Respite on Wednesday was temporarily as Nasdaq resumed declines yesterday. Dovish reassurances from the Fed Chair Jerome Powell during FOMC failed to stifle growing caution on China’s regulatory crackdown, the spread of delta variant and mixed corporate earnings. Though the S&P500 held its ground alongside Dow Jones surprisingly gaining 0.3% amid weaker than expected macro data in GDP and unemployment claims. Bad news is good news as it delays the central from tighten monetary policy. Elsewhere, benchmarks in Europe rose as investors drew comfort on sentiment data from the European Commission, illustrating record levels unseen since 1985.
In Asia, the Hang Seng suffered similar price action, down 1.5% thus far intra-day. On Wednesday night, the China Securities Regulatory Commission held a conference call with global and Chinese executives, seeking to ease risk-off sentiment after Beijing imposed tough restrictions on private education companies. Despite regulators showing they’re not tone-deaf to international concern, ultimately as decision-making arises in the upper echelons of the Communist Party, its clear further tougher policies will follow.
Australia’s S&P200 opened weaker with Sydney extending a month-long lockdown for at least another four weeks after failing to contain an outbreak in delta. Daily cases in the city alone continues to post triple digits. Likewise, with the Tokyo Olympics well underway, the Nikkei tumbles 1.7% as Japanese officials sound alarm over the city’s record-breaking coronavirus cases for 3 consecutive days.
Crude oil rose above $73.50 following an industry funded report from American Petroleum Institute revealing declining U.S. inventories implying economic reopening will weather COVID-19 flareups. The U.S. dollar loses ground among majors after FOMC, whilst gold surges $20 to $1,827. And Bitcoin fluctuates around the $40,000 level.
Ahead of the FOMC meeting scheduled Wednesday, Wall Street edged higher across the board alongside continuing strong corporate earning releases. Both the S&P500 and Dow Jones gained 0.2% whilst Nasdaq managed to eke out 0.1%. Since alluding that discussions surrounding tapering is on the table, markets have surprisingly shrugged off hawkish sentiment from Federal Reserve members. Though unease may be on the horizon, as rhetoric on the timing, pace, and composition of tapering divide opinions within the central bank.
In Europe, China contagion saw broad-based benchmarks initially gap lower on open. A late session rally resulted in a mix bag with the CAC40 and ES35 ending above ground whilst the DAX30, STOXX50 and FTSE100 settled in negative territory.
As regulators in China tighten their iron grip on Chinese behemoths, with education companies most recently in their crosshairs, both the Nikkei and Hang Seng extended declines from Monday. The former down 0.7%, the latter selling sharply as much as 5.7% intra-day. Beijing’s rein on private enterprises lately come amid concern over exacerbating inequality, systematic financial risk and challenges to their authority. Meanwhile the S&P200, remained flat as the state of NSW is likely to extend Sydney’s month-long lockdown by another four weeks with daily cases recording 174 on Monday.
After briefly pushing past $40,000 early in the week, bitcoin retreated down to the $37,000 level as Amazon swatted away the possibility of accepting token payments this year. The cryptocurrency had originally surged following a job-listing by the tech giant for a “Digital Currency and Blockchain Product Lead”.
Crude oil held stead just above $72 as investors digest implications between OPEC’s agreement last week and the delta variant impacting global demand recovery. The U.S. dollar index remain to fluctuate within a tight range and gold slides below $1,800.
Wall Street slid over growing warnings signs that global economic growth may have peaked following China’s weaker than expected quarter GDP release. The rapid spread of the Delta variant further threw a wrench in the works. Nasdaq underperformed and S&P500 down 0.7% and 0.3% respectively. European benchmarks suffered a similar fate amid a sea of red. STOXX600, CAC40 and DAX30 posting 1% declines. Meanwhile the FTSE100 slipped 1.1% after two members of the Bank of England speculated quantitative easing may have to be tapered as soon as next month tailing overall global sentiment among central banks. Largely resulting in transitory inflation being more persistent than previously anticipated.
Despite President Biden, issuing a serious caution of U.S. companies still doing business in Hong Kong, the Hang Seng rose 1%. The administration fears majors’ banks and multinationals do not fully comprehend China’s influence on the islands changing landscape and the ensuing risk. Elsewhere, Beijing announced plans to exempt companies going public in Hong Kong from cybersecurity regulatory approval. The BOJ reiterated their stance to remain accommodative as the nation continues to survive through various states of emergency. Price action on the Nikkei remains mute.
Confidence in the Singaporean dollar is being tested following a growing COVID-19 cluster from a karaoke club infects another 42, adding to the 56 from the previous day. The highest daily infection rate in more than a year, just weeks before the country is expected to reach their next vaccination hurdle and easing of restrictions. USDSGD hit a 9-month high to settle above 1.3500. The U.S. dollar rose against majors, gold settled above $1,829 and crude fell below $72.
Bitcoin retreated as low as $31,472 yesterday after renewed interest from central banks for a digitally backed money. Fed Chair Jerome Powell weighed suggesting a central bank digital currency would undercut the need for private alternatives such as bitcoin. Meanwhile ECB President Christine Lagarde has approved an investigation phase in developing such as asset.
Exceptionally stronger than expected CPI data whipsawed Nasdaq to end the session unchanged whilst both the S&P500 and Dow Jones slipped 0.4% and 0.3% respectively. Despite the high inflation reading, muted price actioned seems to reflect investor sentiment has moved on. Focusing on prospective growth in light of the spread of the Delta variant and a possible slowdown in China’s rebound ahead of GDP data scheduled to release Thursday. Just last week, the PBOC had cut reserve requirement ratios spurring speculation as to why the central bank had started to ease monetary policy again.
In Europe, benchmarks eased off recent highs with the STOXX down only 0.1%. Asia opened mixed but continued the overnight theme of muted volatility. The S&P200 rose 0.2%, Hang Seng gapped down 0.1% and Nikkei up slightly at 0.1%.
Continuing civil in South Africa saw the Rand depreciate 2.1% on Tuesday. Following the jailing of Former President Jacob Zuma last week after he refused to attend an inquiry over corruption during his nine-year tenure, his supporters rampaged through the streets, ransacking and looting. Initial police response had been lethargic such that the military had to be subsequently called in after 19 deaths. Meanwhile, the U.S dollar index produced one of their best single day gains for a month. Gold stalled at $1,807 and bitcoin fell lower to settled at $32,000.
Crude oil rallied above $75 after the International Energy Agency commented yesterday that without an OPEC deal to raise production, the oil market will “significantly” tighten “as demand rebounds from last year’s COVID-induced plunge…with OECD industry stocks now well below historical averages”. The agency further noted that demand is forecasted to grow fast during the 3rd quarter of 2021 on the presumption a rapid reopening of global economies.
Solid second quarter earnings underpinned Wall Street’s rally yesterday despite a looming U.S. inflation report release, expected to stay elevated and Federal Reserve Chair Jerome Powell’s testimony this week. Set to outline initial discussions among members regarding quantitative easing tapering. The S&P500 closed 0.4% higher whilst the Nasdaq notched another all-time high, up 0.2% by sessions end.
In Europe, broad-based benchmarks managed to post positive returns in light of the rapid spread of the delta virus as majority of new daily cases comprise largely of the variant. The situation further compounded by ECB President Christine Lagarde whom speaking with the Financial Times remarked “I’m not under the illusion that every six weeks we will have unanimous…acceptance because there will be…some slightly different position”. Alluding to a split in opinions among ECB members in relation to the new inflation target of 2% and the new guidance tolerating transitory price pressures above that level.
Mixed performance thus far in Asia, the S&P200 retreated following Sydney extending lockdown restrictions, whilst the state of NSW records another 89 new cases. The Hang Seng, outperformed rallying 1% and Nikkei remained unchanged.
Crude oil snapped a 2-day rally to settle just above $74. Combination of the delta variant spreading global alongside OPEC ending last weeks supply talk without an agreement for August has added to overall market uncertainty. Both Saudi Arabia and United Arab Emirates have started locking in customer orders for the preceding month suggesting little chance of a breakthrough.
The US dollar remained steadied on Monday, gold at $1,806 and bitcoin fluctuates around $33,000.
Sea of red on Thursday over rising concerns about prospects for the global economy following worrying signs the Delta variant could hamper recovery efforts. Especially as low vaccinations are still prevalent in some parts of the world and central banks considering tapering monetary policy support. The severity of the variant strain became clearer after Pfizer requested the U.S. to authorize a 3rd booster shot after a study in Israel saw the vaccines efficacy decline from 93% to 64% in 6 months. The S&P500 closed 0.9% lower, Dow Jones retreating 0.8% and Nasdaq down 0.7%. Tensions between the US and China also flared after the White House added another 10 Chinese entities to their economic blacklist over human rights and high surveillance violations.
Despite the ECB’s formalising wording surround the central banks 2% inflation target allowing for temporary price pressures to exceed the ceiling, European benchmarks still faltered ending the session the negative territory. CAC40 and STOXX50 tumbled 2% and 2.2% respectively. The UK economy is re-opening from restrictions but still the FTSE100 slipped 1.7%. Renewed Brexit spat between Brussels and London also grabbed headlines as the EU obliged Britain to fork out £40.8bn whilst Downing Street refuted the figure to be between £35bn – £39bn. In Asia, the Nikkei and Hang Seng tempered overnight risk-off sentiment with “buy-the-dip” mentality though the S&P200 followed through, down 0.7% thus far.
Crude snapped a 2-day decline to rebound 1.5% above $73 on increase inventory deficit. Nonetheless, oil is set to post their worst week since April after a breakdown in alliance between OPEC members and United Arab Emirates on top of the delta strain clouding overall outlook. Softer optimism drove demand in the greenback against majors and bitcoin settles around the $33,000 level.
Another spate of state of emergency in Japan saw a reluctance in risk appetite in the Nikkei as the benchmark fell 0.6% intra-day. The renewed measures will take effect from next week until August 22nd, overlapping Tokyo’s already dire Olympic games. On Wednesday, the country reported 920 new cases of coronavirus where the delta variant contributed 14%. Likewise, the S&P200 slipped 0.1% as various suburbs in Sydney had their lockdown restrictions extended following 38 new local cases. The Hang Seng set to record their 8th consecutive decline with technology underperforming from peripheral risk arisen from Didi’s IPO debacle alongside China’s tech crackdown.
FOMC meeting minutes spurred Wall Street higher across the board as Federal Reserve members withheld a timeline in tapering off quantitative easing concerned of an uncertain economic outlook. Especially as supply bottlenecks leading to labour market imbalances and persistently high transitory inflation remain visible. Both Nasdaq and S&P500 records another all-time high, whilst the Dow Jones rose 0.6%. In Europe, the STOXX and DAX rose 0.8% and 1.5% respectively, regaining the previous days lost ground. In contrast, Spain underperformed ending the session down as the country battles with the highest COVID-19 rate within the bloc.
Gold rallied above $1,800 following Fed minute remarks and so too did the US dollar index, gaining across the board. Crude oil nose dived another 2.3$ ahead of OPEC-JMMC meeting today. With talks broken down, fears that rogue nations will increase production in a game of prison dilemma is rising. Elsewhere bitcoin fluctuates above $33,000.
Ahead of the FOMC meeting minute release today, Wall Street cyclicals snapped their winning streaks as both the S&P500 and Dow Jones retreated in bear territory whilst Nasdaq bucks the trend to end 0.4% higher as Amazon led the charge. Investors are bracing for potential hawkish sentiment among central bank members. Likewise, European benchmarks followed suit, point downing for the session. The French CAC lost 0.9%, STOXX lower by 0.5% and the DAX slipping 1%.
In Asia, the Japanese Nikkei seesaws between the opening price despite an anticipated announcement from Japanese Prime Minister Suga, set to unveil a stimulus package mounting to atleast $180 bn ahead of the 2021 Japanese general election in October. The prevailing party suffered over the weekend as Tokyo elections saw the coalition lose a majority of its seat. As of recent, Suga has been criticised over his administrations failings in handling the virus and a vaccine rollout schedule mired with delays. Meanwhile, the S&P200 regained all of yesterday’s losses whilst the Hang Seng remained unchanged.
