The US Senate passed an enormous $1.9 Trillion stimulus/bailout bill over the weekend, completely overwhelming the market narrative. This huge injection of fiscal stimulus is seen by markets as a positive short-term and equities surged to new record highs, completely ignoring the interest rate fears of the previous couple of weeks. US 10 year Bond Yields did surge back to above 1.60%, but this was largely ignored by markets and fears subsided. The US Dollar continued to find support, with the Yen trading 108.80, while the EUR slipped to 1.1850, dragged lower by a contraction in German Industrial Production.
The rise in the reserve pushed the commodity currencies lower, with the AUD trading 0.7670, while the NZD heads towards 0.7100. Japanese GDP growth data, out today, will give Asian markets some insight into the recovery, in todays trade. The market has been hijacked by the US Stimulus, but attention will soon turn to interest rates, commodity prices and currencies. EU growth data will also be released tonight, which will drive European markets and reveal the damage of the latest rounds of lock-downs.