Equities:
The US equities were mixed on Monday. Tech stocks were sold off heavily upon rising treasury yields with Nasdaq Composite and S&P 500 down 2.41% and 0.54% respectively. On the other hand, the Dow Jones Industrial Average climbed 0.97%, with cyclical and value stocks poised to benefit from the economic recovery fuelled by the $1.9 trillion Covid-19 relief package.
In Asia, futures pointed to modest gains in Australia, Hong Kong and Japan after weak closings on Monday.
The senior equities portfolio manager at AllianceBernstein, Valerie Grant pointed out this rotation from growth to value upon a projected stronger economic recovery, with tech stocks selling off while sectors that underperformed last year rallying.
Bonds & Rates:
Treasury yields on Monday were higher again with the US 10-year yields climbed to 1.61% and the US 2-year yields up 2 points to near 0.165%. This reflects higher inflation expectations being priced in by investors.
Forex:
The US dollar strengthened against major currencies overnight. The Euro fell from highs around $1.1932 to lows near $1.1844. The Australian dollar fell from highs around $0.7714 to lows near $0.7637. The Japanese yen was lower against the dollar from lows near 108.31 yen per dollar to highs near 108.96 yen per dollar.
Commodities:
The rally in the US dollar sent commodity prices lower on Monday. Brent traded briefly above $70 per barrel before retrieving lower to $68.1 per barrel. WTI crude also fell 3.34% to $64.92 per barrel.
Spot gold fell $23 an ounce to near $1681.25 an ounce. Iron ore down small to $174.15 a tonne.
Metals:
Spot gold (XAUUSD) fell $23 an ounce to near $1681.25 an ounce. Iron ore down small to $174.15 a tonne.
Key Events This Week:
- Japan GDP data (Tuesday)
- EIA oil inventory (Wednesday)
- US February CPI (Wednesday)
- ECB monetary policy meeting (Thursday)
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