Meanwhile, rising Treasury yields put pressure on precious metals.
Strong Economic Sentiment In The Euro Area Provides Support To Global Markets
EU provided the second estimate of the fourth-quarter GDP Growth Rate which showed that GDP declined by 0.6% quarter-over-quarter compared to analyst consensus which called for a decline of 0.7%.
Employment Change report indicated that the number of employed persons in the Euro Area grew by 0.3% quarter-over-quarter in the fourth quarter of 2020.
ZEW Economic Sentiment Index grew from 58.3 in January to 69.6 in February compared to analyst consensus of 57. Interestingly, strong economic sentiment provided more support to EUR/USD than to European equity markets but managed to boost global market sentiment.Advertisement
Rising Yields Put Pressure On Precious Metals
The sell-off in U.S. bond markets continued after the Presidents’ Day, and the yield of 30-year Treasuries increased to a multi-month high of 2.07%.
The main reason for the continued sell-off in the bond markets is the expectation of higher inflation after the new round of economic stimulus which may be close to the original $1.9 trillion proposal.
Rising yields put additional pressure on gold and silver which provide no yield for investors. Gold is currently trying to get to the test of the $1800 level. If gold manages to settle below this level, it will gain additional downside momentum and head towards the next support at $1785 which will be bearish for shares of gold miners.
Oil Pulls Back Despite Freezing Cold In Texas
WTI oil declined below the $60 level despite the major disruption brought by surprising cold in Texas. According to recent forecasts, the weather is set to gradually improve which may be putting some pressure on oil.
Meanwhile, Norway’s oil workers reached a deal with a union that prevented a strike at the Mongstad crude terminal, which served as an additional bearish catalyst.
In addition, oil looked ready for a pullback after the major rally. It should be noted that stock traders missed yesterday’s action in the oil market due to the holiday, so oil-related stocks may still have a strong trading session despite the current pullback.