Forex news from the European trading session - 9 March 2021
Headlines:
- Treasury yields stay on the retreat ahead of North American trading
- US February NFIB small business optimism index 95.8 vs 97.0 expected
- OECD raises 2021 global GDP growth forecast to 5.6% from 4.2% previously
- Eurozone Q4 final GDP -0.7% vs -0.6% q/q second estimate
- Dollar retreats further on the session on lower yields
- Germany reports 4,252 new coronavirus cases, 255 deaths in latest update today
Markets:
- AUD leads, USD lags on the day
- European equities higher; S&P 500 futures up 1.0%
- US 10-year yields down 6.4 bps to 1.526%
- Gold up 1.4% to $1,706.80
- WTI up 0.6% to $65.47
- Bitcoin up 4.4% to $54,135
It was a relatively quiet session in terms of news but lower Treasury yields has helped to spark a turnaround Tuesday moment going into North American trading later.
The bid in Treasuries ahead of the 3-year auction today is setting the tone in the market, as tech stocks rebounded and everything else gained except for the dollar.
EUR/USD moved up from 1.1850 to 1.1916 after having neared a test of its 200-day moving average in the early stages of the day while USD/JPY retreated from 109.20 to 108.56 before catching a slight bounce to 108.70-80 currently.
Risk currencies also posted a solid bounce with AUD/USD climbing from 0.7650 to test key near-term levels around 0.7704-15 at the moment. USD/CAD also slumped from 1.2660 to just under 1.2600 as oil prices also turned early losses into gains.
The track lower in yields is leading to a broader slump in the dollar as commodities also rebounded, with gold climbing back above $1,700 and silver up 2% to $25.70.
Nasdaq futures are up by 2%, helping to ease some nerves following the rotation out of tech yesterday - which saw the index test its 100-day moving average.
All eyes are still on the bond market and how the developments there will reverberate across the broader market in general. The 3-year Treasury auction today will be a focus point but the 10-year auction tomorrow will be the main event.
