Equity markets are moving higher to end the week as a mixture of a sharp intraday rebound in the US as well as relief the EU has stepped back from imposing vaccine export controls helps underpin a bid to risk. Tech and banks outperformed in Asia, with the latter helped by the Fed’s decision to allow banks to resume dividend payments. Broader macro indicators point to risk-on in EUROPE with the a touch weaker, underpinning commodities, notably oil, up 2%.
US markets closed higher near best levels in what was a risk-on tape with the market rebounding sharply following some early weakness spurred on by vaccines optimism amid President Joe Biden’s plan for an “economic rejuvenation”, which continues to underpin global risk sentiment.
Asian shares bounced back from a three-month low on Friday. Thanks to a late-day rally on Wall Street, optimism about global economic recovery was overshadowed by rising tensions between the West and China most of this week.
climbed amid a prolonged effort to unblock the Suez Canal.
Pressure Remains On Euro
Pressure remains on the single currency, and there has been a steady downtrend this week for with lower lows and lower highs. It has come a relatively long way in a short period of time, and with risk sentiment finding a bit of a base, the likelihood of a short-term correction is rising.
The overall bearish tone should remain. Thursday’s EU leaders’ meeting did not yield an agreement and, in fact, showed anything but unity. The slow vaccine roll-out is reflected in sovereign bond markets as well, with the Bund versus UST spread above 2pp again. The top side should be fairly limited. Month-end/quarter-end approaching as well.
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