oanda_logo
  • Sign in
  • Open an account

Sign in

Select account:

  • Currency converter
    • Converter
    • Tools
    • Mobile
    • Live rates
    • Historical rates
    • Embed converter
    • Help
  • FX Data Services
    • FX Data Services overview
    • Exchange Rates API
    • Corporate FX transfers
    • Historical currency converter
    • Contact us
    • Blog
  • OANDA Group
    • About OANDA
    • Media centre
    • Careers
Logotype
The Beat of the Global Markets
  • Home
  • News Events
    • Brexit
    • COVID-19
    • Earnings season
    • Non-farm payrolls
    • Trade war
  • Markets
    • FX
    • Indices
    • Commodities
    • Crypto
  • Multimedia
    • Podcasts
    • Videos
  • Economic calendar
  • Analysts
Home/COVID-19/Newsfeed/Non-farm payrolls/Oil/Technical analysis/Treasuries

Risky business

March 8, 2021 Share Print 0

No one can complain about a lack of volatility in financial markets at the moment. The tug-of-war between economic recovery and inflation risks continued on Wall Street on Friday and spilt out onto the street in Asia.

Friday’s outsized 379,000 gain in Non-Farm Payrolls caused US yields to spike initially. Still, equity markets just couldn’t keep saying no to the recovery story, and unwound all their ugly intra-day losses to post strong finishes. US 10-year yields peeped their head over 1.60%, before helpfully retreating to 1.55%, aiding the equity recovery story.

The weekend had plenty of interest as well. China’s Balance of Trade exploded higher in dollar terms to USD103.25 billion for JAN-FEB yesterday. For all the noise about its comparison to JAN-FEB 2020 (USD78.17 billion), it flatters to deceive. The same period last year being the start of the Covid-19 economic implosion. Still, given that the number encompasses Lunar New Year, the data is impressive.

By contrast, Japan’s Current Account this morning disappointed, rising only yen 645.8 billion, roughly half the number expected. Increasing gas and oil prices appear to be playing their part, along with flat domestic demand and Japan’s Covid-19-lite state of emergency.

US Senate approves stimulus bill

The US Senate passed the Biden USD1.9 trillion stimulus package over the weekend, which has continued the market sugar rush this morning after equities closed positively on Friday. Apart from ditching the minimum wage and tweaking whom is entitled to the fiscal goodies, the bill is relatively intact. It will now pass back to the House tomorrow in its amended form, and then onto President Biden’s desk for signing.

An attempted drone attack on a giant Saudi Arabia oil refinery and transport hub in the Kingdom this morning by the Yemeni Houthis has seen oil prices spike higher once again. No damage was caused, but Brent crude and WTI are 2.50% higher. Brent crude is now well above the $70.00 a barrel mark at $71.30 a barrel.

Notably, US 10-year yields have now climbed five basis points higher this morning, back to the 1.60% mark. The explosion higher by equities this morning on the US stimulus news was also a sign of pent-up demand, much like New York on Friday, after a series of torrid sessions. A tough mental state for a market programmed to FOMO-buy each day.

Despite the warm afterglow seen in equities this morning, the charts for the S&P 500 show the index has only retraced to its downside breakout level. The story is similar for the Shanghai Composite, CSI 300 and Nikkei 225. The Nasdaq broke out of its Mar 2020 uptrend two weeks ago and remains there. Only the Dow Jones remains safe for now, having bounced off its March 2020 support line on Friday.

Higher oil prices, robust US employment data and a USD1.9 trillion US stimulus, sound more than a little inflationary to me. US bonds seem to agree. Assuming that equity markets are out of the woods is a risky business.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

  • Bio
  • Twitter
  • Latest Posts
Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley

@@JeffatOANDA

Follow @@JeffatOANDA
Jeffrey Halley

Latest posts by Jeffrey Halley (see all)

  • Oil rises on OPEC, gold surges - 04/14/2021
  • US Treasuries send the dollar lower - 04/14/2021
  • Equity markets start on a mixed note - 04/14/2021
apan Current Account, Brent Crude Oil, China Balance of Trade, COVID-19, CSI 300, Dow Jones, NASDAQ, Nikkei 225, s&p 500, Shanghai Composite, US 10-year Treasury yield, US Nonfarm Employment Change, US stimulus bill, WTI
Back to Top
Subscribe
Subscribe form
Week ahead
Week Ahead: Bank of Canada to reduce purchases; Global Econo...
Posted by Ed Moya Apr 16, 2021
FX
Japanese yen jumps as dollar retreats
Posted by Kenny Fisher Posted 11 hours ago
Pound surges, UK job data looms
Posted by Kenny Fisher Apr 19, 2021
AUD hits 1-month high, RBA minutes ahead
Posted by Kenny Fisher Apr 19, 2021
Indices
Europe hits record highs, US dollar hits monthly lows
Posted by Sophie Griffiths Apr 19, 2021
US Close: Fresh record highs for US stocks, Strong US data, ...
Posted by Ed Moya Apr 16, 2021
China React: Record GDP at 18.3%, Retail Sales impresses, IP...
Posted by Ed Moya Apr 15, 2021
Commodities
Oil choppiness, gold pares gains
Posted by Ed Moya Posted 10 hours ago
Oil rally takes breather, gold climbing
Posted by Sophie Griffiths Apr 19, 2021
Commodities and Cryptos: Oil’s strong week, Gold shine...
Posted by Ed Moya Apr 16, 2021
Crypto
Market Insights Podcast (Episode 187)
Posted by Ed Moya Apr 16, 2021
Week Ahead: Fed’s inflation calm is about to get teste...
Posted by Ed Moya Apr 9, 2021
Market Insights Podcast (Episode 185)
Posted by Ed Moya Apr 9, 2021
Follow us
  • RSS
  • Facebook
  • Twitter
  • Youtube

Logotype

MarketPulse provides up-to-the-minute analysis on forex, commodities and indices from around the world.

  • OANDA Group
  • FX Data Services
  • Currency conversion
  • News events
  • Markets
  • Economic calendar
  • About MarketPulse
  • Terms of use
  • Site map
MarketPulse is an award-winning news site that delivers round-the-clock commentary on a wide range of asset classes, as well as in-depth insights into the major economic trends and events that impact the markets. The content produced on this site is for general information purposes only and should not be construed to be advice, invitation, inducement, offer, recommendation or solicitation for investment or disinvestment in any financial instrument. Opinions expressed herein are those of the authors and not necessarily those of OANDA or any of its affiliates, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, please access the RSS feed or contact us at info@marketpulse.com © 2020 OANDA Business Information & Services Inc.