Global stocks rally accelerates as bond yields cool
Global stocks rallied today as investors shifted their focus on the cooling bond yields. In the United States, the ten-year yield declined to 1.60% while in the UK, the Gilts declined to 0.78%. Similarly, in Spain and Italy, the ten-year government bond yields declined to 0.286% and 0.6%, respectively. As a result, in the UK, the FTSE 100 index rose by 0.65% while in Germany, the DAX index soared by 0.65%. Investors are positive regarding the ongoing vaccine roll-out.
The US dollar gained against other currencies as traders reacted to the latest US retail sales numbers. According to the statistics bureau, the overall retail sales declined by 3.5% in January as the effects of the previous $900 billion stimulus package started to ease. The sales rose by 6.25% on an annualised basis. On the other hand, core retail sales fell by 2.7% after rising by 5.9% in the previous month. Meanwhile, the import and export price index rose by 1.3% and 1.6%, respectively. The industrial and manufacturing production numbers fell by 2.2% and 3.1%, respectively. These numbers came as the Federal Reserve started its monthly meeting.
The euro was little changed against the US dollar after mixed economic numbers from Europe. In France, the headline consumer price index (CPI) declined from 0.2% in January to 0.0% in February. This decline was better than the median estimate of a -0.1% decline. On an annual basis, the CPI remained unchanged at 0.6%. In Italy, the headline CPI increased from 0.4% to 0.6% while the harmonised inflation index rose from 0.7% to 1.0%.
The GBP/USD pair declined to an intraday low of 1.3815, which is below last Friday’s high of 1.400. On the four-hour chart, the price managed to decline below the previous lowest point at 1.3860. The signal and histogram of the MACD have moved below the neutral line while the price is slightly below the 25-day and 15-day exponential moving averages. The Commodity Channel Index (CCI) has also moved slightly below the oversold level. Therefore, the pair may continue falling as bears target the next key support at 1.3778.
The EUR/USD pair is trading at 1.1930, which is slightly below the important support at 1.1950. On the four-hour chart, this price is between the lower and middle lines of the Bollinger Bands. It also seems to be forming a head and shoulders pattern, which is usually a bearish pattern. The Average True Range (ATR) has declined while the RSI is at the neutral level of 40. Therefore, the pair may break-out lower as bears target the next key support at 1.1835.
The BTC/USD pair rebounded after falling to a low of 53,322 in the American session. On the four-hour chart, the pair is slightly below the middle line of the Bollinger Bands. It is also slightly above the lower line of the ascending channel while the Relative Strength Index (RSI) has declined slightly. Therefore, the pair may continue rebounding as bulls target the all-time high of near 62,000.