Stocks, Bonds Rise With Inflation Concern Fleeting

US stocks climbed to record highs and bond yields fell as investors bet that a higherthan-forecast rise in inflation won’t be enough to slow economic stimulus measures. The S&P 500 rose by 0.33% to 4,141.59 while Dow Jones was down 68.13 points (0.20%) to 33,677.27.

Consumer Prices in US Advance by Most in Nearly Nine Years

US consumer prices climbed in March by the most in nearly nine years as the end of pandemic lockdowns triggered a rebound in travel and commuting that pushed up the cost of gasoline, car rentals and hotel stays. The consumer price index increased 0.6% from the prior month after a 0.4% gain in February. The jump in the cost of gas accounted for almost half the overall March advance.

EU to Lay Out US$1 Trillion Debt Plan to Start Rivaling Treasuries

EU is set to lay out its blueprint to raise nearly US$1 trillion of debt over five years as it seeks to fund its recovery from the coronavirus pandemic. The bloc is aiming to issue the first debt under its NextGenerationEU stimulus in June and will use a “state of the art” platform to begin selling bonds and bills via a network of primary bank dealers by September. Almost a third of the 806 billion euros will be in green bonds, using a framework of rules to be published in early summer.

French Economy Is Weathering April Lockdown Better Than Last Year’s

The French economy is slowing only slightly in April due to the tightening of Covid-19 restrictions, easing concerns that school closures would cause a deeper contraction. The Bank of France said activity will decline to 7% below pre-crisis levels in April after President Emmanuel Macron imposed stricter travel restrictions and ordered schools and nurseries to close. The hit to activity in March was 4%.

UK Economy Rebounds in February as End of Lockdown Nears

The UK economy rebounded in February as a mass vaccination program and the prospect of a loosening of coronavirus restrictions lifted consumer confidence. Gross domestic product rose 0.4% following a revised 2.2% decline in January. All the main sectors of the economy saw output rise. The economy remains 7.8% smaller than it was before the pandemic hit Britain in February 2020.

Australia Recovery Strengthens as Business Conditions Hit Record

Australia’s economic recovery is intensifying as a National Australia Bank Ltd. report showed business conditions (measuring hiring, sales and profits) climbed to a record high even as the government was withdrawing its JobKeeper wage subsidy. An index of conditions jumped to 25 points in March from 17 a month earlier. The employment index climbed to 16 points from 9, pointing to ongoing strength in hiring.

China’s Trade Surges as Global Economy Recovers From Pandemic

China’s trade jumped in March, a sign that the global recovery from the Covid-19 pandemic is well on track as vaccine rollouts around the world pick up pace. Exports climbed 30.6% in dollar terms in March from a year earlier. Imports jumped 38.1%, beating expectations and leaving a trade surplus of US$13.8 billion for the month. Export momentum remained strong after record gains in February.

Oil Rises With Opec Expecting Demand Rebound to Absorb Output

Oil closed at the highest in over a week after OPEC boosted its expectation for this year’s demand recovery, while signs continue to emerge of rising fuel consumption in parts of the world. Brent crude for June settlement rose US$0.39 to US$63.67 per barrel.

Source: Affin Hwang Research - 14 Apr 2021