The greenback turned mixed following a sudden broad-based sell-off seen at the London fixing yesterday
US stocks gave back early gains to finish broadly lower overnight despite bond yields continued to ease across the board. After its best performance since June a day earlier, the S&P 500 fell 0.8% on Tuesday, while the Dow Jones Industrial Average and the tech-heavy Nasdaq Composite shed 0.46% and 1.69%, respectively.
In a sign of some improvement in risk sentiment, Asian markets rallied on Wednesday, as the yield on the 10-year Treasury inched down to 1.40% early in the day. Australia’s S&P/ASX 200 gained 0.82% following the report that the country’s economy grew 3.1% in the fourth quarter versus +2.5% expected. However, the GDP was 1.1% lower compared with the same quarter in the previous year. In Hong Kong, the Hang Seng rallied 2.54%, Tokyo’s Nikkei 225 index added 0.51%, while the Shanghai Composite index advanced nearly 2.0%.
In Europe, equities opened higher across the board on Wednesday, as regional investors were inspired by a rally in Asia amid the ongoing decline in bond yields from recent highs. The pan-European Stoxx 600 climbed 0.7% in early trade, with US stock index futures were higher in premarket trading. In the UK, market players will be focused on taxation and spending plans set to be presented by Chancellor Rishi Sunak later today. Also, service PMIs could affect investor sentiment within hours.
Meanwhile, the dollar turned mixed following a sudden broad-based sell-off seen at the London fixing yesterday. Recovery attempts are looking shallow at the moment, and it looks like the upside potential surrounding the greenback would be limited ahead of the key events of the week including Powell’s speech (on Thursday) and NFP employment data (on Friday).
Elsewhere, oil prices have regained a bullish bias on Wednesday following four days of losses. However, Brent crude lacks recovery momentum to make a decisive break above the $63 figure ahead of tomorrow’s OPEC+ meeting. The alliance could announce a gradual increase in crude production, which is mostly priced in already.
