Markets continue to whip around as the Biden administration nuts out the next round of government fiscal stimulus. Markets are eager to see how they will fund the bill with many expecting a rise in taxes.
Bond Yields are rising again but have not pushed any higher with the US 10-year no being able to clear the 1.73 level yet. The Aussie 10-year is also moving sideways and holding below 1.87.
Our market continues to lag US markets, with the DOW JONES reaching another all-time high as we continue to go sideways. We will likely need to see the S&P 500 index reach its all-time highs to push out of our current channel, however. The mood locally has become a little soft as we approach the ending of our government Covid aid with the Keepers allowance and Seeker subsidies ending this week.
Rumors of Iron ore’s demise appear to be greatly exaggerated, with the price on China’s spot markets jumping back to around USD 168/tonne. However, this wasn’t enough to force BHP and RIO higher in the northern hemisphere, with our large miners closing lower in both London and New York.
The XJO is expected to get open higher this morning near 6,780, recovering most of the sell off yesterday. U.S markets were flat once more overnight, but their futures sit in the red this morning. If they remain so, it will likely flatten our gains during our sessions today. On the other hand, our market is certainly due for a bit of a short-term catch up as we have yet to price in the gains the U.S saw a couple of days ago, instead choosing to sell off.
This could be due to lighter volumes going into Easter. It could also be due to lockdowns in Brisbane. Perhaps it is due to the Morrison government ending pandemic relief stimulus soon. Or perhaps it is a combination of all the above. Regardless, the trend remains bullish, and it is more likely we break this consolidation to the upside.
US shares traded slightly lower overnight, with shares opening lower and rising throughout the session. The key news was rising bond yields, with the US 10-year treasury reaching a 14-month high overnight. Investors are waiting for President Biden’s infrastructure stimulus bill announcement, which is scheduled for tonight.
In economic data, US consumer confidence for March came in much stronger than expected and showing an improvement on February’s sentiment. We also saw an oil inventory read that showed a bigger than expected build-up in US oil inventories. Some are now suggesting that the US will face another wave of deaths before the vaccines start reducing virus numbers significantly. Most major sectors closed lower to some degree, expect for Financials and Telecoms, who were slightly higher.