Asian Shares; Dollar Goes Up Over the U.S. Stimulus, Meanwhile Bonds Go Down

In Asia, the news was upbeat, as China’s exports surged 155% in February compared with a year earlier. Much of the economy was shut down to fight the pandemic last year.

On Monday, Asian shares rallied while the dollar held near three-month highs. This came after the U.S. Senate passage of a $1.9 trillion stimulus bill bode well for a global economy. Although, it also put new pressure on Treasuries.

Later this week, the Democrat-controlled House is expected to pass the bill.

The U.S. stimulus, faster reopening, and greater consumer firepower altogether were positive for the dollar. This was a statement from Athanasios Vamvakidis, a BofA analyst.

He said total U.S. fiscal support is six times greater than the EU recovery fund. This includes the current proposed stimulus package. Additionally, further upside from a second-half infrastructure bill. 

The Federal Reserve is also supportive, with the U.S. money supply growing twice faster than the Eurozone, Vamvakidis added.

MSCI’s broadest index of Asia-Pacific shares outside Japan was firm at 0.5%. In Japan, Nikkei gained 0.9%, while Chinese blue chips 0.7%.

On Friday, the S&P 500 futures added 0.3% after a sharp turnaround. EUROSTOXX 50 futures were up on Wall Street by 1.2% and FTSE futures by 1.3%.

The move-in futures after the senate passed the stimulus bill

Elsewhere this week, Dow futures rose on Sunday as a new stimulus package from Washington headed toward final passage. 

Futures contracts tied to the Dow Jones Industrial Average added 155 points, or 0.5%, while those for the S&P 500 added 0.4%. Those for Nasdaq 100 steadied, hinting at a continued underperformance by tech stocks for Monday.

This progress on the $1.9 trillion economic relief and stimulus bill on Saturday provided extensions to unemployment benefits. Moreover, another round of stimulus checks, as well as aid to state and local governments. 

President Joe Biden should sign the bill into law before unemployment aid programs expire on March 14.

U.S. Data

Last month, U.S. data showed nonfarm payrolls surged by 379,000 jobs. In a positive sign for incomes, spending, and corporate earnings, the jobless rate dropped to 6.2%

U.S. Treasury Secretary Janet Yellen noted the true unemployment rate was nearer 10%. She also noted that there was still plenty of slack in the labor market. This was in an attempt to counter inflation concerns.

Following this data, yields on U.S. 10-year Treasuries were still hitting a one-year high of 1.625% and standing at 1.59% on Monday. For the week, the yields grew 16 basis points, while German yields dropped 4 basis points.

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