US Futures Trade in the Green
US futures were higher on Wednesday, with contracts on the Nasdaq gaining almost 1%, as Treasury yields continue to fall and investors try to shrug off concerns about a slower global economic recovery amid rising coronavirus and restrictions in many countries. Meanwhile, flash Markit PMIs will be in the spotlight while durable goods orders unexpectedly fell after 9 consecutive months of gains. Also, Fed Chair Powell and Treasury Secretary Yellen will continue their testimony to the Congress on the CARES Act. Powell reiterated on Tuesday the US economy is strengthening but the recovery remains far from complete. On Tuesday, the Dow Jones fell 308 points or 0.9% to 32,423. The S&P 500 retreated 30 points or 0.8% to 3,911. The Nasdaq dropped 150 points or 1.1% to 13,228.
UK Shares Edge Down for 2nd Session
The FTSE 100 traded slightly down on Wednesday, following a 0.4% loss in the previous session, and in line with its European peers, amid mounting concerns over rising infections and restrictions in Europe and threats by the European Union to halt the export of vaccines. Britons could face a £5,000 fine if they leave the UK without a reasonable excuse under new coronavirus rules coming into force next week. On the data front, the inflation rate unexpectedly slowed to 0.4% as clothes and footwear prices fell the most since 2009 due to more discounting triggered by the latest UK lockdown. Flash Markit PMI data showed business activity across the UK private sector returned to growth in March after two months of decline, led by the fastest increase in service activity since August 2020 and as manufacturing activity expansion accelerated to a 40-month high.
South African Rand Strengthens
The South African rand traded higher at 14.8 against the greenback on Wednesday, after latest data showed South Africa’s consumer inflation rate slowed to an eight-month low of 2.9% in February, dipping below the central bank’s target range of 3-6%, just a day before the monetary policy decision. The South African Reserve Bank’s monetary policy meeting is due to be concluded on Thursday, with policymakers widely expected to keep interest rates unchanged. Meanwhile, market sentiment was tempered by concerns over the country’s vaccination rollout and a possible third wave of infections. Elsewhere, traders monitor the reimposition of tighter restrictions across Europe, as well as tensions between the West and China.
Italian Shares Trade Around the Flatline
The FTSE MIB swung between gains and losses on Wednesday, in a bearish day for European markets, as investors continue to worry over a new coronavirus wave in the continent that could delay plans to ease restrictions. In Italy, Draghi told Senators he plans to reopen schools and kindergartens after Easter, including in red zones, which have a weekly incidence higher than 250 cases per 100 thousand inhabitants. On the data front, both services and manufacturing activity in the Euro Area beat forecasts in March, with Manufacturing PMI hitting a record high of 62.4, while the contraction in services eased. On the corporate front, Leonardo shares plummeted after the IPO of its American subsidiary DRS was postponed amid adverse market conditions.