Wall st rallies on tech lead, ECB turns hawkish, kind of

Tech stocks led US equities higher overnight, the Nasdaq rallied 1.3% making it three up sessions on the trot, led by tech heavyweights Amazon (AMZN) and a blockbuster session from Tesla (TSLA) which finished up almost 10% after a positive earnings report.

Weak US figures saw a drop in Treasury yields as rate hike expectations took a dovish dive, pressuring the greenback and pushing the US Dollar index under the 107 handle, another headwind for DXY was the ECB’s hawkish rate hike.

While most market analysts expected the ECB to go through with their long telegraphed 25bp hike, there was some pricing in of a 50, resulting in in a fairly muted rally in EUR, which quickly retraced as the accompanying forward guidance was changed to a “meeting-by-meeting” approach. This is a more dovish tone as compared with the aggressive forward guidance from the June meeting.

The big mover in the commodity space was crude oil, tumbling around 3% as demand fears eased somewhat and an improving supply outlook, sending WTI oil back under the $100 a barrel level.

Looking forward, corporate earning out of the US will be the big driver in US equities, while PMI figures out of Europe, the UK and the US later today should see some FX moves in their respective currencies.