Treasury yields and the stock market rose following oil prices

by JustForex

A sudden change in the weather in Texas was a surprise for traders. An arctic cyclone sweeping some areas of the US threatens to restrict supplies from one of the world’s leading oil producers. West Texas Intermediate crude oil futures increased by 2.5% and surpassed $60 a barrel for the first time since January last year. Meanwhile, Brent crude oil price rose to $64 in London. Traders estimate that production of several hundred thousand barrels per day in Texas could be affected by wells shutdown, disfunction of road transport, and electrical power outage to extreme weather conditions.

As a result of the jump in oil prices, US 10-year Treasuries yield rose to 1.21%. The stock market was next to react. The S&P 500 set a new all-time high at the level of 3947. The Stoxx 600 rose primarily on gains in banking and commodities stocks. The Nikkei 225 reached 30,000 for the first time since 1990. The latest statistics showed that Japan’s economic growth exceeded expectations.

An additional growth driver for risky assets is a decrease in the level of daily coronavirus infections. The rate of distribution in the US continues to slow down. The weekly national average fell to its lowest level in nearly four months. All of these factors bolster hopes for an early recovery from the pandemic.

Against this background, the dollar index continues to decline. The greenback, as a defensive asset, continues to be under pressure from rising stock prices, the commodity market, and negative statistics. The latest US consumer sentiment data has hit the dollar. Consumer sentiment in the US dropped unexpectedly to a six-month low at the beginning of February because of the decline in income and the development of inflation. The University of Michigan Sentiment Index fell to 76.2 from 79 in January. Consumers expect inflation to rise 3.3%, the highest since July 2014.

Main market quotes:

S&P 500 (F) 3,946.62 +15.62 (+0.40%)

Dow Jones 31,458.40 +27.70 (+0.09%)

DAX 14,103.15 +53.26 (+0.38%)

FTSE 100 6,664.16 +74.37 (+1.13%)

USD Index 90.323 -0.147 (-0.16%)

• – Japan GDP (q/q) (q4) at 01:50 (GMT+2).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.