Biden’s new spending boosts yields, virus and margin call concerns linger

US yields are on the rise as Biden is set to present his spending plan, yet the dollar is gaining mostly against virus-ravaged Europe. Concerns about rising cases in the US counter high vaccine eligibility. Markets are watching Consumer Confidence and the Archegos saga. Bitcoin remains bid after boosting from Visa.

Infrastructure boost: Details of President Joe Biden’s infrastructure plans are becoming to come out, and they will include green energy investment and potentially defer tax hikes to a separate bill. Higher debt issuance prospects have triggered a sale of bonds, lifting ten-year yields above 1.70% and also jolting the five-year yields higher. The dollar remains bid.

US vaccines: COVID-19 cases continue rising in the US, causing the head of the CDC to warn of an “impending doom.” The increase comes as the economy opens up rapidly amid the vaccination campaign, Around 90% of Americans will be eligible for a jab by April 19.

The Conference Board’s Consumer Confidence gauge for March is set to show an increase in sentiment amid the economic boom and the arrival of stimulus checks.

Markets continue following the collapse of Archegos Capital, a family fund that collapsed on Friday, causing leveraged trades to cause shocks in markets and incurring losses on several banks. Investors continue poring over the details, trying to understand if founder Bill Hwang’s woes are idiosyncratic or the sign of systemic risk.

Vaccines: A real-world study in the US has shown that Moderna and Pfizer’s immunizations prevent 90% of infections. Several Canadian promises have limited the usage of AstraZeneca’s vaccines due to blood clot concerns.

EUR/USD is on the back foot, trading near the lowest this year as the old continent continues struggling with the vaccine rollout. In Germany, politicians are pointing fingers at each other as cases rise and the population is frustrated with lockdowns.

GBP/USD is holding up above 1.3850 as the UK continues opening up and cases are falling.

Bitcoin shot up on Monday after Visa announced it would allow transactions with the cryptocurrency. BTC/USD is hovering around $58,000.

Subscribe to our newsletter

Don't miss new updates on your email