Equities Reverse As Yields Pick Up Again

It’s been something of a false start for equities markets this week. Global equities benchmarks began the week on a strong footing, with most indices trading firmly higher over Monday as risk appetite picked up on the back of US yields reversing on Friday. However, the move proved to be short lived and with yields turning higher again today, seeing the US Dollar making strident gains, equities have started to give back some of yesterday’s gains.

So far, these losses look to be confined to US and Asian indices, however, with UK and European asset markets remaining in the green for now. The focus on vaccination progress is helping offset some of the negativity with UK investors now looking to the chancellor’s spring budget due to be delivered tomorrow.

The budget is thought to include a significant degree of help for businesses and consumers alike in a bid to help boost the economy as the UK starts to open up again over Q2. In Europe, though vaccinations are moving at a slower pace, progress is being made and traders are looking ahead to the summer with hopes that the tourism industry won’t be as decimated as it was last year.

Technical Views

DAX

The DAX found support once again at a test of the 13744.70 level, keeping the bull trend intact for now. However, price remains capped by the 14128.76 level to the topside, which bulls will need to see broken to encourage fresh upside momentum. Any break lower will put the focus on support at the 13322.69 level next

S&P500

The S&P has turned lower from the recent 3964.25 level highs. Price corrected below the 3868.25 level last week, approaching the rising trend line from 2020 lows, but buying kicked in to take price back above the level, keeping the bullish bias intact for now.

FTSE

The FTSE continues to hover around the 6640.6 level, trading within the centre of the contracting triangle pattern which has framed recent price action. While price holds above the 63964 level, the focus remains on an eventual break higher targeting 7025.8 next.

NIKKEI

The NIKEI has turned lower from the recent 30752.5 highs but found support into the 29005.6 level. Price is now fighting to reclaim the 29749.1 level which bulls will need to sustain to keep upside momentum intact. Below 29005.6, the next level to watch is the 28372.5 level.

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