Nasdaq futures fell as much as 2% on Friday after rebounding more than 6% in the past three sessions, after a new spike in U.S. bond yields restarted inflation fears and sent investors scurrying to the perceived safety of the dollar, while hammering global stocks. A Bloomberg report that Beijing is expanding a crackdown on Tencent Holdings also weighed on the technology sector. S&P 500 futures were also dragged down after ending at record closing highs, and we last trading just above 3,910, down 16 points, or 0.4%, while Dow E-minis were up 12 points.

Friday’s selloff was sparked after the yield on the benchmark 10-year notes rose back above 1.60% on Friday to approach the one-year highs touched last week (more below).

Friday’s caution followed the signing of a $1.9 trillion U.S. stimulus bill into law on Thursday and a further dovish tilt from the European Central Bank that had prompted a retreat in bond yields and eased global concerns about rising inflation. Biden had signed the stimulus legislation before giving a televised address in which he pledged aggressive action to speed vaccinations and move the country closer to normality by July 4.

“U.S. Treasury yields are still setting the tone,” said Piotr Matys, a strategist at Rabobank in Moscow. “That said, the 10-year yield faces a strong technical barrier. It’s reasonable to assume that this area should hold and prevent a further squeeze towards 2%, which in turn would bode well for emerging-market currencies.”

“The risks of inflation picking up have increased significantly due to a jump in money supply through stimulus and the anticipated demand that we might see as the economy slowly unlocks,” said Jonathan Bell, chief investment officer at Stanhope Capital in London.

High duration, yield-sensitive stocks like Facebook, Apple, Amazon, Netflix, Google, Tesla and Microsoft were all down between 1% and 3% in premarket trading. Big U.S. banks including JPMorgan, Bank of America and Citigroup were among the few gainers in early deals. U.S.-listed shares of China-based JD.com Inc dropped nearly 3% after three sources said it is in talks to buy part or all of a stake in brokerage Sinolink Securities worth at least $1.5 billion. Cosmetics retailer Ulta Beauty Inc slumped about 8% after its annual revenue forecast missed estimates, as demand for make-up products were under pressure due to extended work-from-home policies.

“We have recently seen some erratic market moves across asset classes, as well as within equity market sectors and styles. A period of digestion thus seems logical and healthy,” Barclays analyst Emmanuel Cau said in a note.

Despite today’s drop, Wall Street – which is recovering after coming under pressure in recent weeks as a consistent rise in U.S. bond yields – is set for its best week in six after one of the largest U.S. fiscal stimulus was signed into law and data showed fewer-than-expected jobless claims numbers.

Europe’s Stoxx 600 Index was down 0.5%, with tech the biggest decliner. The Stoxx 600 Technology Index dropped as much as 2.1% to be the region’s worst-performing sub-index. Prosus is the biggest faller on the gauge as Tencent is said to face a China clampdown. Aside from tech, autos and miners are weak. A resurgence of the virus in Italy coupled with division over AstraZeneca Plc’s Covid-19 vaccine also hit sentiment. Burberry Group rose following an announcement that the rebound in its fourth quarter has been stronger than analysts expected. Here are some of the biggest European movers today:

• Burberry shares jump as much as 10% after the British trench- coat maker said a rebound in its fourth quarter was stronger than analysts expected. “This is a strong recovery of performance,” said Jefferies.
• SPIE shares rise as much as 9.6%, hitting the highest since March 2018, with Jefferies highlighting a strong performance on cash and de-leveraging in a note.
• Barclays shares gain as much as 3.7% to be among best performers on Stoxx 600 Banks Index as Goldman Sachs upgrades the lender to buy from neutral with a Street-high price target.
• Groupe Bruxelles Lambert jump as much as 2.8% to the highest since February 2020, as Degroof Petercam says the company produced a “solid performance.”

Earlier in the session, Asian stocks erased gains amid declines in financial companies led by AIA Group while technology shares rose across the region. Shares of chipmakers and related suppliers advanced, extending gains in global sector names following news that China’s main industry association will work with its U.S. counterpart to discuss supply-chain safety and trade restrictions. AIA Group lost more than 5%, contributing most to a near 1% drop in the MSCI Asia Pacific Financials Index. The insurer’s measure of future profitability of new policies sold declined 33% in 2020 to $2.8 billion, missing analysts’ estimates for a 30.5% slide. By country, benchmarks in Japan and South Korea led gains. SoftBank Group gave the Nikkei 225 a leg up after Coupang, in which SoftBank is a key investor, rose 41% in its U.S. trading debut. Hong Kong’s Hang Seng Index underperformed, weighed by financials

In rates, 10-year Treasury yields surged as much as eight basis points to breach the key technical level of 1.6% Friday, once again reminding investors that bond volatility has become the companion of go-big fiscal stimulus. As usual, bets that extra government spending could overheat the economy were out in full force after U.S. President Joe Biden signed off on $1.9 trillion of stimulus.

