Wall Street Extends Gains
US stocks traded higher on Friday, extending gains from the previous session, amid a general improvement in investors’ mood on signs of a brighter economic outlook. President Joe Biden has doubled his goal for coronavirus vaccination to 200 million by the end of April. Meanwhile, the Fed announced that temporary and additional restrictions on bank holding company dividends and share repurchases currently in place will end for most firms after June 30th. On the data front, fresh PCE figures painted a mixed picture: personal income fell slightly less than expected while spending declined at a faster pace and prices pointed to tame inflation.
Coal Remains Near 2-Year High
The coal futures remained above $90 per tonne, a level not seen since March 2019, as top consumer China is expected to face shortages in imports of coking coal from major supplier Mongolia after fresh Covid-19 restrictions were reintroduced at the Ganqimadodu border, the gateway for Mongolia coking coal to China on March 16th. Coal prices are up almost 80% from a nearly 4-year low of $50.45/tonne hit in August, supported by government policies, particularly China’s ban on Australian coal imports and supply issues after producers cut on output as prices weakened during the height of the lockdowns across Asia.
US 10-Year Treasury Note Yield Cuts Some Gains
The yield on the benchmark 10-year Treasury note touched 1.669% on Friday, erasing some gains but remaining close to levels not seen in over a year, after data showed consumer spending fell more than expected in February and personal income tumbled the most on record. The PCE price index edged up 0.1% as expected. Yields have been rising since August but the upturn momentum gained speed from mid-January as coronavirus vaccination and further fiscal stimulus support prospects of a strong economic recovery but can lead to a spike in inflation and debt levels. Still, Fed Chair has been reiterating any spike in inflation would likely be temporary and showed no concerns over the recent rise in bond yields.
Brazil Current Account Gap Narrows in February
Brazil’s current account deficit narrowed to USD 2.3 billion in February of 2021 from USD 4.7 billion in the same month of the previous year and below market expectations of a USD 2.4 billion gap. The services deficit shrank to USD 1.4 billion, from USD 2.3 billion a year earlier, while the goods surplus narrowed to USD 0.4 billion from USD 1.8 billion in January of 2020, due to a 14.5 percent jump in imports while exports rose 4.3 percent. Meantime, the primary income deficit went down to USD 1.7 billion from USD 4.3 billion and the secondary income surplus rose to USD 0.3 billion from 0.2 billion in the same period of 2020.