Daily Market Commentary 12th March 2021

The ECB left the PEPP Bond Buying program in place, but vowed to attack the recent uptick in interest rates, with renewed bond buying within the existing program. The ECB recognized the global uptick in Bond yields and promised to combat this rise, within the existing program, by ramping up purchases. This was enough to settle bond yields and trigger another rally in global equities. The positive growth narrative allowed market confidence to surge and the US Dollar to retreat, with the EUR heading back towards 1.2000, while the GBP looks to regain 1.4000.

The good news from Europe spread quickly to US markets, which also welcomed falling weekly jobless claims, further boosting US equities to record highs. The US Dollar continued to ease, with the AUD rising to 0.7780, while the NZD broke back above 0.7200.  The commodity currencies are beneficiaries of the improving global growth prospects and continue to rebound strongly. Chinese vehicle sales surged 365%, celebrated in the two week long Chinese Peoples Congress, which dominate the Chinese political landscape.

US Bond Yields have settled and the canary in the mineshaft appears to be resting, but there is more to come from yields, growth and debt.