“The odds are that European fixed income outperforms as sovereign curves, particularly in the periphery, will flatten and that the spread between the U.S. and European interest rate curve will widen,” said Nordea analyst Sebastien Galy who added that “the U.S. 10-year yield has further room to go and could reach 1.80%. Growth stocks maintain a high sensitivity to rates, which continues to suggest that they are quite overvalued.”

Meanwhile, Bloomberg notes that European yields are lagging the move higher in Treasuries, prompting strategists to bet on greater divergence, unless the Fed does anything to change it. Most European Central Bank policy makers have no intention of expanding their 1.85 trillion-euro ($2.2 trillion) emergency stimulus program despite their pledge on Thursday to step up the pace of bond buying to keep yields in check, according to officials familiar with the matter.

Still, against that backdrop of super-loose monetary policy, analysts largely expect inflation to pick up as vaccine rollouts lead to a reopening, leading to worries that Biden’s stimulus package could overheat the economy.

“If inflation remains contained at low levels, then there will be little pressure on the Federal Reserve to raise rates and in such a scenario, robust growth and abundant liquidity may continue to drive markets higher,” said Mark Dowding, CIO at BlueBay Asset Management. “However, if inflation trends upwards, then bond yields and policy rates will rise and this may create a much more challenging market dynamic.”

In FX, the dollar gained 0.5% against the yen and 0.1% against the euro and pound, although the latter was helped by news the economy had contracted less than expected in January. The Bloomberg Dollar Spot Index rose for the first time in four days, with the greenback extending its advance in European trading; risk-sensitive currencies and the Swiss franc led declines while the euro neared $1.19. Emerging-market currencies snapped a two-day advance, heading for the longest streak of weekly losses since August 2019, as a spike in U.S. 10-year Treasury yield to 1.6% raised concern riskier assets will lose their appeal. Turkey’s lira and Mexico’s peso led declines among peers as investors dumped high-beta currencies that tend to move closely with global risk appetite.

Markets are likely to remain volatile in the second quarter, particularly for the dollar, which was much stronger than expected at the start of the year, said Cliff Zhao, chief strategist at China Construction Bank International. “So I think the strong U.S. dollar may weigh on some liquidity conditions in the emerging markets,” he said.

Oil prices retreated as the dollar gained, with U.S. crude dipping 0.5% to $65.68 a barrel. Brent crude lost 0.5% to $69.27 per barrel. Spot gold prices fell 1.1% to $1,702.9 an ounce.

Looking at the day ahead, we get the February PPI print and the March Michigan Sentiment indicator.

Market Snapshot

• S&P 500 futures down 0.6% to 3,902.00
• MXAP little changed at 208.04
• MXAPJ down 0.4% to 695.44
• Nikkei up 1.7% to 29,717.83
• Topix up 1.4% to 1,951.06
• Hang Seng Index down 2.2% to 28,739.72
• Shanghai Composite up 0.5% to 3,453.08
• Sensex down 0.8% to 50,856.39
• Australia S&P/ASX 200 up 0.8% to 6,766.81
• Kospi up 1.4% to 3,054.39
• SXXP Index down 0.5% to 422.19
• German 10Y yield up 2 bps to -0.32%
• Euro down 0.5% to $1.1922
• Brent futures little changed at $69.62/bbl
• Gold spot down 1.1% to $1,703.77
• U.S. Dollar Index up 0.51% to 91.89

