Daily summary: Volatility jumped in global equity markets

• Quarter-end rebalancing
• US 10-Year Treasury yield rose after weak 7-year auction
• Better-than-expected weekly jobless claims

European indices finished today's choppy session in mixed moods as investors continued to monitor the rising number of new COVID-19 cases and a slow vaccine rollout. These two topics will dominate a two-day European Council summit ending Friday, which could delay plans to ease coronavirus restrictions. Meanwhile, German consumer confidence jumped to five-month high, however data was gathered before the announcement of the lockdown extension until April 18th. DAX 30 cut some losses and finished 0.8% higher after touching its lowest level since March 15th earlier in the session. CAC40% rose 0.09% and FTSE100 fell 0.57%.

US indices are swinging between gains and losses, with both Dow Jones and S&P 500 trading near the flat line, while Nasdaq fell 0.8%. Early in the session stocks came under pressure after new comments from the Fed Chair. Powell said that the economy is recovering faster thanks to massive fiscal help and vaccine distribution which allow the central bank to dial back the help it has provided, though he said now is not that time. It turns out that today's sharp movements may largely be related to calendar factors and not necessarily to the market sentiment itself. Bank of America indicates that the 25th of the last month of a quarter is usually increased activity regarding the relocation of assets in financial institutions. According to the bank's calculations, nearly $ 90 billion must be obtained from the sale of shares and then allocated to the purchase of bonds. In turn, JP Morgan in his calculations indicates that investment funds must carry out such an operation worth 136 billion dollars. This is due to the fact that institutions have some guidelines on how much of the money is to be held in stocks, in bonds, and in other assets as well. If we have a situation in which the first quarter was very good for the equity market, but disastrous for the bond market (a strong increase in yields is obviously the result of a decline in the prices of bonds themselves), this means the need to relocate funds. One should also not forget about the recent event related to the Fed's decision regarding the SLR. Banks may not want to give up the additional pool of bonds which they held, as their sale is unprofitable at this point. Therefore, in order not to incur additional cost of maintaining additional reserves, they may decide to sell other assets, such as stocks. On the data front, initial claims fell more than expected to a 1-year low of 684K and GDP growth for Q4 was revised slightly higher to 4.3% from 4.1%.

WTI crude fell more than 4.3% and is trading slightly above $58.50 a barrel, while Brent is trading nearly 4.0% lower around $61.90 a barrel as investors fear that tighter pandemic curbs will hurt demand. News of the grounding in the Suez Canal, potentially blocking 10 tankers carrying 13 million barrels of oil, helped to curb the losses. Elsewhere gold fell 0.25% to $ 1,729.00 / oz, while silver is trading 0.20 % higher, above $ 25.10 / oz. However, appreciation of precious metal prices is still limited by a stronger dollar. Meanwhile  yield on the benchmark 10-year Treasury note increased to as high a 1.64%, before retreating to 1.62% after a note auction. The Treasury sold $62 billion in 7-year notes an auction-high yield of 1.3%, with the so-called bid-to-cover ratio coming at 2.23, up from the 2009 low of 2.04 in February but down from the six auction average of 2.28 and one of the worst on record.

Silver  - buyers manage to erase early losses and price returned above psychological level of $25.00. If buyers will manage to uphold momentum then upward move may be extended towards resistance at $25.42 or even next psychological level at $26.00. On the other hand, if sellers will manage to regain control, then another downward move towards support at $24.38  could be launched. Source: xStation5