USD/JPY Threatens Key Multi-Month High, BOJ's Kuroda Speech Eyed

US equity markets saw an influx of strength today as investors continue to grow more optimistic about the global economic recovery. The Dow Jones Industrial Average (DJIA), S&P 500, and small-cap Russell 2000 index all closed at record highs. Technology stocks also gained, pushing the Nasdaq 100 Index 1.12% higher. The 10-year Treasury yield pulled back slightly along with other longer-dated government bond yields.

Wall Street will turn an eye to US retail sales for February, slated to cross the wires Wednesday, with analysts expecting a 0.5% drop versus the prior month, according to the DailyFX Economic Calendar. A better-than-expected figure will likely add to the economic rebound story as vaccine progress in the United States continues to progress.

The vaccine rollout in the United States has seen better progress than initially expected. More than 109 million doses have been administered so far in the US, according to Bloomberg. Markets will also be watching the Federal Reserve as the central bank begins a two-day meeting when it will announce a decision on interest rates later this week.

DOW JONES VS US 10-YEAR TREASURY YIELD - 30-MINUTE CHART

dow vs ten year

Chart created with TradingView

TUESDAY’S ASIA-PACIFIC OUTLOOK

Asia-Pacific equity markets may move higher at the open after a mixed performance on Monday. Hong Kong’s Hang Seng Index (HSI) closed 0.33% higher. However, liquidity concerns pushed mainland China’s CSI 300 deep into the red, closing 2.15% lower. Elsewhere, Australia’s ASX 200 managed to gain 0.09%, while South Korea’s KOSPI lost near’ a quarter of a percentage point.

The liquidity concerns in China drove sentiment to help push equities in the country lower despite better-than-expected data prints on Monday showing the world’s second-largest economy’s recovery remains strong. Concern over the Chinese government tightening conditions stemmed from the People’s Bank of China (PBOC) injecting 100 billion Yuan – nearly matching the amount due in markets.

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