Market Commentary – March 11, 2021

Kevin Jock

11th March 2021

    Wall Street’s S&P500 and Dow Jones rose after President Biden’s $1.9tn coronavirus relief package passed its final hurdle in the US House of Representatives. All but one Democrat voted in favour, whilst all Republican’s voted against ending the final tally at 220 to 211. Weaker than expected core CPI data also eased concerns of a potential overshoot in inflation. Though, the U.S. yield curve steepened to a trajectory unseen since 2015 as American household expenditure is expected to receive a boost from a $1,400 direct payment, a $300 top-up in unemployment benefits, $350bn in local and state aid as well as tax credits for children.

Ahead of the ECB’s press conference today, European benchmarks posted consecutive days of gains with the STOXX and DAX reaching back to pre-pandemic levels. Across the channel, the FTSE100 remains mute following Tuesday’s annual budget release whilst the EU – UK vaccine spat intensifies.

Mixed start across Asia as Australia’s S&P200 tumbles despite the government announcing subsidies to air travel to boost tourism. The Nikkei edged higher and the Hang Seng outperformed after the U.S. Secretary of State and China’s foreign minister confirmed both sides will meet in Alaska next week to begin talks surrounding sanctions, tariffs, and miscellaneous diplomatic matters.

U.S. dollar demand dimmed following disappointing inflation data. Both crude and gold rose slightly whilst bitcoin once again soared above 57,000, just another thousand dollars shy from breaking all-times.


Figure 1 (Source: IS Prime) Bitcoin Daily : Here we go again. Following a 20% correction in recent weeks, bitcoin rallies towards all-time highs.

Headliner to Review

  • The consumer price index (CPI) in the United States in February this year further increased slightly to 0.4% month-on-month, a six-month high, which was in line with market expectations.
  • The actual average weekly wages of private non-farm employees in the United States unexpectedly dropped from 0.4% to -1% on a monthly basis. After the six-month consecutive rise, the market expected to continue to rise 0.1%.
  • S. crude oil inventories increased for three consecutive weeks for the week ending March 5, 2021, but the weekly increase slowed down from 21.573 million barrels to 13.798 million barrels, and the total increased to approximately 49841 million barrels, which was far exceeding the market expectations of 816,000 barrels increase.
  • Bank of Canada’s continued to maintain its benchmark interest rate at a record low of 0.25%, which was in line with market expectations. At the same time, it continues to purchase 4 billion Canadian dollars of government bonds every week.

Headliner to Watch

  • No change anticipated from the ECB today with no intentions to counter ever worrying expectations of inflation overshooting. Projections released this week has the central bank concluding any pick-up in inflation in the short to medium term will be fleeting.
  • U.S. unemployment claims expected improve slightly from 745k to 730k. Their lowest level since the pandemic began.

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Antony Tan
Ben Li
Kevin Jock