The Market Week – April – Week 3
The focus of attention this week returned to the Bond market and Q1 Earnings, as the big banks beat expectations but Netflix subscriber numbers disappointed and Coinbase slipped from opening day highs. The virus remains a significant concern in key countries and weighs on sentiment.
Still to come this week, the ECB & BOC have interest rate announcements and there is more inflation and important PMI data to close the week.
Unemployment remains stubbornly high globally, however, last week’s unemployment claims finally breached below 700,000, beating expectations significantly at 576,000. This week consensus is for a slight rebound of the 600,000 level.
The vaccine rollouts continue to drive sentiment, but the virus variants remain significant. The US and UK lead the high-income countries rollouts, but the EU and Japan are still far behind and lockdowns remain in force. India and Brazil remain key infection hotspots and 3rd phase trials of the Chinese vaccine show only 50% efficacy.
This week FX volatility continued as the USD moved to 7-week lows before a slight reprieve. The USDIndex fell to 90.82 and is struggling at 91.00. EURUSD broke and held over the key 1.2000 level. USDJPY moved lower, testing under 108.00, and Cable moved up to test the key 1.4000 zone.
Global stock markets continued the rotation from high growth technology stocks to financials, energies and industrials as Q1 Earnings Season got into full swing. Yet again this week, US markets posted all-time highs before moving lower. The USA100 trades below 14,000, the USA30 is back below 34,000 and the USA500 has retreated under 4,150 from 4,190.
The Gold price rallied this week as the USD and Yields continued to weaken. The 20-day moving average ($1735) has proved key support this month, and next resistance is the 200-day moving average at $1790.
Bitcoin broke lower this week after reports over the weekend of stricter regulations in the US and a major power outage in the major crypto mining region of China. The price retreated from last week’s highs over $64,000 to lows at $53,500.
USOil prices hold over $60.00 a barrel but down from highs over $64.00 as the concerns over the ongoing virus surges outweighed the improving economic data and outlook, vaccine rollouts and predictions of greater Oil demand in the second half of the year.
The yield on the US 10-Year Treasury Note holds above the psychological 1.50% level but has retraced to test 1.56% after a break of the support at 1.60%. This week’s auction saw better than expected demand for the key treasury note as it settled at 1.68%.
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Stuart Cowell
Head Market Analyst
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