The Market Week – April – Week 4
The focus of attention this week is the FED meeting, the big market cap. companies reporting Q1 Earnings and US GDP data. President Biden has a major “100-days in office” speech, with more details of his tax and spending plans. The virus remains a significant concern in key countries and continues to weigh on sentiment, as vaccine rollouts continue.
Unemployment remains stubbornly high globally, however, last week’s US unemployment claims beat expectations again and a new downward trend is in play. This week consensus is for a slight rebound of the 545,000 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. Brazil and particularly India remain very significant infection hotspots.
This week FX volatility continued as the USD moved to new 8-week lows before a slight reprieve. The USDIndex fell to 90.64 and is now struggling at 91.00. EURUSD moved to test over 1.2100 and holds over 1.2050. USDJPY moved as low as 107.40 before retracing to test 109.00 and Cable rejected the first move to 1.4000 and holds at 1.3900.
Global stock markets continued the rotation from high growth technology stocks to financials, energies and industrials as Q1 Earnings Season got into full swing and major companies reported robust numbers. Yet again this week, US markets posted all-time highs. Apple, Facebook, and Amazon are all due to report this week.
The Gold price rejected the 200-day moving average at $1790 this week and moved lower but remained above the key 20-day moving average at $1760. Palladium hit all-time highs and Copper continues its major three-week rally; Goldman Sachs expects 13% price gains in the next six months.
Bitcoin had a volatile week, moving below $47,000 before recovering to $54,000 as Ethereum hit a new all-time high on news of the European Investment Bank’s plans to launch a “digital bond” sale on the Ethereum blockchain network.
USOil prices hold over $61.00 a barrel but down from highs over $64.00 last week; the OPEC+ meeting this week was delayed but both Citi and Goldman Sachs have increased 2021 price targets significantly.
The yield on the US 10-Year Treasury Note holds above the psychological 1.50% level and is back over the key of 1.60%, trading as high as 1.65% this week.
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Stuart Cowell
Head Market Analyst
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