US indices trying to turn positive after yesterday's huge reversal

24/02/2021

US equities were trying to hold some small gains on Wednesday morning, with the main benchmarks trading from flattish to slightly higher during the London session.

EU bourses were circa half a percent higher, with the FTSE and CAC indices totally ignoring yesterday's slump.

Traders hoped that Jerome Powell would save the day, once again, as stocks fell sharply over the previous days and yields rose significantly. 

Indeed, the Fed chief Powell reiterated on Tuesday that US interest rates would remain low for some time. The central bank will keep buying bonds to support the U.S. economy, even as Congress prepares to authorize President Joe Biden’s new 1.9 trillion USD support package.

Stocks rallied sharply after his remarks and erased all daily losses, posting huge reversal bars. Therefore, traders might continue to buy equities as the Fed has their backs.

In the FX, the GBPUSD pair continues to go higher every day, with the pair now trading near 1.42, levels last seen in April 2018. The EURUSD pair ticked higher as well, while the USDJPY was bid and supported by rising US yields. 
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