Today’s Trading Playbook
KEY THEMES
U.S. equities continued their rally, flying into fresh highs, with Nasdaq up 4% yesterday. This comes a day after declines which many thought was the start of a correction. The main fuel for the current rally appear to be the USD1.9tn incentive package. One of the incentive package aftermath was investor's expectations of mounting inflation, which filtered into higher Treasury yields. The scene of higher yields definitely spooked investors, so when yields started to calm down on Tuesday, this helped solidify equities’ gains. Higher appetite for risk assets is generally good for emerging markets. However, this is only good as long as (1) the rally does not run out of steam before a sell-off takes place and (2) dodging the negative impact of geopolitical tensions on investors' sentiment.
Now, on to the top news and analysis for the day.