- UK Chancellor Sunak unveils more stimulus
- US 10-year Treasury yield rises again
- US crude inventories rise the most on record
European indices finished today's volatile session mostly higher despite the fact that Treasury yields began to rise again. UK Chancellor Rishi Sunak delivered his 2021 budget to Parliament, promising to do "whatever it takes" to support the UK economy through the final months of COVID-19 restrictions. The measures included extending the government's furlough scheme until the end of September, as well as the universal credit uplift and the reduced rate for VAT on hospitality and tourism. On the data front, final figures for February's PMI survey showed the services sector activity in the Eurozone and France contracted less than initially thought. Preliminary data from Italy and Spain surprised on the upside while the Germany services PMI was revised slightly lower.
Meanwhile across the ocean, Dow Jones managed to erase early losses and is trading higher, while S&P500 and Nasdaq fell 0.47% and 2% respectively as the 10-year Treasury yield extended its gains. The benchmark rate climbed more than 8 basis points to 1.49% and is still raising concerns about equity valuations and a pickup in inflation. Higher yields negatively affected tech stocks which are relying on easy borrowing for superior growth. However negative sentiment towards tech stocks increases interest regarding cyclical companies. Financials, industrials, and energy, tied to a reviving economy, led four of the eight major sectors higher, with Boeing Co and JPMorgan Chase among the biggest gainers. Meanwhile, the ADP report showed US companies added less jobs than expected in February and the ISM Services PMI fell to a 9-month low.
WTI crude rose more than 3.0% and is trading around $61.60 a barrel, while Brent is trading 2.70% higher around $64.40 as a record build of 21.563 million barrels in US crude inventories raised expectations that during tomorrow’s meeting OPEC+ will be rolling over oil production cuts from March into April instead of raising output. Elsewhere gold fell more 1.0% to $ 1,718.00 / oz, while silver is trading 1.7 % lower near $ 26.28 / oz.
Gold fell sharply today, but sellers failed to break below the major support at $1700/oz and precious metal managed to partially erase early losses. However as long as gold is trading inside the descending channel, the trend remains downward and declines may deepen. Only breaking above the upper limit of the formation will invalidate the bearish scenario and upward impulse towards resistance at $1754 could be launched. Source: xStation5
