Daily Market Commentary 2nd March 2021

Global equities came roaring back, to begin the new trading week, wiping out much of last weeks losses. The US House passed the US$1.9 Trillion stimulus/bailout package, which enthused markets, while the retracement in Bond Yields held, offering some hope for fearmongers. Market worries over a spike in bond yields had triggered the losses in equities in the previous week, but a sharp fall in yields last Friday, was sustained in Mondays trade. US 10 year yields, traded 1.448, higher than Fridays lows, but substantially off the 1.6+% highs. The relief rally was strong and effective. The Dollar held some ground, with the EUR trading 1.2050, while the GBP slipped to 1.3930.

Manufacturing PMI data was strong across Europe and the US, although it is the Services sectors that will be heavily impacted by the continued lockdowns. US Construction jumped 1.7%, while the ISM manufacturing and employment showed strong signs. The economic recovery has positive repercussions, although the rising inflation and interest rates, have been highlighted as detrimental.

Commodity currencies stabilised, with the AUD bouncing to 0.7770, while the NZD bounced to 0.7250 despite the reintroduction of severe lockdown restrictions. The lockdown economic and social damage in truly unfathomable globally, until this pandemic has passed and the power mad Governments that institute them will be judged accordingly.