Optimism Returns on Thursday
24 March 2022
Investors bought stocks and sold bonds as the risk appetite has returned after yesterday's correction.
Earlier today, preliminary EU PMIs for March came out better than expected but failed to support the single currency. The German manufacturing PMI slid from 58.4 to 57.6, while the services sector slowed to 55.0 from 55.8 in February.
The Eurozone's services PMI came out at 54.8, down from 55.5 previously, while the manufacturing survey declined from 58.2 to 57.0. The EU countries will likely be hit severely by the Russian sanctions over the following months, bringing double-digit inflation and faltering economic growth.
During the US session, the usual Thursday's jobless claims are due, along with US current account deficit, which is expected to widen again. Additionally, the US durable goods orders are on the agenda, with investors forecasting a notable monthly decline.
Moreover, several FOMC members will speak today, including Waller, Evans, and Bostic.
Yesterday, global markets experienced a risk-off day, pushing US yields and stocks lower. However, today's trading is quite the opposite as equity futures are rising along with US yields.
The USDJPY pair is marching toward 122 and rising vertically without any meaningful correction as it touched the highest level since December 2015. At the same time, the EURUSD pair hovers near 1.10 and the dollar index traded slightly below the psychological level of 100.