Market Commentary - April 9, 2021

Posted by Kevin Jock on Apr 9, 2021 6:01:47 AM

    U.S. outlook has greatly improved in the past months with fears of overshooting inflation having subsided following two consecutive weeks of weaker unemployment claims figures and a Federal Reserve Chairman that has continuously reassured a commitment to dovish endeavours. Speaking in a virtual panel on Thursday, Jerome Powell described scenes of a substantial homeless encampment in downtown Washington, that despite improving headline economic figures, many American’s are still unemployed. Wall Street emerged a winner as benchmarks unanimously advanced, particularly the S&P500 recording fresh all-time highs.

    European markets remain relatively docile as current events between Fed’s dovishness, slow vaccinations, global minimum tax offset each other. Meanwhile, the FTSE100 posted a 56-point gain, settling beyond a major resistance level.

    Australia’s S&P200 fell on open as the government announced a halt to AstraZeneca’s vaccine for under 50’s following enough evidence proving a linkage between the shot and blood clots. Likewise, the Hang Seng down 1.1% after China’s CPI data overshot market consensus. Prospects of overheating would entail Beijing’s wrath in tightening both fiscal and monetary measures. The Japanese Nikkei bucked the trend, gaining intraday.

    Crude oil edged higher to just below $60 after Saudi Arabia stressed though OPEC plans to increase production over the next three months to July, the group remains nimble should economic forecast deviate. With treasury yields stabilizing, the dollar lost ground against majors. Gold breaks above to settle at $1,755 after a technical double bottom and bitcoin back above $58,000 after following State Street cements a deal to lend its tech to a cryptocurrency trading venue.

XAUUSD-Apr-09-2021-04-59-26-47-AM

Figure 1 (Source: IS Prime) XAUUSD Daily : Gold breaks above after forming a technical double bottom.

Headliner to Review
  • The AIG Service Industry Performance Index has repeatedly hit new highs since June 2018, rising from 55.8 in February to 58.7. During the period, sales, new orders, inventory and deliveries continued to recover strongly. The employment rate was also stable.
  • The New Zealand Business Confidence Index in April fell from a high in more than two years for the third consecutive month, from the previous value - 4.1, and then dropping to - 8.4, the weakest since October last year (-15.7).
  • The number of people claiming unemployment benefits for the first time in the United States unexpectedly rose for two consecutive weeks, but only continued to rise by 16,000 each week (the previous value was increased by 70,000), to a total of 744,000 previously. The total value was increased to 728,000. The market expected to fall back to a total of 680,000.
  • The monthly increase of the producer price index (PPI) in the Eurozone in February this year slowed to 0.5% (previous value rose 1.7%), which was not as good as the market’s expectations of a 0.6% rise. It has risen for nine consecutive months.

Headliner to Watch

  • Joblessness in Canada expected to improve with the unemployment rate to decline from 8.2% to 8% and another 101.5K Canadians to find jobs.

Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice.

Authors:
Antony Tan
Ben Li
Kevin Jock

Topics: Market Commentary

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