Squawk Box Europe Express

U.S. markets are on tenterhooks with all eyes on the Federal Reserve, as investors wait to see whether Fed Chair Jerome Powell will react to rising bond yields and increasing inflation speculation at the close of the two day FOMC meetings today. Back on the continent, it's the third and final day of voting in an election that could see Prime Minister Mark Rutte win a fourth consecutive term - having resigned in January over a child benefits scandal. The country’s relationship with the EU has been among the central issues for voters. Meanwhile, the European Union's medicines agency attempts to reassure the public over the safety of the Oxford-AstraZeneca coronavirus vaccine, after some member states paused its rollout with concerns over possible side effects. And a landmark moment for the gig economy as Uber's more than 70-thousand U.K. drivers get workers' rights from today -- earning the national living wage, and benefits like holiday and sick pay, after a ruling by the Supreme Court last month.

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The Dow and S&P 500 hit new highs, as investors bank on the economy reopening. Investors will keep an eye out on the Fed which prepares to meet later today. In Europe, vaccine efforts could face delays after Germany, France, Italy and Spain all pause their Astrazeneca jab rollouts over blood clot fears. The European Medicines Agency's safety committee is due to meet today on the matter, as the WHO calls for calm. Meanwhile Down Under, Facebook strikes a deal with Rupert Murdoch's News Corp to pay for content in Australia, after the social media giant briefly cut off access to news in the country. And, Volkswagen announces six battery factories across Europe by 2030.

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President Biden signs the $1.9tn stimulus bill and in a prime time TV address he unveils the roadmap out of lockdown, urging eligible Americans to take the vaccine where possible. U.S. equities react positively with both the Dow and S&P 500 hitting new highs. Shares in South Korean web retail giant Coupang rally up to 40 per cent after the company lists on the NYSE - Wall Street’s largest listing so far this year. Coupang now has a market cap of $84bn. In further IPO news out of Asia, China’s Baidu is eyeing a secondary flotation in Hong Kong while Singaporean ride-hailing and delivery app Grab is set to go public through a SPAC. Meanwhile, there is renewed tension between Brussels and AstraZeneca as the company will reportedly miss already reduced delivery targets to the bloc.

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The U.S. Congress passes the $1.9tn virus stimulus bill and sends it onto President Biden to sign into law. The Dow hits a record high, while U.S. Treasury yields pare down after moderate take-up in the latest 10-year auction. Across the Atlantic, ECB policy makers react with caution over rising sovereign bond yields ahead of today’s central bank meeting. GE is to sell its jet-leasing business to Ireland’s AerCap. The $30bn deal will create the sector’s largest lessor by market share. And South Korea’s answer to Amazon, Coupang, raises $4.2bn ahead of its NYSE listing – the biggest IPO in the U.S. this year so far.

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The Nasdaq marks its best session since November, just one day after slipping into correction territory, as bond yields ease. Latest data from China fuels inflation concerns, with factory prices rising at their fastest pace in two-and-a-half years. GFG Alliance holds last-ditch talks with Greensill Capital as the supply chain finance group files for insolvency, amid reports Softbank pumped $400m into the lender just months ahead of its collapse. And the EU and UK are once again at loggerheads over vaccine distribution, with Brussels accusing London of blocking exports, which Downing Street angrily denies.  

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The Dow rallies to a record high but the U.S. tech rotation to cyclicals continues with the Nasdaq suffering a fall into correction territory. However, Ark Invest founder Cathie Wood tells CNBC she is optimistic the bull market is broadening and has space to run. Following the Senate’s approval of President Biden’s $1.9tn stimulus bill, so-called ‘meme stocks’ are rallying on expectations that some retail investors may pump their stimulus cheques to continue fuelling the market short squeeze. In Europe, troubled lender Greensill Capital has filed for bankruptcy, citing “severe financial distress”. The collapse of Greensill means that up to 5,000 steel jobs at Liberty UK could now be at risk.

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China says relations with the U.S. should move on from “zero-sum finger-pointing” as Beijing calls for the removal of “unreasonable curbs on co-operation”. Early U.S. futures are mixed despite President Biden’s $1.9tn stimulus plan passing the Senate before it heads back to the House. Brent crude tops $70 a barrel for the first time since the outbreak of the pandemic, while WTI hits a 2-year high after Saudi oil facilities suffer a drone attack claimed by Iranian-backed Houthi fighters in Yemen. And the U.S. and EU agree to a tariff truce over a 17 year subsidy wrangle between Boeing and Airbus.

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The Nasdaq turns negative for 2021 as tech stocks continue to weigh on the back of Federal Reserve Chairman Jerome Powell’s failure to address the recent surge in bond yields and investors’ inflation jitters. OPEC+ leaders have agreed to maintain supply cuts until April amid ongoing demand uncertainty, nudging prices upwards. China cools down recovery expectations, outlining a growth target of more than 6 per cent this year as the annual NPC convenes. And Italy blocks exports of AstraZeneca doses to Australia as the EU attempts to scale up its stuttering vaccine rollout.  

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Tech stocks continue to weigh on Wall Street with sharp sell-offs in Asia mirroring the declines. Spikes in bond yields are once-again blamed. We speak with Bundesbank President Jens Weidmann who says he is ready to react to the moves. No big surprises in the UK Budget as Chancellor Rishi Sunak pledges billions of pounds to support workers and businesses post-pandemic. Plans to shore up the ballooning deficit include significant corporate tax hikes by 2023. In Germany, financial regulator Bafin has reportedly begun legal proceedings against Greensill Bank over alleged balance sheet manipulations. And oil prices rise ahead of tomorrow’s OPEC+ meeting where output cuts are likely to be maintained.  

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UK Chancellor of the Exchequer Rishi Sunak is set to unveil his 2021 Budget, which is expected to include an extension to the worker furlough scheme but also corporate tax hikes in a bid “to do whatever it takes” to bolster the British economy. Wall Street dips into the red with tech shares weighing on the Nasdaq in particular. President Biden announces the U.S. will have enough vaccine doses to inoculate every American by May. This, as drug maker rivals Johnson & Johnson and Merck join forces to accelerate the country’s rollout. Social distancing restrictions around China are felt in weak demand for services with the sector growing at its slowest pace in 10 months.

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