- Yields on US 10-year bonds hold firmer around the March 2020 high.
- Hopes for US stimulus propel the bulls despite tension between the US and Iran and mixed news surrounding COVID and vaccines.
- A virtually empty economic calendar on Monday keeps investors’ appetite for risk intact.
While reflecting the market optimism, US bond yields remain higher on Monday. This can be seen in 10-year US Treasury yields testing the March 2020 high and marking a rise for the sixth day in a row.
Following the push from US senators to the key aid package, comments from the US Secretary of the Treasury, Janet Yellen, and the president Joe Biden, have led to a start to the week with a firmer tone. Sentiment received additional help after the Washington Post suggested a benefit of $ 3,000 per child.
Bond yields rose to multi-day highs on Friday after members of the U.S. Democratic Party managed to push through the president’s $ 1.9 trillion COVID aid package Biden through the Senate. The long-awaited stimulus proposal returns to Congress for more details.
Market sentiment could also be helped by President Biden’s push to open schools safely, as well as the zeroing of coronavirus numbers in China for the first time in 2021.
Alternatively, the refusal of the United States to withdraw sanctions on Iran and signals from Tehran to go ahead with its arms embargo if Washington does not return to the 2015 agreement defy sentiment.. It should be noted that the second case of the virus in Melbourne defies the authorities, while the tension between the UK and the EU may also weigh on risk sentiment. Furthermore, a study, reported by the Financial Times, showing the inability of the Oxford-AstraZeneca vaccine to stop the South African variant of COVID-19, puts additional pressure on risk.
Not just U.S. bond yields, but S&P 500 futures and Asia-Pacific stocks are also favoring the bulls amid a lack of major catalysts and an empty economic calendar Monday.
Investors will turn to news about the US stimulus and vaccine developments for fresh momentum.
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