Crude oil slumps 3.5% on Tuesday to below $74 as investors continue to digest the ramifications of the dispute between Saudi Arabia and the United Arab Emirates. With negotiations deteriorated, the failed expected monthly incremental supply increase of 400,000 barrels a day has seen oil hit 6-year highs. However, as infighting prolongs, a lack of unity among OPEC members would entice peripheral nations, dependent upon oil revenues, to take it upon themselves to supply the market independently.
The US dollar index rose in line with overall markets’ hawkish sentiment with gold posting their 5th consecutive advance to settle above $1,765. Elsewhere, bitcoin oscillates between 34,000 – 35,000.
Wall Street surged to end the week off on a high after a perfect balance in labour market data illustrated a economy well underway in its recovery but not beyond a pace that would raise concern from the Federal Reserve. With non-farm employment change beating expectations offset by a higher unemployment rate, temptations that the central bank may rein in on quantitative easing have subsided. Both the S&P500 and Nasdaq gained 0.8% and the Dow Jones higher by 0.2%.
Whilst talks of hawkish monetary endeavors are rife in US markets, the ECB exudes a different tone in maintaining their dovish stances, reflecting the different pace in recovery. Friday saw mixed results, the DAX outperformed eking out 0.2% though the remaining benchmarks ended the session lower.
In Asia, sentiment on the Hang Seng was dampened after China opened a cybersecurity probe on the newly IPO ride hailing giant Didi. Authorities have accused the company of “seriously violating laws on collecting and using personal information” and ordered their app to be taken off domestic app stores. The Hang Seng fall to an 1.1% intraday low, with the Nikkei following suit, down 0.5%, mired with COVID-19 and a catastrophic Olympic event of their own. Elsewhere, the S&P200 gapped higher on open on expectations beating retail sales but have since retraced.
OPEC remains in the spotlight as negotiations continue to stall on Friday on raising oil production for the remainder of 2021. The deadlock entirely brought upon by the United Arab Emirates, whom are demanding better productions terms for themselves The group will reconvene on Monday via videoconference in hopes to hash out a deal on the propose 400,000 barrels increase each month between August and December else they risk unravelling the cartel. Surprisingly despite this, crude oil held steady, closing just above $75.
Higher unemployment rate drove demand out of the U.S. dollar against counterparts. Gold rallied back above $1,785 and bitcoin fluctuates between 34,000 – 35,000.
Wall Street cyclicals rose after solid US manufacturing figures alongside better than expected unemployment claims were released. The S&P500 up by 0.5% followed by Dow Jones higher by. Nasdaq underperformed ending the session negative territory with concerns that should the Federal Reserve start trimming bond purchases, leading to yield sensitive tech stocks being hardest hit. Meanwhile, Biden’s administrations push towards a global tax system nears a historic deal albeit with opposition from EU members Ireland, Hungary and Estonia.
European benchmarks rose on Thursday, uplifted by energy companies benefiting from rising oil prices and improving sentiment by ever-increasing manufacturing PMI data. The STOXX rose 0.6%, though the FTSE outperformed at 1.25% following dovish remarks by BOE Governor Bailey on monetary policy who stood confident that inflationary pressure currently seen would prove temporary in nature. In Asia, the Hang Seng tumbled 1.6% dragged lower by tech after re-opening from a public holiday. In contrast the S&P200 rallied 0.3% and the Nikkei eked out 0.1%.
Crude oil rose as high as 3.6% intraday before settling just above $75 after squabbling among OPEC-JMMC members on Thursday. Before negotiations broke down, the cartel had anticipated to boost output by 400,000 bbls a day each month from August through to December. Last minute opposition from the United Arab Emirates now put the intended agreement in dangerous. The nation is arguing for own production baseline to be increased allowing the producer to pump hundreds of thousands of extra barrels a day. Should a deal not be reached today, current production arrangements would remain in place until 2022.
US dollar index rose on quantitative easing trimming prospects. Gold recorded it worst month since 2016 after the Federal Reserve surprised investors by bringing their first rate rise forward despite transitory inflation rhetoric. Bitcoin back down to 33,000 as hype over the cryptocurrency dies down.
Risk-on sentiment emboldens Wall Street to elevated valuations whilst the delta virus variant has tempered optimism elsewhere around the globe. Both the S&P500 and Dow Jones rallied 0.2% and 0.7% respectively, what the former notches its 5th consecutive record high. This despite, rising geo-political tensions on the peripherals as the U.S. and Japan conduct joint military exercise in the face of China’s conflict with Taiwan. In a speech, marking the Communist Party’s 100-year anniversary President Xi had called for unification with Taiwan a “historic mission” and warns foreign forces will have their heads broken “on the steel Great Wall”.
In Asia, COVID-19 resurgence continues to plague Japan. The Nikkei fell 0.4% as the government edges closer to extending two weeks to a month of restrictions ahead of Tokyo’s 2021 Olympics. Meanwhile, Sydney Australia’s most populous city is struggling to contain the variants outbreak. The past 24 hours has seen another 24 new local cases despite emergency lockdown protocols being implemented. The S&P200 tumbled 0.5%.
Overnight European benchmarks faired no better, retreating across the board, but nonetheless recorded their fifth straight month of gains. A similar story as Asia with the delta variant risk tilting sentiment to risk-off. This despite Moderna’s recent announcement that their vaccine produces relevant protective antibodies against the highly transmissible mutation.
Ahead of Friday’s US jobs data, the dollar index strengthened anticipating strong job gains and in turn cementing the Federal Reserve’s view to bring the first rate rise forward. Crude oil fluctuated between 73 and 74 as expected output increase coming from todays OPEC meeting is offset by COVID-19’s delta variant. Gold bounced off support to rally back to $1,770 and bitcoin finds equilibrium around $34,000.
Resurgence in COVID-19 cases and emergence of the highly transmissible Delta variant looks set to derail the global reflation trade as cyclicals underperformed on Monday. In Europe, tourism related stocks tumbled leading to broad based benchmarks posting losses after Spain, Portugal and Malta are looking to impose new travel limits from Britain as daily infections hit just under 18,000 cases. Hopes are also fading that the U.S and U.K. would agree to open travel bubble before summer finishes. By sessions end, the FTSE100 had slumped 1%.
Meanwhile, by and large Wall Street defied global sentiment with President Bidens’ infrastructure deal keeping risk-appetite high. The S&P500 edged higher to close at all-time high times whilst the Dow Jones declined 0.6%. Nasdaq benefited from the mild delay to return to normalcy as the index surged 1.1%.
In Australia, Delta variant outbreaks across Sydney had saw the city enter emergency lockdown for at least 2 weeks. The S&P200 gapped lower by 0.3% on open but has since recovered lost ground. Worsening labour market conditions ahead of an already shaking Tokyo Olympic dragged the Nikkei half a percentage point down. Elsewhere, the Hang Seng down 1% with the special territory banning all passenger flights from the U.K.
Crude oil retreated $1.30 following a tumultuous run from $61 since late May. Largely from uncertainty over global demand recovery alongside OPEC’s expected productions increase in the coming months. In defiance over a global regulatory crackdown, bitcoin stabilises above $34,000 after failing to push below $30,000.The U.S. dollar manage to eke out gains overall against counterparts with the South African Rand in focus. On Sunday, President Ramaphosa moved the country to alert 4, outlawing social gatherings, closure of schools and limiting travels. The rise of the Delta variant puts South Africa's economic rebound for 2021 in peril. Since the start of the year, the rand had gained 8.6% only to depreciate 6.7% the past month.
Wall Street resumes its upwards trajectory following a brief intermission on Wednesday. Both the Nasdaq and S&P500 established new record-highs whilst the Dow Jones surged 1.2%. The move spurred on by President Biden securing an infrastructure deal worth $1tn. Whilst less than the $2.3tn announced back in March, with bipartisan support from Republican senator Susan Collins, the deal removes layers of uncertainty for prospects of additional government spending in the future.
Whilst indices in Asia retreated, European benchmarks overnight reacted positively to headlines across the Atlantic, with the STOXX50 gaining 1.1%, CAC40 up 1.2% and DAX30 higher by 0.8%. Good news was also highlight via the Ifo Institute’s business climate index posting higher than expected readings. Elsewhere, the UK100 rallied 0.6% following the Bank of England recent unchanged policy decision. The monetary summary remarked existing policy “remained appropriate” and that the UK would “experience a temporary period of strong” growth fuelling transitory inflation beyond prescribed targets but will eventually fall back.
Crude oil settles above $73 and is set for its 5th consecutive week of advances. Tight markets alongside shrinking stockpiles have been the prevailing rhetoric, despite OPEC’s piecemeal increase in output. With prospects of Iranian oil flooding the market also diminishing, investors look towards the OPEC+ meeting schedule for 1st of July, widely expected to increase quota output.
Among a basket of majors, the U.S dollar index stood there though the pound did slide 0.4% following the BOE’s dovish monetary policy release. Gold edged lower to $1,775 and bitcoin attempts to find equilibrium around $34,000 despite increasing global regulatory scrutiny.
Wall Street applauds Federal Reserve Chair Jerome Powell’s balancing act yesterday testifying before the House Select Subcommittee. Nasdaq has since recovered all losses from last week’s hawkish turmoil to record fresh highs, with the S&P500 set to follow suit today and Dow Jones under way. From his opening statement, Powell took a dovish tone, reiterating “a pretty substantial part, or perhaps all of the overshoot in inflation comes from categories that are directly affected by the re-opening of the economy”. Meanwhile, acknowledging “that these effects have been larger than we expected, and they may turn out to be more persistent than we expected”.
In contrast, European and UK markets crept lower over lack of domestic headlines. Elsewhere, overnight U.S. risk-on appetite did not flow into Asia’s open. The S&P200 contacted 0.5% following weaker than expected manufacturing and services PMI. Meeting minute releases from the BOJ weighed down the Nikkei. Board members noted “uncertainty over the pace and effect of coronavirus vaccinations, which could heighten downward pressure on economic activity”.
Mixed performance on the U.S. dollar saw the index holding steady. In focus, the USDCNH notching its’ 8th consecutive rally to 6.4800 after the PBOC’s intervention to ensure institutions hold greater foreign reserves. Crude oil traded above $73 on an industry report illustrating declines in U.S. stockpiles. And gold edges lower to $1,778 following Fed chairs transitory inflation remarks.
Bitcoin briefly wipes out all its’ gains for the year after tumbling 12% on Tuesday touching as low as $28,824. The cryptocurrency is down more than 50% from its’ April peak of $64,900. Persisting sweeping regulatory crackdown to reign in on the largely unregulated market has put the digital asset under immense pressure. On Monday, Chinese authorities summoned officials from major banks and Alipay to reiterate a ban on cryptocurrency services. Beyond China, global regulators have also advised the toughest capital requirements for holding bitcoin and similar tokens.
Despite holding out among Wall Street, Nasdaq succumbs to Fed tapering rhetoric and slips 1.1% on Friday. Meanwhile, the Dow Jones recorded its 10th consecutive decline, tumbling 2.1% whilst the S&P500 down 1.7%. Surprise hawkishness from policymakers on Wednesday spooked investors into a shock re-evaluation about how much the inflationary risk the central bank is willing to stomach beyond set bands, impeding economic growth.
Contagion spread across Europe as broad-based benchmarks retreated from record highs, eroding gains from previous weeks in a single day. Likewise, Asia dumped on open today. The S&P200 gapped and fell lower by 1%, then Hang Seng posted negatived 0.9% intraday thus far. The Nikkei among the worst performers, tumbling 2.4%, extending losses from last week. With Japan lacking a domestic catalyst for growth, particularly with its ever-failing prospect of a buoyant 2021 Olympics, the nation has been hostage to global demand, especially from the U.S.
