US Open Note – Stocks soar; dollar continues to slip as US yields fall



US dollar back to losses

A downside move in the US dollar and the significant climb in US stock futures are the major themes of the day. The question is if this recovery is being driven by the fall in US yields after the milder-than-feared US CPI data. The US dollar index is approaching the 91.60 level, while dollar/yen is in the process of completing the third straight negative day around 109.00. Futures tracking the S&P 500, Nasdaq 100 and Dow Jones were pointing to a slight positive open, after record closes for the S&P 500 and the Nasdaq yesterday.

JPMorgan Chase (JPM) reported earning results on Wednesday that propelled past estimates. The largest US bank gained $14.3 billion in net income from $11.4 billion the previous year, driven by credit reserve releases of $5.2 billion.

Euro bulls pick up steam as dollar struggles

The European Union is ready to activate a five-year dept plan of €800 billion by September to recover from the coronavirus pandemic, mainly by selling bonds and bills. Euro/dollar has finally breached the wall around the 40-day simple moving average (SMA) and is set to meet the key resistance of 1.1985, while euro/yen is struggling around the 130.30 level.

Meanwhile, euro/pound is holding around 0.8680, after a rebound off 0.8470 in the previous week. Pound/dollar is climbing from the 1.3670 significant support. Pound/yen may gather interest in the coming sessions as the pair is falling beneath the short-term SMAs, crossing below 150.00.

Aussie, kiwi and oil return to positive mode

In the commodity currencies, aussie/dollar is posting notable gains, trying to reach the 0.7700 round number, while kiwi/dollar surpassed the 0.7100 psychological mark. However, dollar/loonie is still in a horizontal move around 1.2560.

Elsewhere, oil prices are heading north after several flat days, with WTI meeting the $61/per barrel zone and the gold price continues the sideways move near $1,743/per ounce.

Johnson & Johnson vaccine linked with cases of clotting?

In the US, there are a lot of concerns about links of clotting from the Johnson & Johnson Covid-19 vaccine, pausing the vaccination, with the company then agreeing to postpone the launch in Europe as well.

In the Netherlands, Prime Minister Rutte stated that lockdown measures will continue at least until April 28 as the coronavirus. Italy, Germany and France are going back into lockdown too and the Q2 outlook remains soft.

Later in the day, a speech by Fed Chair Powell at 17:00 GMT will be in focus before the Economic Club of Washington in a virtual event.

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