Rising yields are spoiling the party again.

12/03/2021

Friday saw some sharp reversal in tech stocks, and the Nasdaq 100 index was down 1.3% during the London session, erasing most of yesterday's gains.

US yields are rising again as the consolidation period might be over for now. The benchmark 10-year yield rose nearly 5 basis points to trade at around 1.6%. Should the yield rise above last week's highs, we could see another leg lower in equities. 

However, yields are really extended from their moving averages, which calls for a correction, at least from the short-term perspective. Bonds are very oversold as well, but this situation can last for many more days...

Elsewhere, the UK GDP data showed the British economy shrank 2.9% in January, leaving it 9% smaller than its pre-pandemic peak.

Later in the day, the Canadian labor market data are due, which will most likely have a large impact on the USDCAD pair. 

The greenback strengthened notably on Friday, and the EURUSD pair was down half a percent to trade near 1.1940, with the euro remaining below the psychological 1.20 level. 

As usual, metals plunged, undermined by the rising yields and stronger USD, and gold was down 1%, hovering just above the 1,700 USD level.
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