Vaccine Increase, Texas Reopening, ADP Payrolls

© Reuters

By Geoffrey Smith – The US will have enough vaccines for all adults by May as Texas ends trade restrictions and lifts its mask mandate. ADP releases its private payroll reports for February, stocks are expected to rebound from losses on Tuesday, and the European Central Bank has changed its mind to halt the rise in bond yields. Oil prices are buoyant again ahead of the OPEC + meeting, and US inventory data is due later. Here’s what you need to know in the financial markets on Wednesday March 3rd.

1. Vaccines galore; Texas lifts mask mandate

After a deal between Johnson & Johnson (NYSE 🙂 and Merck that will significantly expand production capacity for J & J’s newly approved single vaccine against Covid-19, the US economy is well on the way to reopening faster than originally thought.

President Joe Biden said the deal should ensure all American adults have the opportunity to be vaccinated by the end of May, two months earlier than previously thought. This increases the prospect of an earlier and more extensive reopening of the tourism and hospitality industries in particular.

In a separate but related development, Texas became the largest state to date to lift its mandate to wear masks and end business restrictions associated with Covid. The move highlighted not only a sharp drop in infections and hospital stays in recent weeks, but the need for Governor Greg Abbott to change the local political narrative following last month’s energy disaster during the cold snap.

2. Australia gives a taste of life after the pandemic

Australia gave the northern hemisphere a taste of what to expect when economies reopen for the summer.

The “happy country” saw GDP growth of 3.1% in the final quarter of last year, well above expectations of 2.5%, largely due to consumers spending the excess savings they made had accumulated in the previous quarters. Many policymakers, including Bank of England Governor Andrew Bailey, have forecast a sharp surge in spending on services, particularly as the lockdowns are lifted.

However, the short-term reality remains more worrying. Italy announced plans to tighten restrictions on business and social life in some regions after a surge in cases, and Poland reported that its new infections have doubled since it eased its regulations. Germany will announce a modest relaxation of its Covid rules later this week. The final PMIs for the Eurozone showed that overall activity continued to decline in February, albeit at a slower pace.

3. Stocks should ricochet; Dollar Tree, Marvell Profit Due; ISM service survey eyeing

US stock markets will reopen significantly higher in response to the better prospects for an economic reopening after renewed turmoil led to a strong sale of technology stocks, especially on Tuesday.

At 6:30 a.m. CET (1130 GMT) they rose 215 points, or 0.7%, while they rose 0.6% and 0.7%, respectively.

With earnings season ending – Brown Forman (NYSE :), Marvell (NASDAQ :), and Dollar Tree (NASDAQ 🙂 the only reports released ahead of schedule – attention should be drawn to ADP’s February personal payroll report which is due at 8:00 p.m. ET. The ISM survey on non-production will follow at 10 a.m.

4. The ECB eased over rising bond yields

The European Central Bank reportedly has concerns about reacting to the recent surge in bond yields, according to Bloomberg.

The news agency told sources close to the bank that it did not need to rush its bond purchase as the recent sell-off reflected a legitimate improvement in sentiment about the economic outlook. Just last week, President Christine Lagarde announced that the ECB would closely monitor nominal bond yields. This message was seen by many as unwilling to tighten financial conditions under any circumstances.

Central banks were concerned about bond sell-offs to varying degrees over the past week. Federal Reserve Governor Lael Brainard said Tuesday she found it “suspicious” but reiterated that it would be “some time” for the Fed to change its stance on bond purchases. The Reserve Bank of Australia intervened heavily last week to halt the rise in three- and ten-year bond yields.

5. Oil floats ahead of the OPEC + meeting; The rise in stocks shrugged

Crude oil prices rebounded overnight after a series of bullish comments from key officials on the state of the world market ahead of the key OPEC + meeting on Thursday, when Saudi Arabia, Russia and others will set production quotas for April.

Analysts warn that headlines about unchanged production at OPEC level could mask an actual surge in supply from Saudi Arabia, which unilaterally cut its production by 1 million barrels a day in February and March.

At 6:45 a.m. ET, futures rose 1.8% to $ 60.84 a barrel while futures rose 1.8% to $ 63.84 a barrel, shaking off a shock surge in US inventories like that American Petroleum Institute reported Tuesday.

The government data is due as usual at 10:30 a.m.CET.

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