US stocks declined sharply in the futures market as yields rose following the passing of the $1.9 trillion stimulus package in the Senate. The Nasdaq 100 index declined by more than 1.80% while the Dow Jones and S&P 500 index fell by 0.70% and 0.25%, respectively. In the same period, the bond sell-off accelerated, with the yield on the 10-year rising to 1.60%. The 30-year rose to 2.30% while the 2-year rose to 0.14%. Meanwhile, in Europe, the main indices rose, with the DAX, CAC 40, and FTSE 100 rising by more than 0.50%.
The price of crude oil erased some of the earlier gains as investors assessed the impact of an attack on Saudi Arabia terminals by Houthi rebels. In a statement, Saudi Arabia said that the missiles were mostly intercepted and that shipping would not be interrupted. Still, there is a possibility of more conflict in the region in the near term, which could have a positive impact on prices. Crude oil also rose earlier because of the supply curbs agreed in a virtual OPEC+ meeting held last week and the new stimulus deal.
The Japanese yen declined against the US dollar mostly because of the differences between US and Japan’s yields. Earlier today, data from Japan showed that the coincident indicator rose from -0.4% in January to 3.5% in February. The leading index increased from -0.8% to 1.4% while the economy watchers current index increased from 31.2 to 41.3. Later today, the country’s statistics agency will publish the final estimate of the fourth-quarter GDP and household spending and income data.
The ongoing sell-off of technology stocks continued today. The tech-heavy index is trading at $12,458, which is significantly lower than the all-time high of $13,909. On the four-hour chart, the price is significantly below the 25-day and 15-day exponential moving averages (EMA). The Average True Range (ATR) has also continued to rise, which is a sign of high volatility. Therefore, the index may continue falling today as bears attempt to retest last week’s low of $12,210.
The EUR/USD dropped to an intraday low of 1.1862. On the four-hour chart, the pair is slightly above the lower line of the Bollinger Bands. It is also below the important support at 1.1950. At the same time, the MACD has declined while the Average Directional Index (ADX) has continued to rise. The ADX is seen as a measure of the strength of a trend. Therefore, the pair may keep falling as bears target the next support at 1.1800.
The USD/JPY pair rallied to the highest level since June last year as traders focused on the stronger US dollar. On the daily chart, the price is still above the short and long term moving averages while the Relative Strength Index (RSI) rose to the highest level in more than a year. Also, the price is above the Ichimoku Kinko Hyo. Therefore, the pair may continue rising in the near term.
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