Equities:
The dovish tone made by the Fed Chairman Jerome Powell concerned the market with potential higher inflation expectations. As a consequence, the Nasdaq Composite fell 2.11% on Thursday. The S&P 500 (US500) fell 1.34% erasing its early gains in 2021, and the Dow Jones Industrial Average(US30) followed, down 1.11%.
The Asian markets open on Friday are set to open lower with futures in Australia, Hong Kon, and Japan all pointing lower.
Despite the mounting concern over higher long rates and potential for higher inflation, portfolio manager of global asset allocation at Fiera Capital – Candice Bangsund argues that rising bond yields may be a sign of stronger growth expectations, which could see corporate improve profits.
Bonds & Yields:
The stronger US economic data underpinned by inflation concerns saw the US 10-year yields rose by 8 points to 1.55%. The US 2-year yields were steady and rose by 0.4 points to 0.147%.
Forex:
Major currencies were weaker against the US dollar overnight. The dollar index (DXY) rose 0.7%. The Euro fell from highs around $1.2063 to lows near $1.1962. The Australian dollar fell from highs around $0.7815 to lows near $0.7709. The Japanese yen was lower against the dollar from lows near 106.97 yen per dollar to highs near 107.99 yen per dollar.
Commodities:
Global oil prices were higher on Thursday after the OPEC+ alliance surprised the market to keep output unchanged. As a result, WTI crude rose 4.5% to $64.03 per barrel and Brent oil (XBRUSD) rose 4.53% to 66.97 per $barrel.
Metals:
Spot gold (XAUUSD) traded lower by 1.22% to near $1695 an ounce. Iron ore was higher by 0.6% to a 9-year high of $178.45 a tonne.
Key events to watch this week:
– U.S. February unemployment data (Friday)
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