Sentiment cooled further overnight, inflationary concerns persisting. The S&P500 is currently down 0.9%, the US dollar is little changed, and bond yields are slightly higher.

Sentiment cooled overnight amid concerns that the recent surge in commodity prices may add to inflationary pressures. The S&P500 is currently down 0.8%, the US dollar is little changed, and bond yields are slightly higher.

Sentiment was boosted by a very disappointing US jobs report, which caused markets to extend their expectations of monetary and fiscal accommodation. The S&P500 rose 0.7% to a record high), and the US dollar fell sharply against all the majors. Term bond yields fell only briefly, supported by rising inflation expectations.

Sentiment remained upbeat ahead of tonight’s closely-watched US jobs report. The S&P500 is currently up 0.8% (the DJIA made a record high), the defensive US dollar is lower, and most commodities are higher, while bond yields are slightly lower.

Sentiment improved amid more upbeat US economic data. The S&P500 is currently up 0.1% (having pared gains after news of a removal of patent protection for Covid vaccines), and the AUD and NZD are stronger, while bond yields are slightly lower after Fed officials downplayed inflation risks.

Sentiment soured, led by technology stocks, without any obvious news catalysts. US Treasury Secretary Yellen added to the mood by saying rates may need to rise to prevent overheating. The S&P500 is currently down 1.0%, the US dollar is stronger, and bond yields are slightly lower.

Sentiment was helped by some dovish Fedspeak from Powell and Williams. The S&P500 is currently up 0.5%, the US dollar is weaker, and commodities are higher; while bond yields are slightly lower, disappointing US manufacturing data weighing.

Sentiment soured as strong US economic data hinted at inflationary pressures and a Fed hawk spoke. The S&P500 closed down 0.8%, the US dollar rose, and bond yields fell slightly.

Sentiment remained elevated amid prospects for more US fiscal stimulus and a solid US GDP result. The S&P500 is currently up 0.7% and at a fresh record high. Bond yields are slightly higher, while currencies were mixed.

Fed Chair Powell’s press conference comments lacked the hawkish tones that some in the market had hoped for. In response, the US dollar and bond yields fell, while equities and risk-sensitive currencies rose. The S&P500 is currently up 0.2% and at a fresh record high.