Crude oil touches $72 after the 6th round of negotiations between Iran and world powers in Vienna fail to reach an agreement on the nuclear deal. The situation worsened after a hardline cleric, Ebrahim Raisi was elected President of Iran. Talks currently hinge on whether the U.S. can deliver on a guarantee that the nation will not exit reimpose sanctions in the future.
Bitcoin fell to as low as $34,142 on Sunday after regulatory crackdown within China, shutting down mining operation resulting in a declining hashrate. The push comes amid a spike in electricity consumption from server farms. In turn, stoking illicit coal extraction from producers in mines deemed dangerous in meeting rising demand from power plants, endangering President Xi’s ambitious environmental initiatives.
With rate rises anticipated in 2023 compared to earlier predictions of 2024, the U.S. dollar index records it’s largest two-day gain for the year whilst dampening inflation prospects has gold edging lower to $1,764.
Mixed performance across Wall Street following Wednesday’s FOMC meeting. Nasdaq shrugged off expected rate rises in 2023 to surge 1.7%. The S&P500 closed flat, whilst the Dow Jones slipped 0.4% largely from an unexpected spike in unemployment claims. Across the Atlantic, European benchmarks recorded new all-time highs and is expected to post 4 consecutive weeks of advances. In Asia, profit-taking saw the S&P200 and Nikkei drift lower throughout the session. This despite the BOJ extending their pandemic relief program by 6-months. The Hang Seng bucked the trend to rally 0.6% on open.
Crude oil fell back below $71 as the US dollar rallied strongly for two consecutive sessions among developed counterparts. Expected as costlier crude oil of the US would unturn offset rising global demand. Meanwhile, taper tantrum spoiling the inflation risk premia in gold left the metal much less to be desired, tumbling 2.1% on Thursday. Bitcoin though, not immune to cross-currency contagion has edged lower to below $38,000.
Feds tapering plans does not bode well for exotic currencies, particularly the Turkish lira and Chinese yuan. Both currencies overshadowed by varying forms of political and regulatory ideology that may contradict the direction dictated by natural market forces. The USDTRY rose another 1.3% on Thursday, alongside reluctance from Turkey’s central bank in increasing interest rates to fight inflation has the currency now sitting at all-time highs. Following indirect PBOC intervention of recent days, the USDCNH rose above 6.4000, a monthly high. Bringing in rate rises by the Federal Reserve, could derail the PBOC’s plan for a steady and stable depreciation in the yuan.
Wall Street retreated on Tuesday following disappointing retail sales figures alongside faster than expected PPI data fuelling inflation risk. With policy makers set to conclude their two-day meeting on Wednesday, focus will shift towards their outlook and projections, with some analyst expecting the central bank to bring forward their first-rate increase by a year to 2023. Despite this possibility, the VIX index, Wall Street’s fear gauge hit its lowest point since February 2020.
Meanwhile European benchmarks edged higher and the FTSE100 shrugged off lockdown extension worries to gain 0.4% as risk as the potential service job losses is barely expected to put a dent on economic growth this year. In Asia, indices pointed lower in Australia, Japan, and Hong Kong wary of any hawkish indications that might arise out of FOMC.
Bitcoin stabilises around the $40,000 level after MicroStrategy CEO Michael Saylor triples down on the cryptocurrency, currently down 78% of his equity base. The software company turned crypto hoarder raised $400mn to spend on the acquisition of bitcoin.
Crude oil climbed another 1.8% to $72.44 amid continuing signs of stronger global demand. The U.S. dollar index steadied at 1-month highs with the Turkish lira still in focus. The currency weakened 2% to 8.5437 on Tuesday as simmering geo-political tensions drove demand towards the greenback. Elsewhere, gold fell for 3 consecutive days settling at $1,859.
Late-stage rally spurred the Nasdaq to record-highs. The S&P500 eked out a 0.2% lead though the Dow Jones disappointed closing in negative territory. On Wednesday, the Fed is widely expected to maintain its $120bn monthly bond purchases alongside an upgrade on their 2021 growth outlook and materially revise inflation forecast of which investors have seemingly priced in.
Whilst European benchmarks crept higher on Monday volatile sessions, the FTSE100 was weighed down by a 4-week extension to UK’s lockdown following a recent rise in coronavirus cases. Without government support, experts estimate the delay would cost the hospitality industry 3bn pounds a single month.
In Asia, risk-appetite extended towards the S&P200 and Nikkei, up 25 and 176 index points respectively intraday. The Hang Seng slipped 1% on liquidity concerns in China’s stock market and declining metal prices.
Rising geopolitical tensions between US – Turkey left the lira depreciating 2% in two-days with the USDTRY reaching above the 8.5000 level. Relations became strained after President Erdogan doubled down on his of purchase of a S-400 missile defence from Russia abandoning the possibility of lifting sanctions on the country.
As the Chinese renminbi hit a 3-year high in May, Beijing expand the QDII allocation by $10bn early June to stifle the currency’s appreciation. Recent data revealed a cumulative $147bn have been approved allowing domestic investors to access assets outside mainland China. The USDCNH reacted by settling above 6.4000.
Caution ahead of the FOMC meeting on Wednesday saw gold touch a 4-week low to $1,845. Meanwhile, the U.S. dollar index stood steady against major counter parts and crude continues to climb, closing at $71.18. Consecutive endorsements fuelled bitcoins rebound back to $41,000. The most recent support coming from Paul Tudor Jones, whom re-endorsed the cryptocurrency amid a television interview.
With Australia and Hong Kong observing national holidays, the Japanese Nikkei was mute, but manage to notch a modest 0.2% lead intra-day. Likewise, global futures took the opportunity to position in bull territory ahead of each market’s respective opens. Wall Street ended last week with the S&P500 and Nasdaq edging out 0.1% higher after shrugging off Thursdays’ CPI data and was further buoyed by growing American consumer confidence. Despite improving economic data, the inflation rhetoric has seemingly run its course with investors looking towards the FOMC statement due this week.
Elsewhere, the G-7 summit concluded with French President Emmanuel Macron welcoming the U.S. back to the “club”. President Biden announced the summit as a win with headline topics including committing 1bn vaccine doses to poorer countries and holding China accountable for human rights violations.
Friday saw European benchmarks extend their all-time high, whilst the FTSE100 has finally broken out of its tight consolidation with confidence, gaining 1% by sessions end. This despite Prime Minister Boris Johnson expecting to delay the final measures of easing on Monday by another 4 weeks in hopes to the Delta variant strain, first discovered in India.
Crude rose 75 cents as the newest reports from the IEA echoed statements by OPEC, revealing oil demand is set to exceed pre-pandemic levels by the end of 2022. Though consumer demand contracted a record 8.6m bbls a day in 2020, thus far demand has recovered to 5.4m bbls per day on the back of a global vaccine roll-out and subsequent economies opening up. The only impediment, if vaccine distribution were to slow.
Bitcoin saw a rebound back to $39,000 after Elon Musk tweet out the viability of the cryptocurrency should 50% of electricity usage is sourced from clean energy. The U.S. dollar gained among a basket of majors whilst focus shifts towards the Aussie dollar this week particularly the Australia jobs data and Governors Lowe’s expected speech, as it continues to be wedged between 0.76 – 0.78.
Wall Street buys into transitory rhetoric as both the S&P500 and Nasdaq surged 0.5% and 0.8% respectively despite headline consumer price inflation accelerating to 5% YoY. This being the largest annual gain since the 2008 financial crisis whilst a 4.7% YoY CPI was consensus among experts. Treasury yields reflected similar sentiment, as the 10-year fell to 1.43% after reaching above 1.7% just 3 months ago. Labour department officials remarked the gains were largely driven by price snapbacks from the reopening of the economy.
In Europe, broad based benchmarks either loss little ground or ended the trading day unchanged after the European Central Bank raised growth outlook for 2021 but reassured market participants the pace of quantitative easing remains unchanged with ECB President Lagarde saying the block is still “far away from ultimate aim for inflation”. Elsewhere, Asia opened with a volatile session with price action swinging between bull and bear territory.
The U.S. dollar shrugged off the inflation spike as it lost ground against major counterparts. Crude continues to consolidate around the $70 levels and gold appreciates to just below the $1,900 level.
Bitcoin holds steady at $37,000 despite on-going global regulatory crackdown. An announcement form the Basel Committee on Banking Supervision have brought forth a proposal to introduce tough capital requirements for banks dealing in crypto assets to reflect a high-risk category.
Ahead of monthly CPI data today, Wall Street remained largely subdued as the figures are set to illustrate continuing elevated inflationary pressure. Both the S&P500 and Nasdaq traded in a tight range closing close to the open price whilst the Dow Jones slid 0.3%. In the news, while President Biden revokes Trump-era bans on Tiktok and Wechat, the global tax rate endorsed by G7 finance ministers is likely to hit a wall in China. There is no incentives for Beijing to follow suit as the global measure could impede economic development.
In Europe, indices edged higher, lifted by travel companies on reports the White House is looking to relax COVID-10 related travel bans. Though investors remained cautious as attention remained focused on Thursday’s ECB meeting. Despite no changes are expected in monetary policy regime, speculation is rife in policy maker outlook for 2021 could transition to withdrawing quantitative easing for the EU bloc following improving COVID-19 conditions.
Asia opened with more optimism following headlines revealing China commerce minister Wang Wentao and U.S. Commerce Secretary Gina Raimondo spoke via telephone on matters relating to heathier bilateral trade ties and hoping to keep lines of communication open. Both the S&P200 and Nikkei rallied 0.6% with the Hang Kong as high as 0.8% intra-day.
The U.S. dollar index rose slightly against majors on the back of taper rumour though Sino-US trade talks saw the USDCNH trade below 6.3800. Crude oil fluctuates around $70 with gold set to post 3 consecutive losing days. Despite all the negative surrounding regulation and taxation on bitcoin, the cryptocurrency rallied back above 37,000.
Losses made on Thursday were recovered on Wall Street by weeks end following a weaker than expect labour statistics, alleviating concerns of an economy running too hot. Giving weight to the Fed’s continuing narrative that despite overshooting inflation being a real possibility, the effect is transitory. A theory reassured by the U.S. Treasury Secretary Janet Yellen on Sunday, stating that even if inflation triggers higher interest rates, elevated rates could be good for both society and the Fed.
In Europe, the STOXX ended on another record, rising 0.4%. Similar price action was seen for the CAC and DAX. The FTSE100 still fluctuating within a tight range, managing to eke out a 0.1% gain. Profit-taking prevailed in Asia with Australia, Japan and Hong Kong slipping on open following Yellen’s overnight higher interest remarks. Optimism was further dampened after G7 ministers arrived at a global a tax deal to implement a global minimum rate of at least 15% on multinational corporations.
Friday saw crude oil closing beyond $69 and recording 6 consecutive days of advances with Monday open seeing prices touch as high as $69.98 intra-day after comments from Vitol Group on Sunday echoing similar remarks of the OPEC+ meeting of rising fuel consumption. The U.S. dollar depreciated against majors whilst gold surged $20 to $1,890.
Over the weekend, bitcoin traded below $35,000 after reports that Chinese social-media service Weibo suspended various crypto-related accounts. When attempting to view the accounts, the service tags the account as violating laws and regulations. Meanwhile, a Goldman survey of 25 CIO’s around globe reveal there’s still reluctance in adopting the alternative asset.
Nasdaq led Wall Street lower on Thursday tumbling over 1% whilst cyclical heavy blupchip S&P500 slipped 0.4% and Dow Jones stood unchanged by sessions close. The asymmetric weakness comes amid data release by the UN Food and Agriculture Organization revealing food prices have surged by their highest margin in a decade in May, further fuelling inflationary concerns.
Expanding on a Trump-era blacklist policy, President Biden signed an order banning U.S. investment in 59 Chinese firms with ties to China’s surveillance industry or military. The ban will take effect one year from now, allowing U.S. American companies to divert holdings elsewhere.
