The Friday Market Minute
- Global stocks extend gains heading into the final trading days of the month with U.S. markets seeing support amid a noted divergence with Europe in terms of post-pandemic potential.
- U.S. dollar index rises to the highest levels since the November election as domestic assets continue to find favor among foreign investors.
- Benchmark 10-year Treasury note yields rise to 1.68% following yesterday's disappointing 7-year note auction and further signs of a solid post-pandemic recovery.
- Oil prices rebound as Suez Canal blockage continues into its third day, with salvage experts warning that removing the 1,300-foot Ever Given could take weeks.
- CDC data shows 47.4 million Americans have now been fully vaccinated against the coronavirus, with more than 133.3million doses administered as of Thursday.
- U.S. equity futures suggest a modestly firmer open on Wall Street ahead of personal consumption data at 8:30 am Eastern time.
U.S. equity futures extended gains Friday, with traders also eying another leg up in Treasury bonds yields, as the divergence between America's accelerating post-pandemic recovery and Europe's uneven response to a spring surge in infections continues to boost domestic assets.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, bumped 0.3% higher in overnight trading to an early November high of 92.847, illustrating foreign appetite for domestic stocks and bonds amid a vaccine rollout that President Joe Biden vowed would reach 200 million citizens by the middle of May.
The dollar's gains, however, are also coming in parallel with a jump in Treasury bond yields, with benchmark 10-year notes rising to 1.68% in early New York trading following yesterday's disappointing auction of $62 billion in 7-year notes and data showing the lowest number of weekly jobless applications in more than a year.
Oil and commodity prices may offset the rise in yields and provide an early boost for the Dow Jones Industrial Average, with U.S. crude rising $1.66 per barrel to just over $60 as the Suez Canal remains blocked by the grounded Ever Given, extending a trade-damaging snarl in the world's most important trade waterway.
Futures contracts tied to the Dow indicate a 135 point opening bell gain, while those linked to the S&P 500 are priced for a 5 point advance for the broader benchmark.
The tech-focused Nasdaq Composite index is looking at a modest 70 point opening bell dip, with traders eyeing 10-year note yields heading into the start of the Friday session.
In Europe, energy and commodity prices boosted export stocks, which also found extra gains from a weaker euro and a stronger-than-expected reading of business sentiment from the closely-watch Ifo Institute in Germany, the region's largest economy.
The Stoxx 600 was marked 0.7% higher in the opening hours of trading, paced by a 0.8% gain for German's DAX performance index, while Britain's FTSE 100 was marked 0.75% higher in London.
Overnight in Asia, the region-wide MSCI ex-Japan benchmark caught the tailwind of last night's late-hour rally on Wall Street and rose 1.4% on the session, while Japan's Nikkei 225, heading to the end of its fiscal year on March 31, rose 1.56% to close at 29,176.70 points.