News

US Dollar Extends Gains as Treasury Yields Push Higher

USD

The dollar index which measures the greenback against a basket of major currencies extended its upside rally, trading at 93.04, the highest since mid-November. The continuous rise in US Treasury yields supported the buck in outperforming rivals. This rise is translating the optimism over the US economic recovery, which is picking up as the vaccination rollout continued smoothly. On the other hand, the fears of another setback in the economic activity in the Euro region due to the latest outbreak supported additional flow to the dollar. The EURUSD declined to $1.1741, the GBPUSD eased to $1.3758, and the USDJPY rallied to 110.18, the highest since March 2020.

Equities

The mixed performance in the US equity market prevailed as the US Treasury yields continued to push higher. Investors are still favoring cyclical and value stocks relative to technology and growth stocks. This rotation is easily noticed by comparing the Dow Jones performance to the Nasdaq. The Dow Jones Industrial Average futures rose to a record high of 33132, while the tech-heavy Nasdaq pared gains, falling to 12880. The S&P500 futures eased a little to 3953.

Metals

Precious metals prices tumbled as the dollar raced higher along with US Treasury yields. The price of a gold ounce declined to $1702, the price of a silver ounce dropped to $24.50, and palladium futures dipped to $2521.

Oil

Oil prices surrendered partial gains as investors anticipate OPEC+ meeting. Oil producers will meet to discuss their output plan, where their decision will have a direct impact on the market. The recent price drop from the interim top and fears of the impact of the European lockdown on the oil-demand level will make it hard for producers to raise output. Also, the US production is picking up with Baker Hughes oil rig count mounting to 324, implying further risk on OPEC+ market share. The West Texas Intermediate crude May contract hovered around $61.50, and Brent Blend June contract dipped below $65.

Major Economic Events

GMT Country Event Expectation Previous

9:00

EZ

 Consumer Confidence (Mar)

-10.8

-10.8

12:00

EZ

 German CPI (MoM) (Mar) 

0.5%

0.7%

14:00

US

 CB Consumer Confidence (Mar)

96.9

91.3

20:30

US

 API Weekly Crude Oil Stock

-

2.927

 

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