Stocks Climb on Powell’s Reassurance; Dollar Falls

Stocks climbed as Fed Chairman Jerome Powell said the central bank has the tools to curb any inflation pressures, which are expected to be temporary as the economy reopens.The S&P 500 rose by 0.42% to 4,097.17 while Dow Jones was up 57.31 points (0.17%) to 33,503.57.

US Jobless Claims Jump, Showing Choppy Labor-market Recovery

Applications for US state unemployment insurance unexpectedly rose for a second week, underscoring the uneven nature of the labor market recovery. Initial claims in regular state programs increased by 16,000 to 744,000 in the week ended April 3, Labor Department data showed. California and New York led states with the biggest increases in unadjusted claims.

Powell Vows to Restore ‘great’ Economy, Plays Down Inflation

Powell pledged to get the US back to a “great economy” and invoked a homeless encampment in downtown Washington to make the point that the recovery remains incomplete. The Fed chair said that his commute home takes him past a “substantial tent city,” and that he thought of the millions of Americans who are still trying to get back to work.

RBC’s CEO Cautions Trudeau Against Overspending in New Budget

RBC’s CEO David McKay cautioned the Canadian government against overspending in this year’s budget, saying that previous stimulus programs already have the economy primed for a strong recovery. Prime Minister Trudeau has said he has voters’ support to release a debt-financed recovery plan. Finance Minister Chrystia Freeland is scheduled to unveil government’s first full spending plan in two years, on April 19.

Lagarde Says Ambitious, Coordinated Fiscal Aid Still Crucial

European Central Bank President Christine Lagarde said governments can’t afford to let up efforts to support the region’s economy through the pandemic-induced crisis. She said that an ambitious and coordinated fiscal stance remains crucial, as a premature withdrawal of fiscal support would risk delaying the recovery and amplifying the longer-term scarring effects.

German Factories Remain Resilient to Crisis as Orders Rise

German factory orders rose in February, supporting Europe’s largest economy through coronavirus restrictions that continue to persist. Demand increased 1.2%. The gain was driven by orders from within the country and the euro area, with those for investment goods especially strong. The reading underlines how resilient Germany’s manufacturing sector has been to the latest round of curbs.

Philippine Central Banker Sees No ‘drastic’ Liquidity Moves

Current monetary policy in the Philippines is adequate to address the economic fallout of the pandemic, while there’s still scope for additional aid on the part of fiscal authorities, the central bank’s governor said. They feel that their current monetary policy stance is still appropriate for the economy. So he doesn’t think there would be any drastic moves on their part to inject any more liquidity into the system.

Oil Closes Lower With Underlying Market Structure Holding Firm

Oil closed lower, yet its underlying market structure firmed, as investors assessed the challenges to a global economic recovery. Brent crude for June settlement rose US$0.04 to US$63.20 per barrel.

Source: Affin Hwang Research - 9 Apr 2021