The economic calendar on Wednesday, March 10, contains quite a few important reports. First off, Australia published its preliminary consumer confidence report for March, which was set higher than the previous release, at 111.8 points.
The second significant publication was a series of inflation rate reports from China, which were all better than the forecasts, calming investors after some other fundamentals from China disappointed them recently. The new yuan loans in China also exceeded investors’ expectations by over 400 billion. This data from China was enough to boost Chinese stock indices for the day.
Meanwhile, due to some warnings about industrial pollution in China, a production cut is expected. Iron futures dropped in price, but copper remains stable for now.
Arguably the most fascinating report today will come a bit later when the United States publishes its inflation rate for February. The forecast is for an increase to 1.7% YoY. Any possible disappointment or overperformance will have huge implications for the markets, as inflation is the most decisive factor when it comes to the Federal Reserve and its monetary policy during the remainder of 2021.
Soon after the inflation data is published, the Treasury office in the United States will open a sale of $38 billion worth of 10-year bonds.
Later still, the Bank of Canada will hold a policy meeting to decide whether an interest rate adjustment is in order. No changes are expected.
As for the United States stock market, today all major stock indices are set to make a modest recovery on the back of yesterday’s rally. However, thanks to risk appetite, investors remain not particularly interested in tech stocks, which form the majority of US stock indices. Thus, we expect the recovery today will be modest and short-lived.
The heavily-shorted GameStop stock continues to rise due to signs that the company is adapting to the e-commerce trend among retail businesses. Tesla, which saw its stock drop dramatically in February, is also making a recovery at the moment.
As for crude oil, it is trending downward again due to higher-than-anticipated stockpiles in the United States and OPEC-member Iraq producing oil above the allocated quotas. The Brent crude dropped to $67.20, while the WTI is trading around $64.02 today. The US will publish more inventory data later in the day.