Meanwhile, attempting to secure a bipartisan agreement, the President is prepared to drop his demands for a corporation tax hike to entice republican support for his $1tn infrastructure spending package.
European markets initially followed the U.S. lower but subsequently parred losses as services PMI data kept sentiment upbeat. The STOXX posted only a 0.1% loss after slipping as much as 0.8% with the CAC expressing similar price action. The DAX outperformed closing flat. Ahead of U.S. labour data today, Asia opened mixed. The S&P200 and Hang Seng tracked the U.S. on open whilst the Nikkei declined.
Crude oil is set to post 2 weeks of advances after a significant draw in inventories reinforced the OPEC+ meeting’s bullish outlook. The U.S. dollar was stronger across the board following a rung of optimistic data on Thursday whilst gold hit a 2-week low to $1,870. Elsewhere, the Turkish lira notches lower with USDTRY closing above 8.7000.
Since the PBOC’s intervention, the renminbi has declined 4 consecutive days losing 0.6%. The week has saw authorities raising foreign-exchange reserve requirement and express unfavourable rhetoric against the currency’s appreciation.
On Wall Street the S&P500 and Nasdaq edged lower whilst the Dow Jones settled just above positive territory as fundamentals conflict between persistently improving economic optimism against overshooting inflationary risk. In Europe, indices started June strongly as the CAC, STOXX and DAX closed at all-time highs with miners and energy companies leading the way. The FTSE100 gained half a percent but was still fluctuating within a tight consolidation between 7,000 – 7,100. Asia opened mix with the S&P200 rallying 0.7%, so too did the Nikkei gain however the Hang Seng retreated 0.4%.
The USDTRY surged to record highs todays to 8.784, appreciating as much as 2,400 pips intraday after President Erdogan publicly remarked “I even spoke to the central bank governor today…we certainly need to lower interest rates”. This despite annual inflation rates hitting 17.14% in April. Since 2015, the Turkish lira has averaged 17% annual losses. Investors regained confidence late 2020 when a more hawkish central bank chief was selected, only to be abruptly replaced mid-March 2021 by Sahap Kavcioglu, an extreme dove.
China’s renminbi is set to post 3 consecutive days of losses after the PBOC announced stricter foreign currency requirements in Chinese lenders. The measure not used by the central bank since the GFC as the renminbi’s appreciation increasingly worry Beijing. A stronger currency would make exports pricier but on the other hand cheapens imports of raw material.
Crude oil reached a hit of 68.87 on Tuesday following the OPEC+ meeting. Whilst there was no mention of Iran, members reaffirmed the existing commitment to gradually return 2 million bpd this year on the back of “ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling”.
The U.S. dollar gained overall, gold fell back to $1,900 and bitcoin stabilises around $37,000.
As the U.S. and U.K. observes Memorial Day and spring bank holiday respectively, futures and indices across the globe retreated on lighter volume as the lack risk-on sentiment spurred profit taking. In Europe, despite the weaker session on Monday, benchmarks are set to record consecutive weeks of gains with ever-growing confidence of a post-pandemic economic recovery fuelled by an accelerating vaccination program. Of which had its distribution hiccups amid the first quarter resolved.
In Asia, as the S&P200 and Hang Seng begins recovering previous day’s losses, the Nikkei lags suffering a 1% decline intraday on weaker capital spending data. The nation is also suffering varying degrees of predicaments arising from their 2021 Tokyo Olympics as regardless how it handles the games from “cheer-free” stadiums to banning eating inside, Japan will face huge financial losses.
Crude oil is set advance to a 32-month high, currently just below $68, following an assessment from an OPEC+ committee illustrating improving global demand will be able to absorb the incoming 2 million bpd from Iran should the scenario eventuate. Confidence arises as stockpiles slide, built during the pandemic and Iran ensuring their supply will be orderly and transparent.
With bitcoin falling out of favour, gold continues to rise, safely settling above $1,900. Demand has risen alongside two prevailing factors. The first being inflationary risk, the second a commodity boom driven by a global supply constraint.
The U.S. dollar index fell, nearly yearly lows, among a basket of majors with the pound grabbing headlines as it hits a three-year high. The progress of vaccinations across the U.K. has ensured the nation as one of the first to return to economic normalisation.
Cyclicals on Wall Street notched higher with the S&P500 and Dow Jones outperforming. Nasdaq unchanged as President Biden is set to unveil a budget anticipated to increase federal expenditure to $6tn in the next fiscal year geared towards the real economy. Meanwhile, an expansive bill set to tackle Chinas’ rise and competitiveness gains bipartisan support in the Senate but faces minute obstacles in the House. The new bill would see the government spend more than $100bn in R&D as well as another $52bn to grandfather America’s domestic semiconductor manufacturing industry. Alongside spending programs, the bill includes additional measures punishing China on human right breaches and restrict influences on U.S. soil, escalating an already heated geopolitical tensions.
In Europe, benchmarks aligned price action with their U.S. counterparts and so too the FTSE100. Asia opened more upbeat as indices across the board rallied. The Hang Seng is to settle at a 2 month high, the S&P200 an all-time high, and the Nikkei advancing 1% intraday.
China’s yuan continues to surge ahead despite drawing caution from the PBOC. Authorities had remained on the sidelines allowing the daily reference rate to track the market. However, the most recent daily fixing saw the central bank set figures at 6.3858 compared to the markets estimate of 6.3837. A subtle change in tone.
The U.S. dollar index left unchanged on Thursday, gold stabilized at $1,898 and crude rises beyond $67. Bitcoin finds equilibrium around the $39,000 level following last weeks rout. During a Bloomberg interview yesterday, legendary activist investor Carl Icahn said despite the tumble, cryptocurrency is here to stay and that his own fund is considering adding up to $1.5bn in the digital asset class.
Asia opened largely upbeat in today’s open whilst a volatile session with price action swinging between small gains and losses but ultimately ending relatively flat for Wall Street on Tuesday. There are widespread expectations that the Federal Reserve will not explore any immediate measures of policy contraction against transitory inflation as was reiterated by Fed vice-chair Richard Clarida yesterday whilst acknowledging in upcoming meetings they might begin to “discuss scaling back the pace of asset purchases”.
Elsewhere, benchmarks in Europe retreated from medium-term highs. Both the STOXX50 and DAX traded at all-time highs but nonetheless settled just below the level. Meanwhile, the FTSE100 underperformed posting a 0.7% decline.
China’s renminbi hits a 3-year high against the greenback yesterday whilst the PBOC has remained relatively quiet on the matter. A stronger currency has made it cheaper for the country to import raw materials fuelling the recent commodity run, however would hurt domestic exporters.
The Turkish lira takes another 600-pip hit after President Erdogan sacks another central bank official. Deputy Governor Oguzhan Ozbas was dismissed in the early hours of Tuesday, the third senior official in the past 2 months. Erdogan has attempted to purge the institution with individuals in line with the presidents unconventional view that high interest rates cause instead of dampens inflationary pressure. The central will hold their next meeting on June 17. Many expect policy to be left unchanged though hawkish language will be removed from policy statements.
The U.S. dollar index settled at 6-years low alongside declining treasury yields as more Fed officials join the ranks in downplaying mains streets inflation rhetoric. Crude oil steadied at $66, gold resumes their rally back up to close at $1,898 and bitcoin trades above $40,000, again.
Risk-on sentiment prevailed on Monday as Wall Street looked past last week’s crypto rout with technology outperforming against cyclicals. Nasdaq led the benchmarks gaining 1.7%, followed by the S&P500 up 1% and then Dow Jones lagging 0.5%. Reassuring remarks from Federal Reserve Bank of Atlanta President Raphael Bostic amid an online event hosted by the Homer Hoyt Institute further soothed angst when he reiterated that inflation is transitory driven largely by demand responding faster than supply as the economy moves beyond the pandemic.
Despite subdued trading activity. Of the markets opened in Europe, indices followed U.S. optimism higher with the French CAC settling just below all-time highs. Corporate earnings kept upward momentum going alongside the ECB President Christine Lagarde noting on Friday that it’s too early to discuss reducing their 1.85tn euro emergency bond purchase scheme in opposition to fellow colleagues who are keen to discussing tapering.
A healthy start for Asia with both the S&P200 and Hang Seng rallying 0.6% and 1.6% respectively on open. Gains on the Japanese Nikkei were weighed down by a travel warning from the U.S. whilst the country is currently under a state of emergency. The COVID-19 resurgence has re-casted doubts over Tokyo’s plan for the 2021 Olympic due to start in less than 2 months.
Crude oil rose over $2 to close at $66 following stalling negotiations between Iran and US. The American greenback index declined, closing just above a 5-year low. Gold steadied at $1,881 and bitcoin rebounded back to $39,000 after Elon’s demeanour towards the digital asset looked more positive.
Mixed results for Wall Street on Friday as cyclical prominent benchmarks namely S&P500 and Dow Jones managing to end the session higher spurred on by better-than-expected flash manufacturing and services data. Likewise, in the face of lingering inflation risk, European indices rose on the back of similar leading economic output indicators. Whilst remarks by Philadelphia Fed Bank President Patrick Harder noting talks regarding asset purchase reduction should happen “sooner rather than later” spooked the tech heavy Nasdaq 0.6% lower.
In Asia, weekend crypto turmoil saw cash indices fall on open, only to recover by mid-session. The Australian S&P200 and Japanese Nikkei just 0.1% higher from last week’s close while the Hang Seng initially declined 0.8% has since climbed back to only post a 0.2% lost. Despite persisting headlines of inflation. There is signs China is attempting to temper the commodity boom as rhetoric around surging commodity prices is increasing amid State Councils. Since last year, the PBOC had already begun limiting the flow of money into the economy, now there are clear signs infrastructure spending has also declined with drop in bond sales.
For the past month, crude oil finds equilibrium between $61 - $67. World leaders and Iran are expected to converge in Vienna this week likely to revive the nuclear talks. If U.S. lifts sanctions Iranian oil production would flood the market. On the other side of the spectrum, COVID-19 infections in the US and EU continue to slow, fuelling energy consumption. Elsewhere, the U.S. dollar capped the week trimming some loses against majors and gold post 7 consecutive days of advances to settle at $1,881.
A day after China announced a regulatory crackdown on digital currencies, the crypto onslaught continues with the Biden administration also unveiling plans of their own to tax transfers of more than $10,000. This comes amid President Biden’s $1.8tn American Families stimulus plan and addressing tax evasion alongside a $600bn tax gap last year. Across the East, last week China delivered a one-two punch as regulators initially reiterating a ban of digital tokens in financial transactions, followed up by a crackdown on crypto mining to assist in meeting its clean energy and carbon emission goals. Monday saw Bitcoin fluctuating around $35,000.
Volatile session across Wall Street with major benchmarks initially slipping ahead of the FOMC meeting minutes. However, upon release subsequently recovered lost ground made amid intra-day. Nasdaq outperformed ending the day above open price whilst the S&P500 and Dow Jones declined as much as 1.4% and 1.5% but rallied back up to post losses of only -0.4% and -0.2% respectively. Almost as if investors found solace after the minutes revealed some Federal Reserve officials were open in discussing scaling back quantitative easing should the economy continue to recovery at sufficient pace. This deviates from Fed Chair Jerome Powell’s constant reassurances that the central bank remains to be super accommodative.
In Europe and the UK, indices largely followed U.S. price action but nonetheless still ended the session lower. The largest factor continually weighing down risk appetite is still inflationary pressure. Risk that was reinforced by Wednesday’s CPI data out of the EU, UK and even Canada. CPI data in the UK accelerated, remains elevated in the EU, and beat expectations in Canada. Following a public holiday, the Hang Seng gapped half a percent lower. Meanwhile, the S&P200 regained all lost ground from Wednesday and the Nikkei edged up 0.3%.