Top Overnight News from Bloomberg

• The ECB’s promise to “significantly” boost the pace of its bond purchases is threatening to turbo-charge a yield divergence with the U.S. that could drive money out of Europe, unless the Federal Reserve ramps up its commitment to ease policy at its own meeting next week
• Bank of France Governor Francois Villeroy de Galhau says there was no discussion of changing the size of the PEPP asset purchase program at the European Central Bank‘s meeting Thursday
• Most ECB policy makers have no intention of expanding their 1.85 trillion-euro ($2.2 trillion) emergency stimulus program despite their pledge on Thursday to step up the pace of bond buying to keep yields in check, according to officials familiar with the matter
• An upstart contender to U.S. Treasuries has emerged in the wake of last month’s vicious debt rout. Chinese government bonds have defied the turbulence rocking peers from Australia to Europe, offering a port in the global reflation storm
• The Treasury market selloff last week came amid signs investors are deleveraging. In a curious twist though, instead of dealer inventories rising as a consequence, they unexpectedly collapsed. One explanation for the disconnect is that dealers are taking steps to trim holdings before the expiry of a key regulatory exemption on March 31
• At next week’s policy review, the Bank of Japan is considering releasing an analysis of the potential impact of lowering its negative interest rate to show its determination to use this option if needed, according to people familiar with the matter
• U.K. Prime Minister Boris Johnson insists any friction suggested by more high-frequency data has been mere “teething problems,” but the evidence from the statistical agencies of Germany, France and Italy had suggested there was a hefty drop in shipments from the EU to Britain in the first month after the transition period ended
• AstraZeneca Plc will supply less than half the planned number of Covid-19 vaccines to the European Union in the second quarter after the company’s efforts to remedy a slew of problems ran into further trouble
• The government of Prime Minister Mario Draghi is weighing stringent new restrictions on as many as two- thirds of Italians, with the regions encompassing the country’s largest cities possibly heading into lockdown amid a resurgence in the pandemic

A quick look at global markets courtesy of Newsquawk

Asian equity markets mostly took impetus from the gains on Wall Street where the S&P 500 and the DJIA notched fresh record highs as sentiment was supported by incoming stimulus after US President Biden signed the USD 1.9tln COVID-19 relief bill and with outperformance in the Nasdaq amid a resurgence of the tech sector. ASX 200 (+0.8%) was positive with the gains in Australia led by tech stocks which found inspiration from their stateside counterparts and with strength across commodity-related sectors. Nikkei 225 (+1.7%) continued to coat-tail on currency moves and with speculation rife ahead of next week’s BoJ meeting with rumours that the BoJ plans to scrap its ETF target which is currently at JPY 6tln annually with a ceiling of JPY 12tln. Hang Seng (-2.2%) and Shanghai Comp. (+0.5%) lagged as US-China tensions persisted ahead of next week’s high-level meeting, with the US planning to address Uighur genocide and Secretary of State Blinken also stated the US condemns China’s assault on democracy in Hong Kong. Furthermore, the US placed fresh restrictions on licenses for some Huawei suppliers in which it informed suppliers that Huawei licenses are not valid for 5G use and participants also digested weak earnings results including AIA Group, China Unicom and MTR Corp. Finally, 10yr JGBs traded rangebound with demand sapped by gains in Japanese stocks although downside was also cushioned by the BoJ’s presence in the market today for a total 950bln of JGBs with varying maturities.

Top Asian News

• Rakuten to Raise $2.2 Billion as Japan Post, Tencent Invest
• China Hits Out at New Huawei Curbs, Says U.S. Can’t Be Trusted
• Ant Group Pledges to Keep Lid on Lending to Young People
• China Pollution Crackdown Exposes Rule Breakers in Top Steel Hub

Equities in Europe have been drifting lower since the cash open (Euro Stoxx 50 -0.6%) in a reversal of the notable upside seen this week, and as the region failed to grapple onto the mostly positive APAC handover. The pressure across stocks is seemingly emanating from the increase in yields after US President Biden unsurprisingly signed the COVID relief bill into law and 30yr issuance, with the US 10yr oscillating around 1.60% and in turn weighing on US equity futures, namely the tech-laden and growth-heavy NQ (-1.7%) following this week’s impressive rebound from technical correction territory. Back to Europe, news flow has remained light as attention remains on yield action, with European bourses modestly softer, but with losses less dire vs State-side futures. FTSE MIB (-0.3%) upside is capped by reports of fresh lockdown measures across Italy, whilst the IBEX (-0.1%) is cushioned by its banking exposures. Sectors in Europe are mostly lower but Banks reap rewards from the higher yields and thus outperform. In-fitting with the NQ performance, Tech resides at the foot of the pile. Autos are also pressured as DAX-heavyweight Daimler (-2.3%) is subdued after Renault (-0.4%) announced the successful sale of its entire Daimler Stake (1.54%) at EUR 69.50/shr, whilst Daimler is also to recall 2.6mln Mercedes-Benz vehicles in China, according to the Chinese Market Regulator. In terms of individual movers, Barclays (+2.2%) is bolstered by an upgrade at Goldman Sachs coupled with the high-yield environment, whilst Deutsche Bank (+0.6%) also sees some positive omens from a reaffirmation of its earnings. Burberry (+7%) stands as the European outperformer as the boost in Asia sales had been strong enough to lift its annual profit forecasts. On the flip side, Berkeley Group (-6.5%) plumbs the depths as the group anticipates the value of reservations to be some 20% lower Y/Y.

