US Open Note – Stocks in the red, dollar barely heals, oil surrenders gains



Dollar nudges a tad higher with rising yields, major forex pairs capitalise

Major stock markets eased off their recent highs while the dollar index managed to gather some footing around 90.82, prodding just above the 91.00 mark. The recovery narrative, with stimulus in the pipeline and rising yields - 10-year Treasuries advanced to 1.62% - seems to be very much alive, even though the Fed's insistence that it won't raise rates prematurely has cooled the dollar lately. Markets’ subdued demeanour and dollar weakness in today’s quiet calendar has seen the clear beneficiaries be the euro and the pound, touching $1.2079 and $1.4008 respectively. The swissie and the yen were relatively stagnant versus the dollar.

Oil has forfeited its latest gains to $64.36 per barrel, while gold has remained largely unchanged, now consolidating around $1,775/oz.

The euro’s latest good news around the immunization project gaining some speed has kept some positive drive in the common currency, further supported by rising Eurozone yields and the feeble greenback. Approved usage of Johnson & Johnson vaccines would definitely be a positive note. However, awaited developments around President Joe Biden’s infrastructure package could be a significant part of the formula towards the common currency’s longer positive outlook, as well as the stance of the ECB on Thursday.

Across the channel in the United Kingdom, the unemployment rate was slightly more positive at 4.9% in February versus 5.0% in the previous month. Also, the number of people claiming unemployment dropped in March, reflected in the claims data coming in at 10.1K, below the forecast of 24.5K although average earnings were not up to par. Nonetheless, the pound has retreated somewhat off its latest peak of 1.4008, despite dollar weakness, where three rallies came to a halt in March. That said, should coronavirus infections continue to shrink and the economy gear up to full reopening, the pound may turn out to be the temporary outperformer, should the dollar continue to lag.

Oil takes a hit; positive picture may endure

Does optimism continue to fuel strength in the black liquid? At a first glance it may appear that expectations surrounding more robust oil demand are the definitive catalyst for WTI futures’ positive outlook. However, today’s rally may be more connected to reduced output from Libya, where exports from the port of Hariga were halted. That said, WTI futures have relinquished today’s gains dipping from $64.36 to $63.41 per barrel.

Apple unveils merchandise

Apple’s first product presentation will be around a new iPad Pro line, Airtags and iMac desktops, which are said to include new powerful processors coupled with accessory face lifts. Delivery of these products could be around the corner, and may boost Apple’s sales and subsequently the share price.

Later on, New Zealand’s inflation data will be released at 10:45 GMT, while Australian retail sales will be due at 01:30 GMT.

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