US futures are keeping higher, pointing to some improvement in investor sentiment
Wall Street stocks finished mixed overnight amid concerns that the U. S. Senate’s passage of a $1.9-trillion stimulus bill package will lead to higher bond yields through fueling expectations of an economic recovery and inflation. The yield on the 10-year Treasury note climbed to 1.60% yesterday from 1.55% late Friday. On the data front, the Commerce Department said wholesale inventories increased solidly in January despite a surge in sales. At the close of trade, the Dow Jones Industrial Average index rose 0.97%, the S&P500 index dropped 0.54%, and the tech-heavy Nasdaq Composite Index fell 2.41%.
Asian stocks recovered from earlier losses on Tuesday but finished on a mixed note, as investor optimism was tempered by worries about inflation and rising bond yields. Besides, market players remain conflicted over whether the stimulus will help global growth rebound faster from the downturn. As such, Japan’s benchmark Nikkei 225 added 0.99%, South Korea’s Kospi slipped 0.67%, Australia’s S&P/ASX 200 added 0.47%, Hong Kong’s Hang Seng gained 0.81%, while the Shanghai Composite slipped 1.82%.
In Europe, equities opened marginally lower on Tuesday, with the rebound in tech stocks is keeping the mood in Europe more tepid. US futures are keeping higher, pointing to some improvement in investor sentiment. On the positive side, the European Central Bank (ECB) Governing Council member Francois Villeroy said the “recession is behind us.” Meanwhile, the French Finance Minister Bruno Le Maire said that the economy will quickly recover once current restrictions are lifted.
As for currencies, the dollar eases marginally as Treasury yields retreat on Tuesday, with 10-year yields down by nearly 5 bps to 1.542%. As such, EURUSD bounced from fresh lows around 1.1835, targeting the 1.1900 figure early in Europe. Of note, the common currency is now holding above the ascending 200-DMA that could provide strong support should the selling pressure reemerges any time soon.