S&P 500 futures are gaining ground in premarket trading as Treasury yields continue to move lower.
Yesterday, the U.S. reported that Core Inflation Rate increased by 1.3% year-over-year in February compared to analyst consensus of 1.4%. The market has been recently focused on the threat of higher inflation so this report was a surprise.
Weaker inflation data put pressure on Treasury yields and U.S. dollar, which lost ground against a broad basket of currencies. Lower yields and weaker dollar are bullish for stocks. If bullish sentiment prevails, S&P 500 will have a good chance to move to all-time high levels in the upcoming trading sessions.
European Central Bank Will Increase The Pace Of Asset Purchases
ECB has recently announced that it decided to leave the interest rate unchanged at 0%. The deposit facility rate was left at -0.5%, in line with the analyst consensus.
According to the Bank’s statement, the purchases under the pandemic emergency purchase programme (PEPP) over the next quarter will be conducted at a significantly higher pace than during the first months of this year.
The faster pace of asset purchases will serve as an additional bullish catalyst for global markets. Interestingly, the news did not put any pressure on EUR/USD as traders continued to sell the dollar in order to purchase riskier currencies.
This environment is bullish for precious metals so gold and silver continue their rebound which is good for shares of gold and silver miners.
Initial Jobless Claims Decline To 712,000
The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports.
Initial Jobless Claims report indicated that 712,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 725,000. Continuing Jobless Claims report was also better than expected as Continuing Jobless Claims decreased from 4.34 million (revised from 4.3 million) to 4.14 million compared to analyst consensus of 4.22 million.
The reports will likely provide additional support to the stock market at the start of the trading session as they show that the situation in the job market continues to improve.