Equities rally strongly on Tuesday, consolidate on Wednesday

Investors piled back into tech stocks on Tuesday as US yields declined somewhat, with the Nasdaq 100 soaring 4%, one of the best days in a long time. On Wednesday, we are seeing some consolidation as most of the indices are flat on the day.

Yesterday, Eurozone quarterly GDP was revised down to -0.7% in the fourth quarter from the first reading of -0.6% despite stronger Germany’s growth, as the lockdowns across the euro area weighed on growth.

Later in the day, the significant US CPI numbers are due. Markets expect the year-on-year gauge to rise notably to 1.7% from 1.4% previously, while the core gauge is forecast to stay unchanged at 1.4%. Volatility will most likely be elevated after the release. 

Investors will also focus on the US 10-year bond auction. Last time in February, bonds were priced at 1.15% but considering yields have risen sharply since then, this auction could tell us if the demand for US debt has increased or decreased. 

Additionally, the Bank of Canada’s meeting is due, and the central bank is expected to leave monetary policy unchanged. However, a dovish commentary might follow. The USDCAD pair is expected to be volatile afterward. 

In the FX, the EURUSD pair rose to 1.19 as the greenback corrected some of its previous gains. Commodity currencies strengthened, and the Cable jumped above 1.39. 

Source: https://www.axiory.com/market-news/equities-rally-strongly-on-tuesday-consolidate-on-wednesday