Rollercoaster ride on bitcoin as the digital asset fell 30% yesterday only to rebound off the $30,000 level to rally back up to $38,000. Without Elon’s support on top of governments across the globe circling in, particularly in relation to taxation, the crypto market cannot catch a break.
With taper discussion on the table, the U.S. dollar gained across the board, crude falls slumps to $63 on supply risk and gold steadies around $1,869.
Lingering inflation concerns saw Wall Street lose ground ahead of Wednesday’s Federal Reserve meeting minutes. Officials have continually reiterated their stance to remain super accommodative as they see the recent spike in inflation as transitory. Nonetheless, investors are keen to deciphers the minutes outlook for clues if the Feds tone has changed, especially as many speculate, we’re at the beginning of a commodity super cycle. Both the S&P500 and Dow Jones fell 1% whilst Nasdaq performed slightly better, down only 0.8%.
In Europe, a similar story was depicted across the board where gains early on open were erased slowly through yesterday’s session. The STOXX50, a prime example, gapping up 0.5% initially only to end in negative territory settled at -0.7%. Flash GDP data showed the region entering a technical recession, quarterly employment change contracted, and trade balance appears to be collapsing. Across the channel, despite posting better labour market figures, the FTSE100 could not fend off contagion ending lower by 1%.
Mixed performance in Asia with Australia S&P200 tumbling 1.1% thus far weighed down by not only the global inflation narrative by also weakening consumer sentiment. The Nikkei was unchanged whilst the Hang Seng was closed today as Hong Kong observed Buddha’s Birthday. Complacency and supply constraints were seen as the presiding factors over the regions recent outbreak. Taiwan went from near-zero infections to triple digit daily figures with the government soon approaching the decision for a hard lockdown. Meanwhile, Singapore has lengthened time between vaccines to at least 6 weeks as demand for vaccinations grow.
Revived nuclear restriction negotiations between the U.S. and Iran pressured crude oil prices lower to below $65. Should talks succeed, sanctions on Iranian oil exports could lift and global supply would be inundated with new stock. The U.S dollar sank against majors and gold post 4 consecutive days of advances to $1,869.
No relief for bitcoin as the cryptocurrency falls below $40,000 after the PBOC reiterated that Chinese institutions cannot accept digital tokens as a form of payment. After reaching an all-time of $64,900 the alternative asset has fallen 40%.
Benchmarks retreated in Asia as renew spikes in daily COVID-19 cases around the region weigh in on risk appetite. After reporting 38 new cases on Sunday, their highest in more than year, the Singaporean government will begin closing most schools till May 28. Meanwhile, Taiwan has imposed restrictions on social gathering and in turn shutting down entertainment venues and religious activities as a record 180 cases were discovered. The Hang Seng outperformed slipping only as much as 0.3% intra-day whilst both Australia and Japan fell 0.34% and 2% respectively.
Wall Street ended Friday on a higher note as softer economic data alleviated inflation concerns and fears of tighter central bank policy pushing ahead of schedule. Nonetheless, markets still recorded their worst week since February this year on U.S inflation data rising 4.2% year or year last Wednesday. Exceeding the 2% mandate. The Nasdaq was up 2.4%, S&P500 climbed 1.5% and Dow Jones following suit higher by 1.1%.
In Europe, investors followed cues from the U.S. as the STOXX surged 1.8% but fell just short of making an all-time whilst the French CAC enjoyed settling at record levels. Since April, EU infections have halved as vaccine were delivered en masse allowing the block to begin reopening economies. Over the past week, German eased their lockdown, France lifted their travel ban and Spain elapsed their state of alert.
The embattled posterchild of cryptocurrency dipped below $44,000 today after Musk performed a 180 flip on his previous statement that Tesla won’t be selling any bitcoin despite suspending purchases. A twitter exchange on Sunday between Musk and twit handle @CryptoWhale implied the company may sell Bitcoin in the next quarter or has already sold its holdings.
Weaker data saw the American greenback lose ground against majors. Crude fluctuates between $63 - $66 as COVID flare-ups in Asia offset demand recovery. And gold soars above $1,850 on the back of a commodity super cycle.
Wall Street fell on Monday with inflationary risk once again grabbing headlines. Nasdaq underperformed among the lot tumbling 3%, the S&P500 declined 1.2% and Dow Jones snapped a 5-day winning streak. Ahead of official CPI data releases on Wednesday, preliminary forecast by the Central Bank of New York yesterday saw median inflation expectations for the year at 3.4%, its highest level since September 2013. Despite the Federal Reserve’s constant reassurances, they would allow inflation to exceed 2%, investors worry elevated yields would depress equity valuations, particularly tech stocks that do not pay generous dividend yields. This situation is further exacerbated amid a potential commodity super-cycle, especially as copper hits record highs whilst iron ore prices jump 10% on the back of a global economic recovery that extends beyond China’s metals demand.
European benchmarks were not spared from the inflation rout despite optimism of EU states re-opening up and continuing easy monetary policy. The French CAC retreated from all-time highs, DAX down 0.7% and STOXX slipping 1.1%. The FTSE100 snapped their 3 days rally amid easing restrictions that will allow Brits to participate in social contact alongside resumptions in indoor entertainment activities.
In Asia, a double whammy between tracking overnight U.S. tech stocks and domestic cyclicals affected by the recent state of emergency saw the Nikkei drop 2.3% intra-day. The Hang Seng fared no better, gapping 0.9% lower at open, and subsequently declining another 1.2%. Ahead of tonight annual budget release, Australia’s S&P200 somewhat outperformed down only 0.8%.
The U.S. dollar index stood steady though underperformed against the pound as the GBPUSD rallied 130 pips. With the conservative party gaining greater foothold, a Scottish referendum unlikely to past, and a successful vaccination roll-out in the country, risk of future uncertainty has dimmed. Meanwhile, gold rallies 4 consecutive days, crude oil fluctuates around $65 and bitcoin back down to $55,000.
Mixed start in Asia as Australia’s business sentiment reaches new records propelling the S&P200 as high as 1% intra-day. Indicators for hiring, sales and profits surged giving weigh that the Australian economy has moved past the rebound phase on towards growth. Despite new polls on Monday indicating popularity for Japan’s presiding Prime Minister declining, the Nikkei mustered enough strength to gain 0.5%. Following a COVID-19 scandal, PM Suga’s favourability has declined to 40% and the government extending their state of emergency in prefectures covering 40% of the economy risk a potential double-dip recession. Elsewhere, Hong Kong underperforms, down 0.9%.
For Wall Street, bad news is good news with last Fridays’ jobs data sorely missing market expectations. Not only did non-farms employment change came in way below forecast, but the unemployment rate edged higher. With this, risk of overshooting inflation eased whilst President Bidens’ on-going fiscal stimulus gained support. Both the S&P500 and Dow Jones welcomed the figures, rallying to all-time highs as the Nasdaq gained 0.8%.
European markets followed U.S. counterparts adding onto risk towards the broad market. In the U.K, the FTSE100 recorded 3 days of consecutive gains after Prime Minister Boris Johnson emerged stronger from local elections whilst the Scottish National party pushing for Scotland’s independence fell one seat short of outright majority.
The U.S. dollar index fell sharply amongst a basket of currencies as risk-on appetite increased. Gold rose sharply the last two trading days to $1,833 alongside a bull-run on metals driven by strong from China. Meanwhile, crude edged above $65 after reports of a cyber attack on the biggest pipeline in America. Colonial Pipeline Company was forced to shut down their entire system on Friday after getting hit with ransomware. Meanwhile, bitcoin recovers back to $59,000 as it attempts to chases the out-performance seen in altcoins such as Ethereum and Litecoin.
Another intra-day tumble saw Wall Street erase early gains after the White House announced their support to suspend intellectual property rights for COVID-19 vaccines amid extraordinary circumstances. A similar measure was proposed by the WTO back in October, however then President Trump had firmly opposed such plans alongside the UK, EU and Switzerland. As expected, the decision hit pharmaceutical companies hardest dragging down overall sentiment in markets. Nasdaq again hit hardest recording 5 consecutive days of declines.
Final statements amid the G-7 meeting saw foreign ministers take a last dig at China, voicing concerns against human right abuses, encroachment onto Taiwan’s borders and cyber espionage. As President Biden continued his predecessor’s firm stance towards China, European allies have begun to follow suit.
In Europe, broad-based benchmarks recovered previous days losses following U.S. Treasury Janet Yellen’s correction overnight whilst the FTSE100 hit a 15-month high. Meanwhile, Asia opened mixed as Japan and China resumed trading after a long weekend holiday. The Hang Seng despite a volatile session is set to close unchanged. Investors are awaiting whether China’s economic czar, Vice Premier Liu He will bail out the troubled Chinese financial conglomerate Huarong. Allowing the firm to collapse could ignite a financial crisis. Elsewhere, the Nikkei rallied 1.2% and S&P200 fell 0.9%.
Crude oil fell but remained above $65 despite inventories in greater than deficit than anticipated. The U.S. dollar index was mute, gold remains in a tight range between $1,760 – $1,800 and bitcoin crept back to $57,000.
Amid an event host by The Atlantic magazine, remarks by U.S. Treasury Secretary Janet Yellen sparked a mid-session tumble on Wall Street when she noted “that interest will have to rise somewhat to make sure that our economy doesn’t overheat” alluding to President Bidens’ rounds of pandemic, infrastructure, and welfare expenditure. The point was further echoed by White House Press Secretary Jen Psaki who said the administration views “inflationary risk incredibility seriously. Whilst the Dow Jones recovered losses by sessions end, Nasdaq suffered their worst daily loss since March as tech juggernauts came under pressure. Contagion from Janet Yellen’s comments throughout Europe as tech firms dragged down broad-based benchmarks.
In Asia, indices and futures began recovering overnight losses as Yellen clarified herself in a later event hosted by Wall Street Journal saying she was not over-stepping her role or recommending interest rate interests and that “if anyone appreciates the independence of the Federal Reserve, I think that person is me”.
Meanwhile, global geopolitical tension is on the rise following the G7 foreign minister meeting in London, of whom Germany, Italy and France is considering following U.S. footsteps to counter China’s economic coercion. Though the U.K. remains reluctant as Prime Minister Boris Johnson hopes to strike a balance between East and West.
On the coronavirus front, in response to surging cases of global COVID variants, Singapore has tightened social distancing measures alongside border controls. Whilst Vietnam will prolong the length of quarantine.
Despite volatility across global indices, the U.S. dollar index stayed steady. Crude oil advanced $1.60 to over $66 following reports of a potential commodity super cycle as poor weather and distribution bottlenecks affect supply. Gold retreated back below $1,790 and bitcoin continues out of favourability to settle at $54,500.
Corporate earnings drove mixed results on Wall Street with both the S&P500 and Dow Jones gaining 0.3% and 0.7% respectively whilst Nasdaq lost half a percent. Quarterly earnings from cyclical firms on average rose 53% YoY crowding out risk appetite for tech darlings, of whom despite upbeat results thus far traded lower on Monday. During an online conference hosted by the National Community Reinvestment Coalition, Federal Reserve Chairman Powell remarked the U.S. economic outlook has “clearly brightened” and that although there is no precise formulation in determining full employment, the central bank will be very transparent if we are close.
Likewise, European markets surged as manufacturing PMI data across the bloc maintained elevated levels. Consumer demand is surging fuelled by members states re-opening from national lockdowns improving overall prospects. The vaccine distribution issues which plagued the continent in Q1 has dissipated as total jabs catch up to UK and US counterparts.
With Japanese banks observing Greenery Day and China closed for labour day, activity is Asia was dampened though the Nikkei and Hang Seng etched out gains intra-day. The Reserve Bank of Australia held monetary policy unchanged as expected, forecasting a pickup in inflation but only modestly incremental. The S&P200 rose slightly, higher by 14 index points.
On the coronavirus front, alongside India, fresh waves of new and more contagious variants are spreading throughout developing economies like Thailand and Laos as government complacency and authorities lacking medical resources being the main driver.
