End of the line for the Treasury yields rally? – Market Overview

End of the line for the Treasury yields rally? – Market Overview

Markets cheered the new developments for both European and North American Treasury yields.

The progress in the approval of the fiscal stimulus package in the United States has resulted in the stock markets starting the week positively after the negative behavior of last week.

Influencing this improved investor sentiment is the retreat in the bullish rally for Treasury yields in U.S. and Europe. As a reference, the U.S. 10-year bond has stabilized around 1.43% after reaching 1.60% last week.

Fed's encouraging comments regarding inflation have put a halt to the outflow of bonds. However, the price surges of a large part of commodities and the imminent entry of more funds from stimulus packages are factors that could continue to influence investors' inflation expectations and, therefore, a potential increase in interest rates.

Both European stocks and North American futures rose more than 1% at the beginning of the trading day, with the Tech100 index as the primary beneficiary of this recovery (1.5% increase). Technically, this index has rebounded from the support zone located at 12691, a level close to the 100-day SMA line currently at 12580. Below these previous levels, the uptrend of the last impulse that began in September 2020 would end.

The Forex market

In the foreign exchange market, the U.S. dollar is behaving unevenly, falling against commodity-related currencies, such as the Australian dollar and the Canadian dollar, driven by the rise in the price of raw materials and rising against the yen and the euro. The euro, however, is experiencing widespread declines against all its peers.

Still, the economic figures for the eurozone remain positive. Today the manufacturing PMI for February was published with a rise of 57.9, higher than expected and exceeding the 54.8 of the previous month. But ECB’s statements regarding a potential increase of asset purchases should long-term interest rates suffer upward tensions have had a negative effect on the euro since this measure would mean an intensification of its monetary policy ultra expansive.

Technically, EUR/USD has managed to trade below the 1.2065 zone, and now the critical level is around 1.2022, the level where the 100-day SMA line passes. Below this zone the next technical target is at the 1.1950 level.

Sources: Bloomberg, Reuters.

Maklumat/penyelidikan ini disediakan oleh Miguel Ruiz (“tpenganalisis penyelidikan”) dan tidak mengambil kira objektif pelaburan tertentu, keadaan kewangan atau keperluan khusus individu. Penganalisis penyelidikan bertanggungjawab terhadap kandungan laporan penyelidikan ini, samada sebahagian atau keseluruhannya, memperakui bahawa pandangan mengenai syarikat dan sekuriti mereka yang dinyatakan dalam laporan ini jelas mencerminkan pandangan peribadi dan pedagang bertanggungjawab sepenuhnya ke atas risiko mereka sendiri.

Penyelidikan yang disediakan bukanlah pandangan JME Financial Services (Pty) Ltd ataupun undangan untuk melabur dengan JME Financial Services (Pty) Ltd. Penganalisis penyelidikan juga memperakui bahawa tiada sebahagian daripada pampasannya, adalah, atau akan, secara langsung atau tidak langsung, berkaitan dengan cadangan atau pandangan tertentu yang dinyatakan dalam laporan ini.

Sehingga tarikh laporan diterbitkan, penganalisis penyelidikan dan pasangannya dan/atau saudara-mara yang bergantung kepada penganalisis penyelidikan, tidak memegang kepentingan dalam sekuriti yang dicadangkan dalam laporan ini (“kepentingan” termasuk pemilikan langsung atau tidak langsung terhadap sekuriti).

Penganalisis penyelidikan tersebut bukanlah di bawah JME Financial Services (Pty) Ltd. Anda digalakkan mendapatkan nasihat daripada penasihat kewangan bebas mengenai kesesuaian pelaburan, di bawah penglibatan berasingan, seperti yang anda anggap sesuai dengan objektif pelaburan tertentu anda, keadaan kewangan atau keperluan kewangan tertentu sebelum membuat komitmen untuk melabur.

Undang-undang Republik Afrika Selatan akan mengawal sebarang tuntutan yang berkaitan dengan atau yang timbul daripada kandungan maklumat/ penyelidikan yang disediakan.

JME Financial Services (Pty) Ltd, beroperasi sebagai ZA.CAPEX.COM, bertindak sebagai perantara antara pelabur dan Magnasale Trading Ltd, rakan kontrak untuk perbezaan yang dibeli oleh pelabur melalui ZA.CAPEX.COM, yang diberi kuasa dan dikawal selia oleh Cyprus Securities. dan Suruhanjaya Pertukaran dengan nombor lesen 264/15. Magnasale Trading Ltd adalah prinsip utama CFD yang dibeli oleh pelabur.