Financial Markets Daily Report
19 March 2021

European equities performed  well on Thursday after the Federal Reserve raised its growth forecast for the US, and the Eurostoxx50 rose 0.5%. Banks and automakers led the gains, as they are favored by rising market interest rates.

FMDR
  • European equities performed  well on Thursday after the Federal Reserve raised its growth forecast for the US, and the Eurostoxx50 rose 0.5%. Banks and automakers led the gains, as they are favored by rising market interest rates.
  • The S&P 500 dropped 1.5% after closing at a record high on Wednesday. The tech-heavy Nasdaq index fell 3%.
  • The U.S. Treasury sell-off resumed as 10-year yields reached 1.75% for the first time in 14 months before settling at 1.71%, up 7bp compared to yesterday. Yields in Germany also rose, but to a lesser extent, as 10-year yields were up 3bp on Thursday, resulting in a reduction in Euro area periphery spreads.
  • The increase in U.S. interest rates has favoured the dollar, which rose sharply, causing a 0.5% drop in the EUR/USD.
  • Oil prices tumbled on Thursday over concerns around flagging global demand, and the barrel of Brent fell 6.9% to $63.3.
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