Market update – yields sharply into focus

Stuart Cowell HFM

Market News Today – The $1.9t stimulus package passes Senate with few changes, final ratification could be this week. Strong NFP on Friday boosted Stocks (+1.95%), Yields (1.554%) and USD (91.90) into close. Yield differentials now coming sharply into focus. Houthi missile attack on the key Ras Tanura oil refinery spiked USOil prices 2.2% to within 4 cents of $68.00. Gold ($1700) remains weighed by rising yields and BTC pivots around 50k. China is aiming for 6%+ growth in 2021, (2.3% 2020), with manufacturing still 25% of GDP. Trade balance +119% vs Feb 2020. JPY data better than expected (Nikkei down 0.42%), but German Industrial Production missed significantly.

European stock markets are broadly higher, with the DAX and FTSE 100 posting gains of 0.6% and 0.7% respectively. US futures and in particular the NASDAQ are underperforming as improved confidence in the US recovery is hastening the rotation out of tech stocks. Bonds meanwhile are under pressure again, with the German 10-year rate up 2.0 bp at -0.285%, the Treasury yield 2.8 bp at 1.594%.

This week – ECB & BOC along with Inflation from US & China and GDP data from UK & Japan.

Today – ECB asset purchase data, BoE’s Bailey.

Biggest (FX) Mover @ (07:30 GMT) USDCHF (+0.39%) Moved higher on open over 20 MA and 0.9300, now breached R1 at 0.9320. Faster MAs aligned and trending higher, RSI 66 and rising, MACD histogram & signal line aligned lower but appear to be turning higher, well above 0 line. Stochs. into OB zone. H1 ATR 0.0010, Daily ATR 0.0067.

Author

Stuart Cowell

HFM

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, c

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