US open Wall Street points higher tech rebounds jobless claims beat

US futures

Dow  futures +0.3% at 32391

S&P futures +0.7% at 3923

Nasdaq futures +1.8% at 12758

In Europe

FTSE -0.05% at 6722

Dax +0.2% at 14561

Euro Stoxx +0.4% at 3834

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Jobless claims best forecasts

Initial jobless claims fell to 712k the lowest level since the start of the pandemic a sign that the economic recovery and the labour market recovery are gaining strength. Expectations had been for 725k initial claims whilst last week’s number was revised higher to 754k.

The upbeat data comes as the House of Representatives pass $1.9 trillion stimulus package.

Bond auctions

Bond auctions have been more in focus this week than any week for a long time. Yesterday’s 10 year treasury auction saw sufficient demand to pull yields back down to sub 1.5% for thi first time in a week, a significant fall from the yearly high of 1.61% reached on Monday.

The 30-year bond auction will take place today against an easier backdrop after US CPI fell short of expectations pouring cold water on runaway inflation fears.

US core CPI missed forecasts at 1.3% YoY.

Stocks set to jump after stimulus bill passed

The House of Representatives passed the $1.9 trillion stimulus package- the largest US history. The bill will see American’s receive $1400 stimulus checks within days and $300 unemployment benefits will be extended. The broad expectation is that the US economic recovery will accelerate thanks to the stimulus and American’s willingness to spend.

The Nasdaq is set to outperform its peers with futures +1.7%, after underperforming the S&P and the Dow Jones in the previous session.

Stocks in focus:

American Airlines trades +1.2% after announcing it will sell $7.5 billion of bonds and leveraged loans to repay government debt.

Bumble – trades +10% pre-market after reporting a larger than expected rise in Q4 revenue in its first quarterly results since going public.

Tesla – trades +3.7% pre-market. The EV makers won the award for best selling EV in China overnight and has also raised the prices for a couple of its models, including Model Y Long Range & Model S Plaid by $10000.

Where next for Tesla share price?

Tesla has been trending lower since February declining from its all time high of 900.00 to 540.00 earlier this month.

The stock rebounded off support at 540.00 pulling out off oversold territory on the RSI. It has pushed back over the 20 sma on the 4 hour chart which now offers immediate support at 660.00. If the bulls can push over 720 horizontal resistance yesterday’s high the buyers could gain momentum towards the 50 sma at 745.00.

FX – ECB stays pat on rates, PEPP purchases to ramp up

The US Dollar is trading firmly lower as inflation fears ease and the bond market rout comes under control. DXY trades back under 92.00

EUR/USD – holds gains post ECB announcement. The ECB, as expected kept interest rates on hold and confirmed their accommodative stance. The ECB also affirmed the size of the PEPP €1.85 trillion however has said that purchases over the next quarter will be significantly faster. In effect the ECB are looking to front load the PEPP.

Attention will turn to Christine Lagarde who will likely face questions over the level at which the ECB would change its bond purchases. Concerns over resurging covid could also be aired in the Q&A time.

GBP/USD trades +0.3% at 1.3973

EUR/USD trades +0.35% at 1.1970

Fiona looks at the price action of EUR/GBP and levels to watch here

Oil extends gains despite grim EIA data

After a softer start to the week oil is advancing for a second straight session, lifted by the improving economic outlook although gains are being capped by grim inventory data.

The passing of the US stimulus package is boosting expectations of a faster US economic recovery which is good news for oil demand.  

However, gains are being capped following EIA data. US crude stockpiles hit 13.8 million barrels as the impact of the Texas cold snap, which halted some oil production, continues to be reflected in the data. Stockpiles were well ahead of the 816,000 build predicted, although down from the record 21.5 million the previous week.

OPEC is due to publish its monthly report on global oil markets which could add some colour to the recent swings in inventories.

US crude trades +1.5% at $65.3

Brent trades +1.5% at $68.66

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

15:00 JOLTS job openings

18:00 30 year bond auction