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Wall Street parties but Asia mixed - MarketPulse


Wall Street parties but Asia mixed
March 12, 2021SharePrint
Asian equities mixed following the Wall Street rally
After improving Jobless Claims and a non-event US 30-year auction greenlighted the buy-everything business as usual trade, big-tech was back overnight. Although still in correction territory, the Nasdaq powered 2.52% higher, while the S&P 500 and Dow Jones ended in record territory, rising 1.04% and 0.58%, respectively.
There were concerns ahead of the US 30-year bond auction, but demand was strong enough so that the auction was passed without incident. Although the bid-to-cover ratio wasn’t spectacular, like the 10-year the day before, most of the issue went to direct buyers, not primary dealers, indicating an underlying broader demand. That was the last potential barrier for the week for simmering global recovery demand.

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Inflation genie returned to its bottle - MarketPulse


Inflation genie returned to its bottle
March 12, 2021SharePrint
The buy-everything animal spirits refused to be caged any longer overnight as financial markets returned the inflation genie to its bottle. Technology was back, the S&P 500 and Dow Jones closed at record highs, US yields held steady, bitcoin rose, and the US dollar fell, with markets partying like it was 2020.
ECB to accelerate pace of bond purchases
Earlier in the evening, the European Central Bank remained unchanged and signalled it would accelerate the pace of QE buying to cap yields. The euro gained a pass mark, it seemed, because the ECB did not increase the size of the QE programme; instead, they chose to front-load it.

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The US dollar retreats - MarketPulse


The US dollar retreats
US dollar dips as inflation concerns ease
The US dollar headed south overnight, unable to hold onto recent gains as inflation fears temporarily subsided as the 30-year bond auction passed without incident, and a fall in US jobless claims turned attention back to recovery. The dollar index fell 0.44% to 91.45, although dollar short-covering has lifted it back to 91.55 in Asia.
EUR/USD negotiated the ECB meeting with aplomb, rising 0.45% to 1.980 overnight, and is seemingly out of the woods for now. A similar story has played out with GBP/USD and USD/JPY. The under-pressure Australian and New Zealand dollars also rallied overnight; both are testing their respective downside breakouts at 0.7805 and 0.7230 today. A close tonight above these levels by AUD/USD and NZD/USD will conclude their downward corrections for now.

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