Global stocks reach all-time highs on strong China GDP, soft US bond yields
Global stocks soared to record highs after China reported a record economic expansion in Q1 and from soft US bond yields. China’s GDP in Q1 expanded 18.3% YoY, close to expectations, but a big improvement over Q4’s 6.5%. US bond yields fell to 1.58% after starting the month at 1.75%. The dollar was mixed, but mostly lower against its peer currencies. US Housing Starts and Building Permits for March both exceeded expectations. US stocks opened mixed, gold jumped by $10 to $1,775 per oz. and oil prices are unchanged.
“The cheerful mind perseveres, and the strong mind hews its way through a thousand difficulties.”
April 16, 2021
EUR/USD 1.1983 GBP/USD 1.3779 USD/CAD 1.2503 AUD/USD 0.7739 USD/JPY 108.85 USD/CNH 6.5204 USD/ILS 3.2774 USD/MXN 19.9910 USD/CHF 0.9197 USD/INR 74.355 USD/BRL 5.6699 USD/SGD 1.3341 USD/DKK 6.2064 USD/SEK 8.4406 USD/NOK 8.3728
The dollar is lower, erasing earlier gains, on the back of a risk-on mood in the markets. Falling US bond yields and upbeat Chinese GDP data were the primary drivers. This morning’s release of strong housing data helped stocks, hurt bonds (yields gained 2 bps), and had little impact on the dollar.GBP
The UK pound is little changed overnight, underperforming its G-10 peers versus the US dollar. Traders are seen unwinding some of the currency’s premium over the US dollar and euro from the UK’s successful vaccination program in Q1. There were no economic releases today.EUR
The rising EUR is approaching $1.20, a level that hasn’t been reached since early March. As expected, Eurozone CPI in March rose 1.3% YoY, up from February’s 0.9%. The Stoxx Europe 600 Index rose for the seventh straight week. Next week the ECB meets and no change to its -0.50% benchmark rate is expected.CAD
The Canadian dollar was the top G-10 performing currency, gaining 0.3% versus the US dollar. The overall risk-on mood in the markets, fueled by lower US bond yields, is driving commodity prices higher and the stronger CAD.ASIA/PACIFIC
The Chinese yuan moved little overnight, but other Asian currencies soared against the US dollar. The THB, INR, IDR and others are benefiting from lower US dollar interest rates and strong economic data out of China – record 1Q GDP of 18.3% met expectations, and Retail Sales for March rose 34% YoY, exceeding expectations and showing a more balanced economy along with healthy exports and government spending.
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