Top European News

• Two-Thirds of Italians Set to Face Lockdown as Pandemic Worsens
• Italy’s Asset Manager AMCO Set to Handle Soured Pandemic Debt
• U.K. Economy Shrank Less Than Expected In January Lockdown
• Homebuilder Berkeley Says Lockdown to Cut Sales Reservations

In FX, if there was any doubt about the power of yields in terms of an overarching force, the abrupt turnaround in direction for the Greenback and broad risk sentiment should remove all uncertainty. However, the catalyst for the latest reversion to bear-steepening in US Treasuries and other global bonds is less clear-cut, as the 30 year auction was not a flop and the fact that President Biden signed off on stimulus a day earlier than initially anticipated is neither here nor there, albeit cheques and direct back account credits will arrive more promptly. Hence, the rationale may actually lie elsewhere given a sharp fall from grace in Eurozone debt after a brief PEPP boost and even more pronounced reversal in UK Gilts in wake of mostly better than forecast data and details of Q2 DMO issuance. Moreover, the Buck may be benefiting from some supportive technical factors as the DXY stages an impressive comeback from 91.396 to 91.956 and back above 91.740 that remains a key pivot on many charts. Ahead, PPI data and the first look at Michigan sentiment for March.

• CHF – Far from alone in context of literally yielding to the resurgent Dollar, but bearing the brunt after reinforcement from the SNB that negative rates and intervention are essential to curb Franc strength. Usd/Chf is over 0.9300 again and Eur/Chf probing 1.1100 to the upside.
• NZD/AUD – Little chance for the Kiwi to appreciate a further easing of COVID-19 restrictions in Auckland as Nzd/Usd retreats from circa 0.7233 towards 0.7170 and Aud/Nzd edges closer to 1.0800 even though the Aussie is also flagging against its US peer having touched 0.7800 before waning to sub-0.7750. At this stage, more decent option expiry interest in the cross at the 1.0730 strike (1.3 bn) looks safe, but Aud/Usd is currently at the lower end of 0.7745-60 expiries (1.2 bn) and not too far from similar size sitting between 0.7725-20 (1.1 bn).
• EUR/JPY/GBP – The Euro remains very volatile in wake of Thursday’s ECB policy meeting and unexpected QE shift designed to keep financing conditions favourable in the face of higher yields, if not put a lid on long term rates explicitly. Eur/Usd is now trying to retain hold of the 1.1900 handle after getting to within a whisker of yesterday’s 1.1990 high that aligned with a Fib retracement from recent peak to y-t-d low (38.2% of the move from 1.2243-1.1836 to be precise). Note also, heavy option expiry interest protects the upside as 2.6 bn sits from 1.1995 to 1.2000, while 1 bn at 1.1930 may offer the Euro some support. Elsewhere, the Yen is eyeing Tuesday’s 2021 trough after falling through 109.00 again and failing to extend beyond 108.50 every day so far this week or gleaning any lasting traction from the numerous BoJ reports via sources touting clarity around YCT at the upcoming policy review meeting. Conversely, the BoE is still more inclined to let the market determine the path for yields, but Cable has been unable to breach 1.4000 convincingly for psychological reasons and a major Fib level in keeping with the Euro, as 1.4010 represents a 50% retracement of the fall to 1.3779 from 1.4240.
• CAD – Another rebound in crude prices has helped the Loonie resist Greenback advances to a degree, as Usd/Cad straddles 1.2550, but Canadian jobs data looms hot on the heels of the BoC’s Economic Progress Report that essentially echoed Wednesday’s policy meeting assessment of the economy and outlook.

