US Tech Stocks Rebound as Global Bond Rout Eases

US tech stocks staged a modest rebound on the last day of a tumultuous week as a global bond rout eased, sending the yield on 10-year Treasuries tumbling below 1.5%. The S&P 500 fell by 0.48% to 3,811.15 while Dow Jones was down 469.64 points (1.50%) to 30,932.37.

Biden, Yellen Back Fast Senate Stimulus Action to Boost Economy

President Joe Biden called on lawmakers to quickly approve his US$1.9 trillion Covid- 19 aid package, which passed the House of Representatives and heads to the Senate. Biden added that an “overwhelming” percentage of the Americans support the legislation. Treasury Secretary Janet Yellen said that the stimulus bill ensures that people make it to the other side of this pandemic and are met there by a strong, growing economy.

US Drops Digital Tax Demand, Opening Door to Global Deal

The US has dropped a key demand in negotiations over digital taxation of technology companies such as Alphabet Inc.’s Google and Facebook Inc., lifting a barrier that had raised transatlantic trade tensions and prevented an international deal. Treasury Secretary Janet Yellen told her counterparts at a virtual meeting of Group of 20 finance officials that the US is no longer calling for a so-called safe harbor rule that would allow US companies to opt out of paying such a tax overseas.

BOE’s Haldane Sees Risk of Central Bank Complacency on Inflation

Bank of England Chief Economist Andy Haldane said he sees a risk of UK inflation accelerating more than expected, warning fellow central bankers against being too relaxed about taming the rise in consumer prices. “There is a tangible risk inflation proves more difficult to tame, requiring monetary policy makers to act more assertively than is currently priced into financial markets,” Haldane said.

French Inflation Stronger Than Expected But Spanish Prices Wilt

French inflation was stronger than estimated in February while Spanish prices unexpectedly resumed their decline, highlighting the uncertain outlook for the economy as consumers wait for the end of the pandemic. French inflation was 0.7%, slightly below January’s level but above forecasts for a 0.5% increase. Spain’s rate was -0.1%, as electricity prices slid.

India Central Bank Favors Retaining Inflation Target Regime

The Reserve Bank of India said that its current inflation targeting regime is effective at containing price-growth and that it recommends the government renew it for another five years. The existing mandate requires the RBI to keep headline inflation at the 4% midpoint of its target range of 2%-6%.

China’s Economic Recovery Slows Amid Holiday Disruptions

China’s economic recovery slowed in February as factories shut during the Lunar New Year holidays and virus restrictions dampened what’s usually a busy travel season. The official manufacturing purchasing managers’ index fell to a nine-month low of 50.6 from 51.3 in January as export orders plunged, the National Bureau of Statistics said.

Oil Falls With Stronger Dollar Denting Best Start to Year Ever

Oil fell the most since November with a stronger dollar and concerns surrounding inflation weighing on crude’s best start to the year on record. Brent crude for April settlement fell US$0.75 to US$66.13 per barrel.

Source: Affin Hwang Research - 1 Mar 2021