Vaccine optimism, a calmer bond market, stimulus & Zoom in focus

US regulators approve JNJ vaccine boosting hopes of a quicker reopening. The bond market stabilises leaving US stimulus & Zoom earnings after the closing bell focused .
US futures

Dow futures +1% at 31235

S&P futures +1% at 3848

Nasdaq futures +1.2% at 13070

In Europe

FTSE +1.3% at 6568

Dax +0.9% at 13918

Euro Stoxx +1.3% at 3683

Stocks cheers the covid stimulus bill progress

US stock markets are pointing to a stronger start amid a calmer mood within the bond market and leaving the main target firmly on the US covid stimulus bill which was voted on within the House of Representatives over the week and now makes its thanks to the Senate where it’s expected to be voted on next week.

Calmer bond market

After the bond market rout roiled financial markets last week, the image is notably calmer in the week . the ten year US treasury yield continued to ease back from its spike higher to 1.6% last week to current levels of 1.43%.

However, speeches by Federal Reserve System policymakers John Williams and Lael Brainard could well push the main target back on inflation expectations and therefore the bond market.

Manufacturing PMIs focused

The latest round of producing PMIs have revealed broadly upbeat readings; China being the notable outlier. China’s Caixin PMI dropped to its lowest level in 9 months, although the market has shrugged off the figures given the likely distortion from the Lunar New Year .

Final PMI’s were upwardly revised across Europe with the Eurozone PMI recording its highest level since 2018 as demand surged.

US ISM manufacturing PMI is due at 15:00 UTC.

FDA approves Johnson & Johnson vaccine

Reopening optimism is adding to the upbeat mood after the US regulators approve the Johnson & Johnson round covid vaccine. this is often the third vaccine to receive approval stateside and has the potential to hurry up the reopening process dramatically boosting risk sentiment.

Zoom earnings

One of the most beneficiaries of the pandemic has undoubtedly been Zoom. It’s share price has soared across the year from an IPO price of $36 in late 2019 and valuation of $9 billion to its current price of $370 and a valuation of $120 billion.

Revenue has also surged with Q3 seeing a 367% jump in revenue to $777.2 million, well before the $694 million expected and significantly up from Q1 2020 revenues of just $328 million. The share price has been on the decline since late October’s all time high of $588 because the prospect of a successful vaccine rollout and economies reopening have raised fears that growth will slow. So guidance are going to be closely eyed. Expectations are for EPS $0.78c.

FX – EUR shrugs off accelerating German inflation

The US Dollar is extending 0.6% gains from the previous week. US Dollar Index DXY +0.15% holding above 91.00.

EUR/USD – trades depressed versus the stronger USD despite German inflation accelerating in February. German CPI February jumped 1.7% vs 1% Jan and 1.2% expected. The ECB weekly bond purchases are awaited.

Analyst Fiona Cincotta looks at EU/USD price action and levels to observe .

GBP/USD trades -0.20% at 1.3906

EUR/USD trades -0.25% at 1.2045

Oil resumes uptrend

Oil along side other risk assets is on the increase at the beginning of the week due to the upbeat market mood. Investors still cheer the continued economic recovery and therefore the prospect of a vaccine led reopening of the economy.

Iran’s rejection of the EU and US’s invitation for direct nuclear talks is additionally underpinning the worth . Iran refuses to restart talks without the US first halting sanctions.

Attention will address this week’s OPEC+ meeting with chatter surrounding a production hike increasing.

US crude trades +2% at $62.25

Brent trades +0.4% at $64.81