News

US Futures Pare Gains as Treasury Yields Soar

Equities

Futures tied to US stock indices drifted lower, erasing gains earned following the Fed meeting as Treasury yields resumed upside rally. The Federal Reserve affirmed its current policy stance, until reaching substantial progress. The risk-on mood prevailed following Powell's presser. However, the US 10-year yields shot higher in early trading to 1.735%, the highest since January 2020. The rising yields around the world are affecting stock valuations and weighing on investors' appetite. The tech-heavy Nasdaq tumbled to 13039, the S&P500 futures dropped to 3948, and the Dow Jones Industrial Average futures fell back below 33000.

USD

The dollar index which measures the greenback against a basket of major currencies recovered partially from yesterday's losses rising to 91.67 as Treasury yields jumped. The buck weakened significantly against peers following a dovish tone from the Federal Reserve last night. However, the bond market has another word, the 10-year yields jumped by 10 basis points, reviving the dollar strength. The USDJPY pushed higher to 109.30, the EURUSD eased to $1.1942, and the AUDUSD surrendered gains falling to $0.78.

Metals

Precious metals prices declined during the past couple of hours after trading higher post the Fed. The dovish tone lifted prices, but the upsurge in yields, led to giving up gains. The price of a gold ounce declined to $1735 after trading as high as $1755, the price of a silver ounce trimmed gains dropping to $26.35, while palladium futures jumped to 2631, the highest since late February 2020.

Oil

Oil prices drifted lower for the fifth consecutive day as investors await further positive drivers. The US Energy Information Administration reported a buildup of 2.396 million barrels in US inventories. On the other hand, market participants are afraid that the increased supply by non-OPEC members wouldn't be matched with a significant demand, which could drive prices into a correction from recent highs. The West Texas Intermediate April contract fell to $63.84, and Brent Blend May contract declined to $67.16.

Major Economic Events

GMT Country Event Expectation Previous

8:00

EZ

 ECB President Lagarde Speaks 

-

-

12:00

UK

 BoE Interest Rate Decision (Mar)

0.10%

0.10%

12:00

UK

 BoE QE Total (Mar)

895

895

12:30

US

 Initial Jobless Claims

700

712

12:30

US

 Philadelphia Fed Manufacturing Index (Mar)

23.0

23.1

 

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