Stocks Rise After Fed Minutes as Volume Dwindles

Stocks rose with the dollar and Treasuries were mixed after Fed refrained from signaling it will make any changes to its bond-buying program any time soon. The S&P 500 rose by 0.15% to 4,079.95 while Dow Jones was up 16.02 points (0.05%) to 33,446.26.

US Trade Deficit Widened to Record US$71.1 Billion in February

The US trade deficit widened in February to a record high as solid household and business demand kept imports running ahead of shipments to overseas customers. The gap in trade of both goods and services increased to US$71.1 billion in February from a revised US$67.8 billion in January. A decline in exports exceeded a drop in the value of imports during the month as severe winter weather disrupted two-way trade.

US Consumer Credit Surges by the Most Since Late 2017

US consumer borrowing surged in February by the most since late 2017 as a broader re-opening of the economy from pandemic restrictions helped spark an increase in credit-card balances. Total credit jumped US$27.6 billion from the prior month, the largest gain since November 2017, after a revised US$94 million January gain. On an annualized basis, borrowing rose 7.9% in February.

Fed Officials Back Dovish Powell View Despite Brighter Outlook

Fed Chair Jerome Powell’s dovish message on an incomplete economic recovery won the day when officials met last month, with a record of the gathering showing a unanimous near-term policy outlook. Participants noted that it would likely be some time until substantial further progress toward the committee’s maximum-employment.

Euro-area Companies Return to Broad Growth on Vaccine Optimism

Euro-zone companies have returned to broad-based growth for only the second time since the pandemic started, with factories booming and confidence high that vaccinations will soon end the coronavirus crisis. Germany, Italy, Spain and Ireland all saw business activity rise last month and France halted its contraction. Factory output increased in March at the fastest pace and the service sector came close to stabilizing.

UK Services Activity Accelerates as Upbeat Mood Spurs Hiring

Activity in the UK‘s service industries grew at the fastest pace since August last month as businesses prepared for the easing of Covid-19 restrictions. Markit PMI climbed to 56.3 in March, the first time in five months it was above the critical 50 mark that signals expansion. Firms recorded their strongest optimism in more than 14 years and resumed hiring for the first time since the pandemic reached the UK a year ago.

Jokowi Backs Central Bank Mandate to Aid Indonesia’s Growth

President Joko Widodo is backing a push to expand BI’s mandate to include bolstering the economy, throwing his public support behind a legislative move that some analysts see as risking the central bank’s independence. He noted that BI shouldn’t just manage the currency, but also should support sustainable economic growth and job creation. Economy is set to grow as much as 7% in the second quarter compared to last year.

Oil Rises Alongside Broader Market With Eyes on Summer Rebound

Oil edged higher alongside broader markets as reopening efforts gained traction in the US and helped ease concerns over virus-related setbacks elsewhere. Brent crude for June settlement rose US$0.42 to US$63.16 per barrel.

Source: Affin Hwang Research - 8 Apr 2021