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Treasury yields rose along with commodities before US President Joe Biden unveiled an economic plan that included a $ 2 trillion increase in infrastructure. Shares were mixed, with traders weighing in on inflation and the fiscal impact of the new plan.
US index futures and European stocks were little changed after the benchmark Asian equity index posted a drop on day two. The dollar has fluctuated between gains and losses, still heading for its best quarter in a year. The Bloomberg Commodity Index and emerging market currencies led by the Russian ruble climbed for the first time in three days.
Investors, shaken by the collapse of Bill Hwang’s Archegos Capital Management, look to growth and inflation as volatility spurred by forced sales declines. As Europe’s fight against vaccinations and the resurgence of the coronavirus have tempered growth expectations, the rollout of the US vaccine is exceed targets.
“Even if President Biden’s infrastructure projects come with a sizable sting, economic reflation and the history of reopening should limit any decline in interest rates,” ING Groep NV strategists wrote. , including Antoine Bouvet and Padhraic Garvey, in a note. “The rate hike goes beyond a simple fiscal stimulus.”
Banks weighed on Japan’s equity gauge after Mitsubishi UFJ Financial Group Inc. joined the list of companies around the world to suffer a pullback in Chinese stocks, while the Australian index outperformed. The dollar-yen pair was on track for a day six rally amid a report that Hitachi Ltd. will pay $ 8.5 billion to acquire US software company GlobalLogic Inc.
Ten-year Treasury bill yields rose for the fourth time in five days, trading near a 14-month high. Gold stabilized after falling for two days, but remained below 1,700 per troy ounce. West Texas Intermediate crude rose ahead of the April 1 meeting of OPEC and its allies.
An indicator of Chinese manufacturing industry picked up in March, suggesting that the domestic recovery is gaining momentum as economic activity returns to normal and demand strengthens.
Stephen Innes, Chief Global Market Strategist at Axi, discusses the US dollar, its investment strategy and outlook for oil.
Some key events to watch this week:
- President Biden is expected to unveil his infrastructure program on Wednesday.
- EIA Crude Inventory Report Wednesday.
- OPEC + is meeting on Thursday to discuss production levels for May.
- China Caixin PMI expected Thursday.
- US Employment Report for March Friday.
- Good Friday begins Easter weekend in countries like the US, UK, France, Germany, Australia, and Canada.
Here are some of the main developments in financial markets:
Stocks
- Futures contracts on the S&P 500 index were little changed at 8:30 a.m. London time.
- The Stoxx Europe 600 index was little changed.
- The MSCI Asia Pacific index fell 0.7%.
- The MSCI Emerging Markets Index fell 0.4%.
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%.
- The euro gained 0.2% to $ 1.1737.
- The British pound rose 0.1% to $ 1.3759.
- The onshore yuan strengthened 0.2% to 6.557 per dollar.
- The Japanese yen weakened 0.3% to 110.67 per dollar.
Obligations
- The yield on 10-year Treasuries rose two basis points to 1.73%.
- The yield on two-year Treasuries climbed less than a basis point to 0.15%.
- Germany’s 10-year rate gained one basis point to -0.28%.
- The UK 10-year yield rose one basis point to 0.833%.
- Japan’s 10-year yield rose one basis point to 0.097%.
Basic products
- West Texas Intermediate crude gained 0.7% to $ 60.95 a barrel.
- Brent gained 0.7% to $ 64.57 a barrel.
- Gold strengthened 0.1% to $ 1,686.29 an ounce.
– With the help of Vildana Hajric and Joanna Ossinger
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