Market comment | Equity stabilized but bonds remain well demanded

Equity markets recovered after yesterday’s Fed insurance cut failed to reassure financial markets. Markets stabilized, amid the advance of Biden in the U.S. Democratic primary. Despite the rebound in equity markets, sovereign bonds remain well demanded, suggesting investors’ risk appetite is still low.

Key points

• Key points:
• Markets still expect Fed to cut interest rates further, as 10Y yield dives below 1%.
• The Eurogroup pledged country-specific fiscal measures to support growth.
• Strong U.S. services confidence in February, in light of Covid-19 impact.
• The U.S. dollar recovered some ground, despite expectations of further interest rate cuts.

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