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15.03.202113:48 Forex Analysis & Reviews: Major global indices rise amid growing optimism

Although the American session is ahead, we can still conclude that stocks have recovered from Friday's drop in the US market, including the highly volatile Nasdaq Composite Index.

Exchange Rates 15.03.2021 analysis

Experts believe that the reason is positive market sentiment, which prevails over concerns about a jump in benchmark US Treasury yields. This spring mood can be attributed to some progress in the vaccination campaign, although there is still a long way to sustainable positive results.

"The U.S. is now vaccinating more than three million people a day, with President Biden now saying all adults will be able to get a shot by May 1. It could soon achieve a herd immunity and an economic normalisation," Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said.

Thus, US S&P500 futures rose by 0.2% in the early Asian session, almost hitting a record high level touched last week. It is currently trading at the level, exceeding Friday's close by 0.10%.

The Japanese Nikkei and other Tokyo indices are currently the best performers in the market.

At the same time, Chinese stocks opened the session with gains but then started to decline despite positive economic data for February. Investors fear that against the backdrop of economic growth, the government will reduce subsidies that were previously paid amid the coronavirus pandemic.

Exchange Rates 15.03.2021 analysis

Chetan Ahya, global head of economics at Morgan Stanley in New York, noted that analysts had not expected such a rapid economic recovery. "Fiscal policy is doing much more than fill the output hole. Transfers to households have already exceeded the income lost in the recession. As reopening gathers pace, the labour market is poised for a sharp rebound."

Last week, the US House of Representatives gave final approval to the massive relief package. Analysts suggest that part of $1,400 direct payments to households could find its way to stock markets, including high-tech companies.

There are also concerns about inflation due to an increase in money supply. Last Friday, the 10-year US Treasuries yield advanced to a high last seen in February 2020.

This week's macroeconomic calendar includes the long-awaited Fed meeting, which is expected to clarify an issue about the so-called "supplementary leverage ratio" which is important for investors. So far, the market has taken a wait-and-see approach in anticipation of the government's position on the leverage ratio and other important issues. Traders are hoping to receive some clues about the US monetary policy for the next quarter.

As a result, the US dollar gained in value across the board, following Friday's decline amid higher US bond yields.

The euro slipped to $1.1947 from last week's high of $1.1990 after the European Central Bank announced an increase in money supply without a significant change in its monetary policy strategy. Furthermore, the reports of vaccination in the EU countries leaves much to be desired.

The dollar/yen pair held firm at 109.12, near a nine-month high of 109.235 set last Tuesday (109.235). That is why the yen was not the best asset for long positions.

The British pound fell by 0.25%. Bitcoin declined amid news from India.

Crude futures traded at $66.23 per barrel due to production cuts and positive market sentiment.

Egor Danilov,
Analytical expert of InstaSpot
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