The U.S. dollar index head steady, crude oil up by $1 to $64.50 and gold rose sharply by $2.50. Whilst alternative crypto currencies like Ethereum reach record highs, bitcoin continues to stagnate around the $56,000 level.
Inflation concerns back in the foray following a mix of upbeat global economic data releases on Friday. In unison, Wall Street ended Friday in negative territory with the S&P500 retreating from all-time highs, the Dow Jones in tight 500 index point consolidation since late April and Nasdaq underperforming lower by 0.5%. Despite Treasury Secretary Janet Yellen downplaying inflationary risk, personal income of U.S. households expanded double digits to historic highs whilst the PCE price index increases beyond market consensus spooked sentiment. Meanwhile the Federal Reserve Chair Jerome Powell continues to do this part, reassuring investors that creeping U.S. inflation is transitional and does not justify hawkish monetary policy endeavors.
In Europe, benchmarks followed America’s lead, declining for two consecutive sessions underpinned by increasing monthly CPI figures whilst a negative quarterly GDP see’s the bloc enter a technical recession. Likewise, the ECB echoed similar views of the Fed, denoting inflationary pressure as transient brought on by rising oil prices since last year November. Ahead of a host of UK elections, the FTSE managed to outperform global counterparts edging higher by 7 index points. On Thursday, votes on Scottish and Welsh parliament as well as mayoral constituents are expected to take part with the ruling conversative parties enjoying a healthy 44% support. Though, Sadiq Khan a labour incumbent is expected to win a second term as London’s mayor.
Mixed start to Asia despite bank holidays in China and Japan. The S&P200 reversed all its gains from open after a leading economic CPI indicator from the Melbourne Institute saw inflation remaining on elevated levels. Hong Kong tumbled 1.6% whilst Japan bucked the trend to climb higher by 0.5%.
The U.S. dollar index gained 0.7% as investors position cautiously, ahead of this week’s raft of policy decisions and central bank chief public remarks. Crude fell approx. $1.40 to $63.40 as India COVID-19 predicament clouds global outlook. Gold closed at $1,768 and bitcoin resumes its long-term uptrend, touching $58,000 intraday.
Federal Reserve sets a high bar before even considering pulling back quantitative easing after clarifying “substantial further progress” needs to be made towards full employments and inflation foremost. Whilst inflation expectation rose substantially in Q1, the central bank considers the increase as ‘largely transitory’. Despite reassurances by Chairman Jerome Powell, all in large, Wall Street only managed etch out minute gains. Cautious of the undertone a U.S. economic recovery has found solid footing amid a 2.25tn infrastructure plan on top of a 1.9tn pandemic relief plan followed by a proposed 1.8tn education and childcare plan unveiled just yesterday.
In Asia, Hang Seng opened higher amid Hong Kong’s parliament passing a tax concession bill for funds that would bolster competitiveness in financial markets. The tax concession would apply to carried interest distributed by private equity funds as well as remuneration paid in such firms. Despite Japanese markets closing in observance of Showa Day, futures rose by 0.35% intraday whilst the S&P200 was flat on lacklustre earnings releases. Elsewhere overnight European markets was mixed but ended largely in positive territory as investors weigh against the Fed’s current stance with a revised economic outlook.
The U.S. dollar lost ground against a mix of majors following the Federal Reserve’s reiteration of loose monetary policy. Crude oil crept higher to $63.60 as weekly inventories lowered, gold fluctuated between $1,763 – $1,783 and bitcoin halts its two-day advance to retreat to just above $54,000.
Wall Street took a pause near record highs as investors digest quarterly earnings and brace for FOMC tonight. Nasdaq underperformed slipping 0.5%, dragged lower by Microsoft and Tesla, whom despite earnings beating expectations have sold-off. Federal Chairman Powell is expected to repeat his longstanding message that irrespective of inflationary pressures, policy will remain accommodative until the economy and labour market recovers. Though a potential recalibration in quantitative easing could be on the horizon especially as the Bank of Canada last week become the first of G7 central banks to began scaling back purchases.
Results were mixed in Europe, but overall market action was subdued. The European Parliament will vote on the Brexit trade deal to approve the agreement and allow the EU to punish Britain with tariffs should post-Brexit obligation fail to eventuate. Meanwhile, the European Commission proposed new rules in response to the competitive threat foreign state-owned companies pose against domestic counterparts.
In Asia, the Japan’s Nikkei edged higher on better-than-expected retail sales figures. Australia’s S&P200 up 20 index points as inflationary pressures disappoint consensus giving ammunition for the RBA to remain accommodative.
Despite global demand outlook being uncertain arising from uncontrolled outbreaks in India, Brazil and now Philippines. The OPEC+ meeting concluded with member states in agreement to progressively increase production in the coming six months by 5.2m barrels a day. Still, crude rallied just over $1 to $62.95 on the news.
The U.S. dollar gained against a basket of majors as investors speculate potential groundwork could be laid by the Federal Reserve in tightening overall monetary policy. Elsewhere bitcoin closed back above $55,000.
Mixed start during Asia with Australia’s S&P200 and Japan’s Nikkei losing ground from open whilst the Hang Seng gains 0.3% with travel bubble opportunities opening up. The BOJ kept monetary policy endeavours unchanged, however have signalled giving up the 2% inflation target amid renew state of emergency measures. The Hong Kong – Singapore quarantine free travel bubble is set to launch on May 26th with one flight each direction per day. Australian and New Zealand will observe with keen eyes as they too initiate discussions with Hong Kong on future travel amenities.
Strong corporate earnings fuelled Wall Street’s advance ahead of the FOMC meeting on Wednesday. The S&P notched to record highs and the Nasdaq outperformed gaining 0.8% for the day. Despite companies releasing rosier outlooks for 2021, the Fed is expected to reassure investors that conditions do not warrant a withdrawal of monetary easing. Elsewhere, the White House has announced on Monday to distribute 60m doses of AstraZeneca’s vaccine to India to offer support in combatting COVID.
In Europe, whilst intra-day volatility was mute, benchmarks managed to etch out another day of gains. Italy eased restrictions on Monday with France contemplating the same scheduled for next month. The US and EU are in discussions of an open travel bubble to boost domestic tourism as EC President Ursula von der Leyen signalled vaccinated Americans should be able to travel to the bloc this summer.
Crude oil fluctuates between $60.50 - $62.50 as investors digest Brazil and India’s surge in coronavirus cases. The U.S. dollar index continues to lose ground against majors, gold rose to $1,780 and bitcoin bounces back to $54,700 with JP Morgan preparing to offer a bitcoin fund to wealthy investors.
After a volatile week, Wall Street settled somewhat flat near record highs. Strong corporate earnings and upbeat outlooks throughout the week proved the post-pandemic economic recovery is well underway. Only to be briefly overshadowed by fleeting shock headlines surrounding global resurging infection rates and a rumored capital gains tax hike in the America. Geopolitical tensions between the U.S. – Russia worsened following sanctions, whilst investors brush off elevated U.S. – China tensions to invest $6.6bn on IPOs in mainland and Hong Kong firms.
Across the Atlantic, European markets ended Friday’s session relatively unchanged from the day before. This despite solid earnings announcements and expanding manufacturing and services PMI releases. Meanwhile the U.K. managed to etch out a 0.3% gain on exceptional retail sales data as Prime Minister Johnson braces for allegations from a former aide that the government could have implemented a better response to the COVID pandemic during winter that would have prevented thousands of deaths.
In Asia, the Japanese Nikkei fell as much as 1% on open as the government enacted a state of emergency, beginning 25th April till 11th May, hoping to stifle recent case spikes. The affected prefectures include Tokyo, Osaka, Hyogo, and Kyoto. Election results saw Prime Minister Suga’s ruling LDP party lose all three by-elections ahead of general election held in 6 months. Recent scandals and poor performance in handling the pandemic chipped off a few percentage points in his approval rating. Elsewhere, the S&P200 gapped lower, and the Hang Seng subdued.
With yields finding equilibrium at pre-pandemic levels, demand for the U.S. dollar has become lackluster among majors as the index resumes its’ long-term downtrend. Crude fluctuates around $62 and likewise gold retreated to $1,776. Weekend trading saw bitcoin hit $47,000, its lowest level since March, before rebounding to over $52,000 during Asia session today.
President Biden’s plans to introduce a capital gains tax of 43.4%, essentially doubling of existing rates, for those earning $1 million or more jarred Wall Street as major benchmarks tumbled lower. Nasdaq down 0.9%, Dow Jones lost 0.7% and the S&P500 slipped 0.6%. The plan comes amid the administration’s fiscal splurge to ensure the American recovery stays on track and would also reverse some of the tax cuts previously passed by President Trump in 2017. UK and European markets were subdued after the ECB left monetary policy unchanged offset U.S. contagion.
In Asia, indices brushed off overnight sentiment to rally on open. Despite Hong Kong and Singapore calling off a planned air-travel bubble planned for Thursday, the Hang Seng rose 1.1% intraday. The postponement was triggered following an outbreak among Singapore’s migrant worker community. The Nikkei edged higher amid the government plans to implement a “short and powerful” state of emergency for big cities, just 3 months out from the Olympics. Daily cases in Japan has spiked to over 5,000 just yesterday.
Risk-off appetite saw the U.S. dollar gain among majors. Gold set to record their 3rd consecutive weeks of gains, currently at $1,780 whilst palladium retreated from all-time highs to settle at $2,828 as a tight supply situation pushed prices higher. Improving gasoline demand in the U.S. saw oil prices gain. This despite the COVID pandemic in India and Brazil reach crisis levels.
Bitcoin continues to receive a beatdown as it declines below $49,000 after just hitting $64,900 two weeks ago. A raft of potential regulatory reform in the U.S. from money laundering legislation to a capital gains hike has fuelled the outflow. Nonetheless, the crypto asset remains as one of the best performers for the past year, sitting on 625% gains.
Wall Street takes a breather from recent advances as the worsening global coronavirus situation weighs down optimism alongside Tesla tumbling after reports that one of its vehicles killed two passengers whilst potentially on autopilot hinders risk appetite. In Europe, profit taking took hold amid lacklustre major events and likewise, the FTSE100 retraced all gains from last Friday session as the UK discovers new cases of the COVID-19 variant from India on top of South Africa’s one.
The Hang Seng set to buck overnight sentiment rallying 0.8% since open. Keynotes from President Xi’s speech during the four-day Boao forum in Hainan, stressed global corporation among nations in artificial intelligence, biotechnology, and new energy. Meanwhile, both the S&P200 and Nikkei slipped 0.5% and 0.9% respectively. The Australia – New Zealand travel bubble is poised to benefit a decimated tourism industry tremendously though could hit a snag with vaccine delays. In high stakes talk, Australia intends to ask the EU to lift export restrictions on 3m doses of AstraZeneca’s vaccines in exchange for dropping carbon tariffs on imports.
Crude oil edged higher to $63.40 as investors resume speculating the reopening of the economy stoking demand despite OPEC’s planned production increase. India brutal COVID-19 resurgence though poses potential risk to oil demand.
The U.S. dollar weakened against a basket of majors, more so sharply against the pound and yen. Down 1% for the former and 0.5% for the latter. Gold retraced to $1,771 and bitcoin resumes its freefall, hitting a low of $53,500 intraday.
Major Wall Street benchmarks ended last week at all-time highs. The rotation out of tech is nothing but a fading memory, the Dow Jones post 3 consecutive weeks of gains and the S&P500 eye’s the 4,200 level. A culmination of an improving labour market, jolt in retail sales and more stimulus bolstered investor risk appetite as the case for economic reopening accelerates.
European markets finished Friday strongly amid the EU hitting a milestone of administering 100m vaccine doses. Corporate earnings releases from carmakers have been upbeat alongside a tremendous surge in China’s quarterly GDP figure. Meanwhile the UK’s FTSE100 crosses the 7,000 level, unseen since February 2020.
