wednesday, similarly, the Department of Energy reported of a 9,527 K build of inventories vs. 3,537 K expected. Overall, the stronger selling pressure in oil has led to about half a percentage point weekly decline of prices, concluding at USD 53.37 per barrel.