Treasury yields surpassed the 1% mark amid the US congressional elections and rising oil prices

The 10-year bonds yield, which is the main benchmark for global interest rates, has surged by 50 basis points as the market considers the winning of the Democrats and the US Congress being taken under control. Georgia's election results are expected to lead to increased fiscal stimulus.

Now the market has a new benchmark. Investors will be monitoring whether the 10-year Treasury bonds yield can exceed the March high of 1.27%, which will rule out expectations of further monetary policy liberalization. Against this background, the S&P 500 futures are in no hurry to return to the highs and are slightly declining in the European session.

The positive news for the commodity market came from the OPEC+ meeting. Saudi Arabia will unilaterally cut crude oil production by a million barrels per day in February and March as part of an OPEC+ deal. At the same time, Russia will be able to increase production. This step has already been called a "New Year's gift", which led to the growth of futures for Brent crude oil by almost 5%. European energy stocks demonstrated the biggest growth and surpassed November rates.

The only negative moment for the market is the deterioration of the epidemiological situation. The daily increase in people infected with coronavirus in the UK continues to break records: according to the Ministry of Health, 1 out of 30 Londoners are infected with the virus. Germany has tightened restrictive measures: the passage of people from home is only possible up to 15 kilometers, and public gatherings are prohibited.

The stock market is trading in different directions. The dollar index continues to update lows.

S&P 500 (F) 3,698.62 -19.63 (-0.53%)

Dow Jones 30,391.60 +167.71 (+0.55%)

DAX 13,713.75 +62.60 (+0.46%)

FTSE 100 6,668.55 +56.30 (+0.85%)

USD Index 89.280 -0.129 (-0.14%)

• – UK Services PMI at 12:30 (Dec.) (GMT+2);
• – US ADP Nonfarm Employment Change at 16:15 (GMT+2);
• – US crude oil stocks at 18:30 (GMT+2);
• – Minutes of the FRS meeting at 22:00 (GMT+2).

by JustMarkets, 2021.01.06

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.