In commodities, WTI and Brent front month futures have nursed overnight losses despite a distinct lack of pertinent news, but potentially on the aforementioned reflation/fiscal narrative. WTI May has returned to its pre-APAC level above USD 66/bbl (vs low USD 65.40/bbl), whilst its Brent counterpart gains further ground north of USD 69.75/bbl (vs low USD 69.03/bbl). The only notable news thus far emanated from Saudi Aramco who lowered oil supplies to some Northern Asian purchasers in April, according to sources, and maintained average monthly oil supply to Indian refineries in April, rejecting calls for additional volumes. Elsewhere, precious metals bear the brunt of rising yields and a firmer Buck, with spot gold briefly giving up the USD 1,700/oz in early European trade (vs high USD 1,728/oz), whilst spot silver trades subdued on either side of USD 25.50/oz. Turning to base metals, LME copper future are pressured by the overall downbeat tone and firmer Buck, with the red metal briefly dipping below USD 9,000/t. Finally, Dalian iron ore futures saw another session of losses amid the ongoing pollution-curbs imposed by China’s top steel-making city Tangshan.

US Event Calendar

• 8:30am: Feb. PPI Final Demand MoM, est. 0.5%, prior 1.3%; YoY, est. 2.7%, prior 1.7%;
• 8:30am: Feb. PPI Ex Food, Energy, Trade MoM, est. 0.3%, prior 1.2%; YoY, est. 2.5%, prior 2.0%
• 8:30am: Feb. PPI Ex Food and Energy MoM, est. 0.2%, prior 1.2%; YoY, est. 2.6%, prior 2.0%
• 10am: March U. of Mich. Current Conditions, est. 88.3, prior 86.2; Expectations, est. 72.0, prior 70.7

DB’s Jim Reid concludes the overnight wrap

The beast has been starved for a month but yesterday we saw the S&P 500 (+1.04%) climb to its first new record close since February 12th. Tech continued this week’s comeback as the NASDAQ rose +2.52% and the NYSE FANG added +3.92% following the whipsaw in technology stocks in recent sessions. Tesla (+4.72%), Amazon (+1.83%) and Apple (+1.65 %) all advanced further. Small-caps didn’t miss out on the fun as the Russell 2000 (+2.31%) also hit a record high. In terms of sectors, Semiconductors (+3.63%), Media (+2.42%) and Software (+1.83%) were once more the leading industry groups in the S&P, while Banks (-0.48%) and Telecoms (-2.01%) were among the laggards. The rotation trade overall has slowed somewhat this week though on a YTD basis US banks are up +22.8% to the NYFANG’s +6.0% gain. Bitcoin (+1.22%) rose to a new record close of its own yesterday, closing at 57,624.

Across the Atlantic, the STOXX 600 (+0.48%) also rose with Travel and Leisure stocks (+2.53%) leading the way, followed closely by Technology (+2.35%) and Basic Resources (+2.15%). The rally in the STOXX 600 Travel and Leisure stocks took the index within 1% of its pre-pandemic levels, in a sign that markets are increasingly pricing in normality. The outlier was European banks, which fell -1.36% after an ECB meeting that encouraged lower yields.

Before we go through the ECB in more detail let’s look at the impact on fixed income. 10y bund yields fell -5.3bps to three week lows just after the initial announcement before reversing some of the gains to finish -2.1bps lower at -0.33%. Italian 10y BTP yields briefly dropped to their lowest level since 22 February before stabilising at 0.60%, down -7.4 basis points on the day. The spread between the Italian and German 10y yields tightened to 93.5 basis points, the lowest since 22 February as well.

While in the US, 10y Treasury yields were +0.7bps higher to finish at 1.544% after spending most of the session lower in yield. The results of a $24bn auction of 30-year US government bonds went smoothly, which tailed by around half a basis point with notably strong direct bidding. Staying with fixed income supply, Verizon sold $25bn of bonds – the largest bond sale of 2021 – in order to finance its 5G and spectrum expansion. It was met with at least $109bn of orders which helped sentiment to some degree. That level of demand could bring other issuers to market in the coming weeks. Elsewhere, the US dollar weakened -0.49% for its third straight daily decline and its biggest one day pullback in just over a month. However, the US dollar is trading up +0.15% this morning.

The highlight of the day was the ECB meeting and their response to the recent rise in government bond yields. The central bank said in its monetary policy decision that “Based on a joint assessment of financing conditions and the inflation outlook, the governing council expects purchases under the PEPP (pandemic emergency purchase programme) over the next quarter to be conducted at a significantly higher pace than during the first months of this year.” Our Chief Economist Mark Wall and team put out a note last night (link here) where they highlight that the way the ECB is implementing the flexibility of the PEPP could have unintended consequences. President Lagarde implied that the Governing Council would only consider adjusting the pace of purchases once per quarter based on financing conditions and inflation metrics.