Mixed opening for Asia, with both Australia and Japan subdued whilst Hong Kong rallied 1% following China’s financial regulator coming out reassuring investors that Huarong Asset Management, a distressed loan manager, has ample liquidity. The company is seen as a gauge to China’s economic health, however had their shares suspended in March 31st after failing to report quarterly earnings.
On the coronavirus front, ill-equipped nations struggle to fend off worsening outbreaks as the world hits a weekly infection rate record. Globally, cases have topped 5.2m people have been diagnosed with the virus with Brazil and India most affected. On the bright side, a silver lining from a new study that suggest, if you’ve been infected with COVID-19 before, a single dose of Pfizer and Moderna is need, especially during a time when distribution is constrained.
Cryptocurrency mania hit a roadblock on Sunday, as bitcoin tumbled 15% to $56,440 after hitting a record high of $64,869 just a few days back. Recent momentum came amid Coinbase’s IPO valuing the company as high as $85.8bn, a market cap higher than the Nasdaq exchange itself. Rumors on Sunday began to circulate that the U.S. Treasury intends to crackdown on digital assets as a plan to tackle money laundering.
Crude oil stabilizes around the $63 mark, the U.S. dollar unchanged ahead of central bank announcements this week and gold rose $13 to $1,776.
Global indices rallied on Thursday after surprisingly better than expected retail sales and unemployment claims data out of the U.S. Nasdaq recovered previous days losses, the S&P500 settled at fresh record highs and so too did the Dow Jones. Geopolitical tensions between the U.S. and Russia heightened after President Biden ordered fresh sanctions in retaliation for their interference in America’s elections and hacking into SolarWinds. The blacklist includes 32 entities and individuals, and 10 Russian diplomats.
In Europe, notwithstanding recent COVID-19 and vaccination concerns, rosy earning reports have kept benchmarks upbeat as they followed their American counterparts to new all-time highs. The FTSE100 advances 1% but had yet to reach back to pre-pandemic highs, lagging European markets. Asia opened mix with Australia and Japan weaker whilst Hong Kong rallied, propelled by China’s double digit quarterly GDP data.
Crude oil post 4 consecutive days of advances, rising by 50 cents yesterday to $63.30 following forecast revisions by the International Energy Agency lifting demand expectations by 230,000 barrels per day. The agency cited “fundamentals look decidedly stronger” as the main factor despite coronavirus still plaguing Brazil, Europe and India.
The U.S. dollar ended flat yesterday with gold breaking out of consolidation to settle at $1,763. Bitcoin retreats to $61,500 following Coinbase’s IPO frenzy. Despite its already high valuation, renown tech innovation fund Ark Investment has bought 246M worth of Coinbase shares thus far.
Mixed result coming out of Wall Street with Nasdaq sharply declining 1%, S&P500 lower by 0.3% whilst Dow Jones ended in positive territory. Speaking at the Economic Club of Washington, Fed Chair Powell indicated the central bank would scale back bond purchases before considering any hawkish endeavour on the policy rate itself.
Public confidence in COVID-19 vaccinations is waning in Europe as Denmark becomes the first country in the bloc to permanently suspend the use of AstraZeneca’s shot with Norway expected to announce their decision on Thursday. Amid Johnson & Johnson pausing their own roll-out, Brussels intends to fast-track delivery 50m doses of BioNTech’s COIVID vaccine in the next three months. Lack of upside scenario’s saw European benchmarks ended their sessions lower across the board.
Improving labour market figures boosted Australia’s S&P200 1.3% higher, cyclical firms positioned to benefit from the global recovery ensured the Japanese Nikkei stay in positive territory and the Hang Seng slipped 1.2% intraday.
Shrinking crude inventories beyond expectations helped boost oil prices higher by $2 to close at $62.73. Powell’s remarks yesterday put downward pressure on the U.S. dollar whilst gold fluctuates between $1,730 - $1,750.
As bitcoin retraces from $64,800 to $62,300, the first public listing of a major cryptocurrency exchange saw Coinbase Global debut at $75.9bn with an open price of $381. Shares reached as a high as $429.54 before closing Wednesday’s session at $328.28, down $14 from open. Coinbase is considered the largest digital coin exchange in the U.S. encompassing 56m retail customers.
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.
Mixed start to Asia with the Hang Seng surging 1.5% on open as officials outlined phases to curb social distancing measures from as early as April 29th. Eateries, bars, and pubs will be allowed to table up to 12 patrons on the condition that staff and customers are fully vaccinated. Weaker business confidence data forced Australia’s S&P200 lower whilst the Nikkei rallied as much as 1% intraday.
Wall Street held steady on light volumes as investors gear up for corporate earnings season ahead whilst the VIX index, an indicative of future volatility hovered at 13-month lows. Meanwhile, last night’s U.S. 10-year treasury auction was completed without a hitch in demand nor a spike in yields.
Slow distribution and new waves of infections continue to weigh down European markets. Since AstraZeneca’s vaccine efficacy had been called into question on top of the risk of severe side-effects, China’s Sinovac has seemingly become collateral damage with the state media defending the shot following a Chinese senior health expert questioning the jab’s success rate.
The yuan rallied to 6.5472 as speculation swirled that China will not be labelled a currency manipulator in the U.S. semi-annual foreign exchange report due Thursday, curtailing an already elevated geo-political tension. The U.S dollar unchanged against a basket of majors, gold fell $10 to $1,732 and crude fluctuates between $59 - $61.
Bitcoin exuberance continued Monday with the cryptocurrency hitting a high of $61,214 as Coinbase’s IPO propels bullish sentiment forward, evident from Binance coin of Binance exchange soaring 18% in the last 24 hours.
Asia-pacific stocks and overnight futures retreated on open following words of overnight optimism from the Federal Reserve Chairman. In an interview on 60-minutes Powell said the U.S. economy is at an “inflection point” with economic growth and job prospects stronger despite the risk of COVID-19.
Australia’s S&P200 slipped 0.4% as Prime Minister refrained from setting new vaccination goals after AstraZeneca’s blot clot concerns, delaying the rollout. Meanwhile, the Japanese Nikkei followed suit after Yaskawa Electric, seen as a leading indicator for the manufacturing sector, failed to meet earnings expectations.
China’s record $2.8bn antitrust violation fine on Alibaba Group spooked Hong Kong’s Hang Seng with the benchmark declining 1.4% on open. Previously turning a blind eye, Beijing as of late has stepped up scrutiny on deal-making and anti-competitive practices among technology juggernauts to ensure a chokehold on Chinese tech billionaires empires.
Ahead of reporting season, Wall Street ended Friday with 3 consecutive weeks of advances. A plethora of fiscal and monetary stimulus alongside a successful vaccination program has spurred on positive sentiment. Still, company outlook surrounding President Biden’s corporate tax hike could dent expectations. Elsewhere, the bull run across European markets continued higher despite a lagging vaccination program offsetting growth prospect. In contrast, the FTSE100 ended the session lower even though on Monday non-essential shops and services will welcome back customers as lockdown restrictions ease.
The dollar gained among a basket of majors, crude closed below $60 and gold at $1,743. Bitcoin back below $60,000 after surging to $61,000 over the weekend as investor exuberance gear up for Coinbase’s public listing, currently valued at $100bn pre-IPO.
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.
Wall Street poised to benefit from a two-prong support between fiscal and monetary stimulus as the S&P500 and Nasdaq continues to edge higher. In a White House speech on Wednesday, President Biden promoted his $2.25tn infrastructure plan as a counter against China’s increasing dominance on the global table with resistance from Republicans over planned tax hikes. Meanwhile FOMC meeting minutes reveal in the face of upgraded growth and employment projections, the central bank will remain dovish until in 2023, keeping the $120bn asset purchase program per month unchanged.
Following reviews by the U.K. and E.U. health regulators, a link between AstraZeneca’s vaccine and blood clots has now been formally determined. Findings complicate an already underwhelming vaccination program, as the most likely response would be to suspend the shot, slowing down schedules even more. News weighed by European benchmarks as many remained unchanged. In contrast, Brits are gearing up for life after lockdown with the FTSE100 gaining 1.1%.
Whilst the S&P200 and Hang Seng rallied on Asia open, the Nikkei slipped as Osaka declared a state of emergency yesterday after daily infections hit a high of 878. The services industry in Japan continue to take the brunt of COVID-19.
The U.S. dollar gained across the board as elevated treasury yields remain a juicy prospect. Crude finds support at $59, gold closes at $1,737 and bitcoin falls $2,000 to $56,000 following concerns that China could use the cryptocurrency to undermine the U.S. The theory depicts China’s preference for two global reserve currencies as opposed to just the American greenback. China’s attempt to raise the yuan into that role has thus far failed, however the global acceptance of bitcoin may fill that role.
Weak start to Asia session with most benchmarks slipping on open. Though Australia’s S&P200 gapped up 1% following Easter break, the index has retreated half a percentage point thus far during intra-day trading. Nonetheless, as the Australia government announces a travel corridor with New Zealand, the tourism industry is one step closer towards their long-awaited recovery.
Dismal household expenditure data led the Japanese Nikkei lower, giving up gains from the previous 2 trading days. Trade risk abounds with China as Japanese Prime Minister Suga meets with President Biden later in April. China’s foreign minister has publicly warned Japan to stay “objective and rational” on matters pertaining to Hong Kong and Xinjiang.
Wall Street continues to soar higher on exceptional ISM services PMI data despite a hike in corporate taxes proposed by President Biden last week and a global minimum tax on foreign profits outlined by Treasury Secretary Yellen yesterday. Biden’s plan would see corporate tax rates rise from 21% to 28% alongside a 21% global minimum tax to target tax havens.
European and UK markets remained closed on Monday whilst UK Prime Minister Boris Johnson announced easing to lockdown measures starting April 12th.
The U.S. dollar slumped against majors as Janet Yellen’s swatted away concerns for inflation and reassured investors yields will continue to remain low in the medium term. Meanwhile, crude declines $2.50 to just below $59 on the prospect of greater global supply from Iran once U.S. eases sanctions. Gold’s currently at $1,735 and bitcoin below $59,000.
Good Friday and Easter holiday leaves global benchmarks subdued if not closed for the long weekend. Wall Street futures pointed lower on Monday open after consecutive days of rallies last week following President Biden’s unveiling of a $2.25tn infrastructure spending spree anticipate to well position tech firms for future growth, especially the R&D grants and broadband upgrades.
To the east, China’s central bank sound warning bells as it urges lender to rein in credit supply by keeping new loans in the 1st quarter at or below the same level as last year. Guidelines were introduced by PBOC in the face of a 16% growth in new-loans, risking overheating the economy.
Lockdown fatigue becomes more prevalent across Europe as the bloc faces a resurgence in COVID-19 infections, a rising death toll and a disappointing vaccination roll-out.
S&P500 surpasses 4,000 for the first time in history as investors digest President Bidens’ 2.25tn stimulus plan. Tech continues to react overwhelmingly climbing another 1.5%, eyeing the large, proposed investments in R&D and broadband infrastructure upgrades. Meanwhile, downward revisions in medium term inflation tempered advances in treasury yields with the 10-year note stabilizing below 1.7%.
European benchmarks followed global sentiment higher as the French CAC and German DAX settle at historic highs. Slow vaccinations and a resurgent 3rd wave remain a visible headwind ahead alongside reactionary lockdown measures weighing down economic growth. Despite this, manufacturing data out Thursday saw activity almost rebound back to pre-pandemic levels.
Barring Japan, Australia and Hong Kong markets are shut for Easter holidays. The Nikkei climbed over 200 index points intra-day after Q1 business sentiment rebounded in spite of the state of emergency during the period.
The dollar index weakened, however of particular interest is the Turkish Lira. The currency surged 1.7% after the newly appointed central bank Governor Sahap Kavcioglu reassured investors to keep a hawkish stance on monetary policy to stem inflation risk. Gold rose $22 to $1,730 and bitcoin at $59,500.
