Dollar, stocks, oil all rise on stimulus hopes, virus’s retreat

Markets are cheering the growing prospects of robust fiscal stimulus following statements from Washington and disappointing Nonfarm Payrolls. The dollar is on the rise alongside rising yields and oil is eyeing higher levels. Falling virus figures outweigh concerns about vaccine efficacy.

Stimulus: President Joe Biden and Treasury Secretary Janet Yellen have been stressing the need for passing a substantial relief package in weekend interviews. Their urge comes after Nonfarm Payrolls figures for January fell short of estimates with an increase of only 49,000. Stocks are on the rise amid hopes for faster growth.

Some economists fear excessive stimulus would stoke inflation, and some investors seem to agree, as several indicators show. Bonds are sold off, resulting in higher yields that in turn, make the dollar more attractive. Returns on ten-year Treasuries are nearing 1.20%.

EUR/USD has retreated from 1.2050, after hitting that level in response to US jobs figures. The Sentix Investors Confidence gauge for February is due out on Monday.

Oil prices also extend their upward march, with Brent hitting $60 and WTI changing hands above $57 at the time of writing. Apart from stimulus hopes, high levels of compliance among OPEC+ members are contributing to the upswing.

Coronavirus cases are retreating in the US, the UK and also the EU, adding to the positive mood as investors seem to shrug off concerns that some variants of the disease may be vaccine-resistant. South Africa suspended the rollout of AstraZeneca’s jabs after a study examining its effect on the local variant was inconclusive.

Britain’s immunization campaign continues at full speed, with the nation inoculating over 12 million people. Prime Minister Boris Johnson is set to unveil a plan to ease restrictions later in February.

Cryptocurrencies: DogeCoin has hit new highs over the weekend after Tesla’s founder Elon Musk touted the relatively obscure digital coin. Ethereum has retreated from the all-time highs but remains above $1,600, Bitcoin has pared its gains and XRP is hovering above $0.40.

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