In speaking to a few people about this yesterday, many were confused as to why the ECB had set themselves a quarterly review framework for PEPP rather than continuing to have a more opaque and flexible approach. The view is that they’ve now given the market something specific to focus on and tapering becomes a more binary issue rather than more gradual. Our rates Strategy Francis Yared thinks this ECB decision is likely to mark the high watermark for ECB purchases for several reasons. This include the fact that the key relevant market indicators (GDP weighted real yields, GDP-weighted nominal yields, euro, peripheral spreads and breakevens) are at levels at which the ECB is implicitly or explicitly comfortable with. Also the ECB revised up the risks to the outlook without taking into account the impact of the US fiscal stimulus so that should make a difference over the next three months. See the blog here.

On the topic of that stimulus bill, President Biden signed the American Rescue Plan into law yesterday, a day earlier than originally planned. White House Press Secretary Psaki told reporters that Americans will begin to receive direct payments “as early as this weekend.” This came ahead of the President’s prime-time address overnight where he outlined the benefits of the bill but then made headlines by directing all states to make all US adults eligible for vaccinations by May 1, with a soft goal of having Americans be able to celebrate July 4th in small groups. This comes as he announced that the US would reach his administration’s goal of 100m shots in his first 100 days by his 60th day instead.

Overnight in Asia, markets are mostly trading higher with the Nikkei (+1.77%), Kospi (+1.46%), Shanghai Comp (+0.17%) and Asx (+0.79%) all advancing. The Hang Seng (-0.34%) is an exception to this pattern. Meanwhile, futures on the S&P 500 are up +0.15% but those on the Nasdaq (-0.03%) are showing signs of pausing for breath. European futures are pointing to a mixed open. Yields on 10y USTs are up +1.1bps and those on Australia’s 10yr are up +5.1bps.

We also saw some headlines on the BoJ’s ongoing policy review with the Mainichi newspaper reporting that the central bank is likely to eliminate its annual target to buy JPY 6tn of exchange-traded funds while keeping a ceiling of JPY 12tn on possible annual purchases. This is likely to give more flexibility to the BoJ in its buying but is unlikely to be a game changer for markets.

In other overnight news, Bloomberg has reported that the White House has informed some suppliers to Huawei of tighter conditions on previously approved export licenses, prohibiting items for use in or with 5G devices. The report added that the 5G ban is effective as of this week. Meanwhile, Reuters reported that India is on its way to blocking Huawei equipment.

In terms of the pandemic, Denmark, Norway and Iceland have suspended use of the AstraZeneca vaccine in a “precautionary” move after a Danish woman died with blood clots following inoculation. Though Danish and EU authorities said it could not yet be concluded whether there was a link between the blood clots and the vaccine. At least five other European countries also have halted the use of a specific batch of the vaccine this week, after reports of blood clots sparked a safety probe from the European drugs watchdog. Overnight, Thailand has also temporarily suspended use of the AZ vaccine until there’s more clarity from investigations of possible blood clots. Meanwhile, the European Union’s drugs regulator on Thursday approved Johnson & Johnson’s single dose COVID-19 vaccine. The shot is the fourth to be endorsed for use in the EU after vaccines from Pfizer-BioNTech, AstraZeneca-Oxford University and Moderna, and is recommended for those over 18 years of age, the European Medicines agency (EMA) said. The United States, Canada and Bahrain have also approved the shot.

In terms of restrictions, governments in both France and Germany are resisting tightening restrictions or enacting lockdowns even as the former is seeing 350 cases per 100k inhabitants weekly and the latter the most cases since late-January. Meanwhile curbs on movement and social behaviour continue to be relaxed in the US, where New York will no longer require quarantining by domestic travellers as of April 1 and North Carolina looks to open all schools this month.

Looking at yesterday’s data releases, the most important filing was the US jobless claims data. They dropped to a 4-month low last week as an improving public health environment allows more segments of the economy to reopen. Initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 712,000 for the week ended March 6, the lowest level since early November. Still, a full recovery will probably take some time as the weekly unemployment claims report from the Labor Department on Thursday also showed a whopping 20.1 million Americans collecting unemployment checks in late February.

To the day ahead now, the calendar is full with economic data releases. Germany and Spain are due to report final inflation data for February. While the UK is expected to release GDP data, construction output and industrial and manufacturing production for January, along with trade balance data. The eurozone will post industrial production for January, Canada will release employment data for February. And the US will offer up February PPI and the March Michigan Sentiment indicator.