Pulse of the Market-European Central Bank

To the market’s surprise, the European Central Bank announced plans to purchase bonds at a “significantly higher pace” over the next quarter. The decision was motivated by the recent rise in yields and concerns that “headline inflation is likely to increase in the coming months,” according to central bank President Christine Lagarde. Yesterday’s move widens their distance with the Federal Reserve who does not see the increase in bond yields and inflation as a problem. This comes as the European Union’s vaccine rollout faces more setbacks with delivery delays and new concerns about AstraZeneca’s vaccine. The vaccine’s use was halted temporarily in a few countries on concerns about increased risk of blood clots. Euro traded lower after the ECB decision but the decline did not erase all of its earlier gains against the dollar. The pair ended the day unchanged in part because of the central bank’s economic projections. The ECB raised its GDP and inflation forecasts for 2020 and 2021. This year, they expect the economy to expand by 4% and inflation to rise 1.5%. While the ECB expects the annualized CPI rate to hover around 1.5%, they said it could rise to 2% on a technical and temporary basis. Until the Eurozone recovery gains momentum, we continue to expect EUR/USD to underperform, especially if U.S yields continue to rise. The Federal Reserve meets next week and they’ll update their economic projections. Stronger numbers will underscore the divide between the U.S and Eurozone recoveries this year. The U.S dollar traded lower against most of the major currencies despite improvements in jobless claims and according to the Biden Administration, stimulus checks will start going out by the end of the month. The continued rise in Treasury yields reflects the market’s optimism. Producer prices and the University of Michigan’s consumer sentiment index are scheduled for release today. Stronger numbers are expected all around. After a week of quiet, sterling comes into focus on Friday with the release of monthly GDP, industrial production and trade data. Most of these reports are expected to be better as the U.K economy continues its recovery.

U.S Stock Market- Traditional Agricultures Soybean

Soybean futures edged higher today as concerns about crops in South America stoked worries over global supplies. Soybeans are down 1.5% for the week, the first weekly loss in five and the biggest seven-day slide in nearly two months. Corn futures down more than 1.5% for the week, the second straight weekly fall. Wheat futures down more than 1.5% for the week, the second straight weekly loss. Weekend storms are set to soak the U.S Plains wheat belt, much of which has endured dry conditions for several months.

U.S Stock Market-Precious and Base Metals Gold

Gold eased off a one-week high yesterday after U.S Treasury yields rose after better-than-expected jobless claims data. Spot gold fell 0.1% to $1,725.00 per ounce, after hitting its highest since March 3 at $1,739.63 earlier. U.S gold futures settled little changed at $1,722.60. 10-year Treasury yields have now bounced again, which has stabilized the dollar and is taking some air out of gold. We may have seen short-term lows at $1,680 per ounce, but a higher-yield environment is likely to prevent a significant rally. Data showed the number of Americans filing new claims for jobless benefits dropped to a four-month low last week. Better-than-expected economic numbers lifted 10-year Treasury yields above 1.5%, while the dollar index moved away from a one-week low. Bond yields have been rising in recent weeks on worries about problematic inflation surfacing as the major economies of the world have turned on their money spigots wide open over the past year. While gold is considered a hedge against inflation from widespread stimulus, higher bond yields this year have threatened that status as they translate into a higher opportunity cost of holding bullion. The European Central Bank said it would use its 1.85 trillion Pandemic Emergency Purchase Program more generously over coming months to stop any unwarranted rise in debt financing costs. A $1.9 trillion U.S COVID-19 relief bill was also approved on Wednesday. Silver fell 0.2% to $26.12 per ounce. Palladium eased 0.2% to $1,200.11 per ounce, while platinum gained 1.6% to $2,343.95. Copper headlines have been everywhere lately, with the economic recovery and a move toward green technology boosting prices to 9.5-year highs.

U.S Stock Market-CRUDE OIL

Oil prices rose more than 2% yesterday on a weaker dollar and expectations that a crude glut would be short-lived due to a steep fall in U.S fuel stocks and a resumption of operations by Texas refiners. U.S West Texas Intermediate crude for April ended the session $1.58 or 2.5% higher, at $66.02. U.S Treasury yields fell yesterday as concern about a strong pick-up in inflation eased and focus turned to an auction of 30-year government debt. The dollar fell for a third straight day and was at its lowest level in a week against a basket of currencies. Fewer than expected Americans filed new claims for unemployment benefits last week as an improving public health environment allows more segments of the economy to reopen. A massive draw on U.S. gasoline stocks has also helped to boost oil prices. Crude inventories, however, rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations in a Reuter’s poll for an 816,000-barrel rise.

U.S Stock Market-NASDAQ 100

The NASDAQ index gained 2.52%. The top performers on the NASDAQ Composite were Entera Bio Ltd which rose 152.50% to 4.040, Nova Lifestyle I which was up 87.08% to settle at 4.490 and ENGlobal Corporation which gained 43.81% to close at 6.5000. The worst performers were Enveric Biosciences Inc. which was down 23.35% to 3.480 in late trade, AVEO Pharmaceuticals Inc. which lost 22.32% to settle at 11.8700 and Celsius Holdings Inc. which was down 21.77% to 47.37 at the close.

U.S Stock Market-Dow Jones Industrial Average

The Dow Jones Industrial Average rose 0.58% to hit a new all-time high. The best performers of the session on the Dow Jones Industrial Average were Boeing Co, which rose 2.71% or 6.66 points to trade at 252.00 at the close. Meanwhile, Nike Inc. added 2.62% or 3.60 points to end at 141.19 and Microsoft Corporation was up 2.03% or 4.71 points to 237.13 in late trade. The worst performers of the session were Verizon Communications Inc., which fell 2.75% or 1.57 points to trade at 55.51 at the close. Coca-Cola Co declined 1.09% or 0.56 points to end at 50.88 and McDonald’s Corporation was down 0.82% or 1.74 points to 211.57.