Overnight on Wall Street: Thursday 11 March 2021

Equity markets

US Equity markets posted another solid up day with the Dow and small cap Russell 2000 leading the way with only Tech stocks lagging after yesterday’s surge. The Dow had it’s 4^th straight positive session again hitting all-time highs.

• Dow Jones up 464 (1.46%)
• NASDAQ down 5 (0.04%)
• S&P 500 up 23 (0.6%)
• Russell 2000 up 40 (1.81%)

Source: Yahoo Finance

The passing of the $1.9T Stimulus bill in the US overnight is seen as a positive for value stocks that have taken the brunt of the COVID downturn. Small caps in the Russell 2000 and blue chips in the DOW outperformed as investors rotated out of Tech growth stocks listed on the S&P and NASDAQ with optimism in a stimulus led to the economic recovery in the US.

FX markets

US Dollar

The US Dollar Index had another sharp drop overnight. A keenly watched 10-year bond auction went without incident, allaying investor fears of increasing interest rates and sending bond yields and the US dollar lower.

Source: zerohedge.com

SOURCE: GO MT4

AUDUSD

With US bond yields stabilising causing a drop in the USD, AUDUSD broke above 0.77c sticking in the 0.76 – 0.78 range it has traded in most of this year. With iron ore prices plateauing and comments from the RBA yesterday that they would like to see the AUD lower the 0.78c resistance will be an important test of any sustained rise in AUDUSD.

Source: GO MT4

Commodities

Oil

Despite a large build in Oil inventories reported overnight US crude managed to make gains on US Dollar weakness and the hope the passing of the stimulus bill will spur economic activity.

Also supporting oil prices is OPEC+’s decision to leave production cuts as they are for another month.

Source: GO MT4