Market Commentary - April 14,2021

Posted by Kevin Jock on Apr 14, 2021 8:14:55 AM

    Wall Street shrugged off better than expected inflation figures as another vaccine manufacturer falls victim to recent inoculation concerns. This time arising from Johnson & Johnson’s vaccine as U.S. health authorities find a solid link to blood clotting in extreme circumstances. Nasdaq which prospered under the stay-at-home regime, outperformed shooting up 1.1%. S&P500 followed suit, up 0.3% whilst the Dow Jones ended the session in negative territory.

    Despite Johnson & Johnson delaying their planned rollout of its COVID-19 vaccine across Europe, benchmarks rose higher, particularly the French CAC breaking into new ground. Soaring yields of recent that eroded returns have since stabilised allowing inflationary risk to a take backseat.

    Australia and Hong Kong rallied on opened but Japan slipped as prefectures including Tokyo, Kyoto and Okinawa imposed tougher social distancing measures amid a fresh outbreak. Production delays and European Union export controls have crimped the country’s roll-out schedule.

    On the crypto front, bitcoin now has now surpassed $64,000 after gaining $4,000 since yesterday. Investor risk-appetite remains high as Nasdaq sets a reference price of $250 for the direct listing of Coinbase, where trading will start on Wednesday. Unlike most exchanges, Coinbase enforced strict regulatory compliance, allowing the firm to proper within the U.S.

    Overall risk-on sentiment saw the U.S. dollar lose ground, crude oil higher to just under $65 and gold appreciates $12 to $1,745. The Singaporean dollar gained 30 pips after the central bank left policy rates unchanged with overall outlook improving, citing better than expected economic growth indicators. Likewise, the RNBZ stood firm leaving rates at 0.25% and leaving the current level of QE unchanged. The central banked noted they would need time to observe how the newly introduced housing rules would impact economic forecast in their models.

USDSGD-1

Figure 1 (Source: IS Prime) USDSGD Daily : Singaporean dollar breaks below previous support level on improving outlook from the MAS.

Headliner to Review
  • American price pressures came in higher than expected with CPI and Core CPI at 0.6% and 0.3% whilst consensus was at 0.5% and 0.2%, largely resulting from an increase in gasoline prices.
  • As expected RNBZ leaves cash rate at 0.25% and maintains their $100bn NZD quantitative easing program.
  • Singapore’s MAS stood pat on monetary policy as expectations see future annual growth to range between 4%-6%.
  • The U.K economy grew by 0.4%, slightly lower than anticipated, largely a result of lockdown impacting GDP.

Headliner to Watch

  • Miscellaneous speeches:
    • Federal Reserve Chairman Jerome Powell due to speak at the Economic Club of Washington via satellite
    • ECB President Christine Lagarde to speak at an online event hosted by Reuters
  • Crude oil inventories to remain in deficit at -2.4M, reinforcing OPEC’s decision to gradually increase production to meet recovery demand.
  • Labour market in Australia set to improve with 35.2K people expected to find work alongside a jobless rate edging lower to 5.7% from 5.8%.

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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