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Summary
- Ten-year US treasuries have increased by five basis points to 1.252 per cent, highest since last March 2020.
- Crude oil has risen to a new 13-month high as a severe snowstorm in the US has increased the power demand.
- Investors are keenly waiting for the minutes from the Federal Reserve meeting, due to be out on Wednesday.
On Tuesday, Global markets held the ground firmly and continued their bull run for the 12th straight session on the back of high optimism for the global economic recovery. The low-interest rates are also forcing investors to channelise their money from fixed income assets to riskier assets.
However, if the bond yields start to rise, that could make the equity markets a bit jittery. The optimistic view on the markets has lifted the US bond yields, with ten-year US treasuries increasing by five basis points to 1.252 per cent, highest since last March 2020.
Investors are keenly watching for the minutes from the Federal Reserve meeting, due to be out on Wednesday to strengthen the commitments to maintain a dovish stance in the near future. The bond markets would also be getting cautious before the minutes are out.
The US markets were closed yesterday on account of President’s day, and Chinese markets are closed today and tomorrow due to Lunar New Year. Looking at the US futures market, Dow Jones futures is trading 0.16 per cent up at a new all-time high of 31,717 (as at 4:25 PM AEDT).
Read More: ASX 200 today: Australian shares tick marginally higher; who are the top gainers?
Crude Oil
Crude oil has risen to a new 13-month high as a severe snowstorm in the US has notched up the power demand. The WTI crude oil has finally surpassed US$60 mark and is trading 0.24 per cent up at US60.26 a barrel.
A tightening in the supply also supports the rising oil price, primarily due to the production cuts by OPEC+ member countries.
Currency
The jump in the oil price is also supporting the commodity-linked currencies such as the Canadian dollar which has risen by 0.62 per cent to 0.7922 this week so far. Simultaneously safe heaven currency such as the US dollar has taken a back seat (down by 0.21 per cent this week).
