Today the financial markets find themselves in a risk-on wave caused by the testimony of Federal Reserve Chairman Jerome Powell, who over two days this week confirmed before the United States Congress that the central bank will not tighten monetary policy this year.
Powell’s statements underpinned weakness for the US dollar, which retreated against major currencies, most notably the euro. In addition, assets quoted in USD increased in price. Copper is at its highest level in more than nine years at the moment and will likely continue to grow.
Crude oil, another commodity quoted in USD, is also increasing in value, with the WTI trading around $63.42 and the Brent at $66.44 per barrel today.
Meanwhile, as is typical of Thursdays, we have a full economic calendar today. At the start of the day Japan published its coincident and leading economic indices for December, with both outperforming the forecasts.
Then, Germany presented its consumer confidence preliminary data for March, which was slightly better than expected, though still negative. At the same time, confidence in France disappointed investors in the February report. Italy did better in both consumer and business confidence this month. Spain will report later today.
The eurozone-wide reading on consumer confidence was in line with the forecasts, though economic and industrial sentiment was better than expected in February.
The United States will publish a flood of reports later today, including its latest jobless claims data. Also on the radar are durable goods orders for January and a revision of the GDP growth rate report for the last quarter of 2020. In addition, there will be statements by several members of the Federal Reserve.
In terms of the stock market, today we expect a mixed performance from US indices. The tech-heavy Nasdaq and S&P 500 are likely to be on the losing end, while the Dow Jones will mostly stay flat or gain very modestly today. Investors are more interested in other assets at the moment, such as US Treasury bonds, whose yield has continued to grow.
There are also some signs of buying heavily shorted stock again, with usual suspects GameStop and AMC currently gaining in share value.
Today we also expect several earnings reports from major companies, including AirBnB, DoorDash, and HP, among others.
