US open: Tech rebounds treasury auctions in focus
Fiona Cincotta March 9, 2021 1:58 PM
US stoks are set for a higher open with tech stocks set to out perform after entering correction territory. US bond yields have eased for now but treasury auctions over the coming days could dictate where yields go from here.
Dow futures +0.1% at 31892
S&P futures +1% at 3859
Nasdaq futures +2.3% at 12608
FTSE +0.35% at 6741
Dax +0.5% at 14450
Euro Stoxx +0.6% at 3784
The Nasdaq futures are pointing to a solid rebound after tanking 2.4% in the previous session and falling into correction territory - closing more than 10% below its closing high on 12th February.
The recent rise in US 10 year bond yields have spoked investors out of high growth tech stocks which are particularly sensitive to interest rate expectations.
However, 10 year treasury yields are easing today to 1.53%, down from 1.62% a fresh post pandemic high struck on Monday.
US treasury auctions
Where bond yields head next depends to a degree on the coming days’ bond auctions and tomorrow’s inflation data due just as the Biden administration’s
The bond auctions kick off with the 3 year today at 18:00. This will be followed by$38 billion of the 10 year treasuries on Wednesday and $24 billion of the 30 year treasuries on Thursday.
Any hint of weak demand or a stronger than forecast CPI reading could see bond yields resume their ascent.
Stocks set to open higher
The easing of treasury yields, soothing words from central banks and intervention from Chinese authorities in China’s stock markets are underpinning equity demand.
The OECD has also upped the global growth forecast to 5.6% from 4.2% thanks to the US stimulus package.
Stocks in focus:
Zoom – trades +3.8% pre-market as tech rebounds and after regulatory filings revealed that founder Eris Yuan transferred 40% of his stake to unspecified beneficiaries last week.
GameStop - +9.8% pre-market and no stranger to big swings in the share price, after announcing that Chewy co founder Ryan Cohen a major GameStop shareholder will lead plans to turn around online sales.
FX – Euro recovers
US Dollar Index moving lower as US bond yields slip back. US Dollar index trades -0.25% at 92.00.
The Eurozone economy performed mildly better than expected in the final quarter of the year. The 3rd revision of Q4 GDP ticked higher to -4.9%, from 5% whilst the employment component was also upwardly revised.
Plans to drastically ramp up the vaccine programme in Germany have also offered support to the common currency. The Eurozone as whole is well behind the likes of the US & UK in terms of vaccinations.
GBP/USD trades +0.4% at 1.3882
EUR/USD trades +0.4% at 1.1891
Oil steady, base metals drop
Weakness in China overnight hit commodity prices. Base metals declined steeply, however oil showed some resilience climbing 1.3% higher in the European session. Those gains have since been pared. However, economies reopening, vaccine rollouts accelerating, and the US stimulus package set for approval means that the oil demand outlook remains supportive.
The weekly API inventory data will be released as usual at 21:30 UTC. Lat week saw the largest US crude build on record owing to the Texas freeze.
Base metals have not fared so well with Copper hanging onto losses down -2.5% and iron still some 1.1% lower.
US crude trades -0.1% at $64.97
Brent trades +0.05% at $68.32
18:00 US 3 year bond auction
21:30 API Weekly crude oil stock
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.