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Biden signed the $1.9 trillion package into law, with equity markets up globally; ECB holds rates at 0%, stabilizing GBPEUR exchange rate

BLOG March 12, 2021 at 06:42 am (GMT)

• Biden signed the $1.9 trillion stimulus package into law, boosting the equity market
• USD slightly up but remains near one-week low as bond yields drop
• GBPEUR steady as ECB holds interest rates at 0%

Biden has already signed the massive $1.9 trillion package, strengthening the hope on economic recovery. As a result, the US equity market rallied to their record highs during Thursday’s session. Dow Jones, S&P 500 and Nasdaq 100 surged 0.58%, 1.04% and 2.36% respectively. Aside from the stimulus package, the US has also released a better-than-expected jobless claims report. The figure for last week landed at 712k, beating the forecast at 725k, also marking a continuous decline from January’s peak. The labor market sentiment has been significantly improved with the positive news, paving the way for a gradual economic reopening. In the FX market, USD was slightly up during Friday morning’s session in Asia but still remains near its one-week low, as yields retreat a little bit. As investors are cheering over the upcoming stimulus, USD needs to watch out for imminent inflation.
Encouraged by the US, APAC markets are set to gain as well. Futures across Japan, China, Australia, and Hong Kong, South Korea, Taiwan and Singapore are all pointing to open modestly higher. Australia’s ASX 200 opened up nearly 1% higher and currently trades at +0.79% at press time. Nikkei 225 opened with some pressure but quickly surged to +1.73% at press time.
GBPEUR exchange rate remains steady today after ECB confirmed the forecasts and held interest rates at 0%. The pair currently fluctuates around 1.17 at press time. Aside from the interest rates, ECB also pledged to accelerate bond purchases and other stimulus means to boost Eurozone’s worrying economic situation in the next few months. In the UK, daily cases of COVID continue to fall throughout the country, with weekly confirmed cases down by 459 and hospitalized cases down by 3,450. GBP traders will be eyeing on today’s release of the Manufacturing and Industrial Production data as well as the final GDP data for January, which is expected to fall by 4.9%. EUR traders, on the other hand, will see the release on Eurozone’s Industrial Production figures, expected to be improve by 0.2%.