Bucking consensus, OPEC has agreed to gradually increase oil production by 2 million bpd from May to June. Pre-meeting, expectations was that member states and allies remain cautious, however post meeting notes revealed growing confidence in the current global recovery. Saudi’s Energy Minister said “Even in those sectors that were badly hit such as airline travel, there are signs of meaningful improvement”.
President Biden unveils a $2.25tn infrastructure plan tagged “American Jobs Plan” with Nasdaq welcoming the news upon arrival surging 1.6%, though surprisingly Dow Jones underperformed slipping lower. The eight-year program includes 650bn in economic initiatives like clean water and high-speed broadband, 620bn for transportation and 580bn for manufacturing. Republican opposition is fierce as the administration intends to pay for spending via tax increases. Meanwhile, Archegos Capital’s fallout has now amassed to $30bn being liquidated as Credit Suisse and Nomura brace for profit warnings and price-target downgrades by competitors.
Most European indices ended Wednesday’s session flat with investor sentiment weighed down by prevailing slow vaccine rollout and inconsistent policies. French CAC an outlier, closing in the red following President Emmanuel Macron announcing an extension to lockdown measures for four weeks ahead of Easter holiday. Though, on a positive note, both Pfizer and BioNtech released statistics suggesting their vaccines have a 100% efficacy rate for adolescents between age 12 – 15.
Coming into Asia, benchmarks cautiously drift upwards. Over 50 Hong Kong listed companies had their trading suspended as they either failed to report annual results or failed to provide sufficient filings by 31st March. Compare to last where only 9 companies were hit with trading halts.
Oil post consecutive days of declines ahead of OPEC-JMMC’s meeting today. Pre-meeting documents reveal a downward revision of global oil demand from 5.9 million bpd to 5.6 million bpd. Panel members noted that despite the acceleration in global vaccine jabs, the frequent waves of coronavirus infection persist, leading to lockdown measures and restrictions which ultimately will affect economic growth.
The dollar index retreats slightly, gold rebounds back to $1,707 alongside bitcoin of which is teetering below $60,000.
Shipping traffic resumes in the Suez Canal after the 220,000-ton Ever Given ship was finally freed after blocking vital waterways for a week. Re-floating the vessel took a fleet of tugboats, intensive dredging, a full moon, and high tides. The closure cost an estimated $10bn in global trade a day with many ships now thrown off schedules. Despite the recovery, crude surprisingly ended Monday higher, just above $61.50, positioning itself ahead of OPEC’s meeting on Thursday.
Contagion fears rife within Wall Street following Bill Hwang’s Archegos Capital Management historic margin call. Following the $20bn fire sale that sent blue-chips tumbling, both Credit Suisse and Nomura have forewarned significant losses whilst Goldman Sachs, Deutsche Bank and Morgan Stanley escaped down to the wire. Nonetheless, the fallout failed to shake benchmarks with Dow Jones hitting fresh highs. Meanwhile, Biden’s administration is looking to quickly expand vaccination eligibility after fresh reports over a new surge in coronavirus cases.
Choppy session in Europe with indices gapping lower over Archegos’s forced liquidation. However, investors came out unscathed, saved by a late session surge as the likelihood Bill Hwang’s fund is done with their fire sale improved.
Banks dragged the Japanese Nikkei 0.37% lower, further lockdowns across Australia’s Sunshine state tumbled the S&P200 down 0.8% whilst Hong Kong rallied 0.81% following a rebound in China’s market.
The U.S. dollar outperformed against exotics but mute action across majors. Gold finally broke down $18 to $1,713 after weeks of consolidation and bitcoin back above $57,000.
Praying for high tides in hopes to assist rescue teams in dislodging the 220,000 tonne Ever Given container ship. If last-ditch efforts fail, Egyptian President el-Sisi has ordered the vessel be unloaded, a time-consuming task, with implications this whole fiasco in the Suez Canal drag on for weeks. A rebound in Friday’s sessions capped the week’s end higher for both brent and crude. Some good news Monday open as headlines suggest the cargo ship has partially refloated.
Meanwhile, a late session surge saw Wall Street end in positive territory ahead of President Biden’s anticipated unveiling of his $3tn economic recovery package in Pittsburgh, Pennsylvania this week Wednesday. A $20bn fire sale by former Tiger Cub of Tiger Management, Bill Hwang initially spooked markets as his family office, Archegos Capital Management was the centre of one of the greatest margins calls of all time. Forced to liquidate substantial holdings in Chinese tech giants and U.S. media conglomerates.
European markets tagged along America’s late surge as the German Dax outperforms posting 4 consecutive weeks of gains. Despite the bloc being embroiled in slower than scheduled vaccination schedules and a third COIVID-19 wave, talks of U.S. stimulus alleviated rising risk. Elsewhere, the FTSE100 higher ahead of England easing lockdowns on Monday. Gatherings sizes are set to increase and stay at home orders replaced by health guidelines.
Cautious start to the week for the S&P200 and Nikkei, both retreating intra-day whilst the Hang Seng bucked the trend up 0.6% thus far. Currencies across the board gained against the greenback on Friday, gold continues to range around the $1,730 level and bitcoin rebounds back above $55,000.
Suez Canal blockage saga continues for a 3rd day with rescuers warning it could take weeks before container ship Ever Given is cleared. Figures thus far detail $9.6bn worth of daily marine trade alongside 185 shipping vessels in limbo. Despite international supply worries pushing crude oil above $60, the move proved temporary with Europe’s worsening coronavirus situation clouding short-term global demand outlook as prices reverted to $58.
Lacklustre demand for 7-year treasury bill spooked Wall Street only for benchmarks to recovery later in the session as President Biden boasted America’s vaccination achievements with plans to double the existing target to 200 million administered by April’s end. During the press conference Biden’s pledge to outspend China on innovation and infrastructure stoked already volatile geo-political tensions. Especially as China slapped retaliatory sanctions on the U.K. over Downing Street’s claim over Uyghur abuse. Among blue-chip’s U.S. banks outperformed following the Federal Reserve’s plan to discard pandemic-era limits on dividends.
Despite being mired in vaccination disputes overshadowing the bloc’s road to recovery, European markets followed Wall Street’s lead higher. Likewise, Asia followed through overnight momentum as benchmarks rallied on open. Though among investors there is concern over the horizon by China’s fresh drive to deleverage. More recently, resulting in a major Chinese property firm being downgrade by Moody’s as investor risk-appetite pare off in a debt-laden sector.
Though intra-day volatility was prevalent in the U.S. dollar, the index was mostly unchanged among majors. Gold continues to fluctuate between a tight range $1,720 – $1,750 whilst a collapse in bitcoin’s rollover futures saw the asset slump to $52,000.
Wall Street struggled to shake off newfound bearish sentiment as leading economic indicators disappoint market. Wednesday saw technology decline outpace cyclicals with Nasdaq down 2% whilst the Dow Jones ended unchanged. Meanwhile, before the Senate committee, Federal Reserve Chair Powell dismissed Republican lawmaker’s concern President Biden’s $1.9tn could overheat the committee and noted the market volatility we’ve recently experienced has been an “orderly” adjustment.
Mixed results across Europe with Germany’s DAX edging lower despite a reversal from Chancellor Merkel over a controversial Easter lockdown. Finger pointing begins as the EU mistaken a stockpile of 29m AstraZeneca vaccine doses as illegal shipments ready for international distribution. On the bright side, the shortage of vaccinations is seemingly resolved as Spain welcomes the news rallying 0.7%. Following an onslaught of criticism dragging into dispute that the initial efficacy of 79% utilized outdated clinical data, fresh reports by AstraZeneca reveal a slightly lower effective rate of 76% in a U.S. study.
Recent performance from the Hang Seng has been underwhelming as it corrects back to levels unseen since the start of January. China’s recent tapering does Hong Kong no favours as Beijing implements their exit strategy from pandemic-era stimulus. Elsewhere Australia and Japan rally on open.
Crude oil rebounded $3.50 to above $60.50 after one of the worlds largest container ships ran aground in the Suez Canal consider a vital trade artery. Attempts to dislodge the 200,000-ton Ever Given have failed, disrupting approximately 10% of daily seaborne trade, of which includes liquefied natural gas.
The dollar strengthened among peers, gold at $1,735 and waning demand for bitcoin see’s the cryptocurrency fall to $52,000.
Testimony from U.S. Treasury Secretary Yellen and Federal Reserve Chair Powell tempered Wall Street’s optimism from Monday. Major indices declined with blue-chips Dow Jones underperforming slipping 1% whilst Nasdaq surprisingly held its ground. Both speakers re-iterated the same message, President Biden’s $19tn stimulus plan will assist America back to full employment by 2023 and the recovery thus far has progressed quicker than expected.
On-going coronavirus woes left European benchmarks with consecutive days of decline. Yesterday, Germany announced an extension of lockdowns till April 18th as Chancellor Merkel considers more restrictive measures for Easter period. Meanwhile, AstraZeneca has been put on the defensive after an independent monitoring board claimed the drug-maker included outdated information to determine clinical trial results. The company said it will publish more data within the next 48 hours.
Hong Kong is not without its own vaccine troubles following a surprise announcement by the government to suspend BioNtech jabs this morning. The partnering pharmaceutical group Fosun had informed the government of packaging defects but believes the vaccine itself is still safe. Upon reception, the Hang Seng tumbled another 2% today alongside the Nikkei down 1.5%.
Majors fell against the dollar whilst the Turkish lira’s plunge cascades into a liquidity squeeze spilling over onto the swap market as rates soar 1,400% with investors all stampeding out of the door. Crude oil plunged 6.2% over oversupplied concerns resulting from renew lockdowns, gold weakens to $1,726 and bitcoin closes at $54,400.
Wall Street rebounds convincingly following a turbulent week with Nasdaq outperforming gaining 1.8% on Monday. Yields surprisingly calm as the 10-year treasury bill stabilises below 1.7%, despite assertions by the Federal Reserve to let looser capital requirements for banks to expire in March. Previously introduce to support money liquidity during the COVID-19 pandemic. Elsewhere, President Biden is anticipated to unveil an additional 3tn government spending package this week for infrastructure, energy, and education. The ambitious 2nd package would complete one of Biden’s pledges he was elected for in 2020.
Meanwhile, virus resurgence across Europe continue to weigh down major indices alongside a vaccine distribution schedule in doubt despite the ECB ramping up bond purchases from 18bn to 21.1bn. Reintroductions of social restriction measures have raised concerns on knock-on effects on the economy.
Mixed start across Asia with both the S&P200 and Nikkei reversing early gains, whilst the Hang Seng tumbled 1.9% on open. Growing geo-political tension hampered Hong Kong sentiment as the American, Brits, The EU and Canada imposed sanctions across multiple Chinese nationals and entity over human right abuse on Uyghurs in Xinjiang. In response, China enacted sanctions of their own.
The U.S. dollar edged lower across majors, gold closes at $1,738 and crude shores up just above $61. Bitcoin tumbles from $58,000 to $55,000 following reports that cryptocurrency fund inflows have declined 58% last week.
US – China relations unlikely to improve in the near-term after two days of negotiations ended Friday with no material concessions from either side. Especially after Thursday’s start where U.S. secretary of state and Beijing’s foreign ministers held their “tough” rhetoric hurling accusations at each other. The S&P500 and Dow Jones weakened as investors continue to digest the Federal Reserve’s meeting, while Nasdaq manage to notch itself bull territory with treasury yields holding steady.
Outlook across Europe worsen as fresh lockdowns from France, Italy, and Germany bite down growth prospects. Previous forecast had assumed a gradual easing of restrictions in March, however had since been revised to accommodate the current third wave, pushing lifting restriction towards the end of Q2. Vaccination delays also weighed on European markets with Boris Johnson pleading to other EU nations in vetoing Brussels plans to black vaccine exports to the U.K.
Asia opened upbeat as both Australia and Hong Kong rallied though the Nikkei declined 1.1%. Further clarity from the BOJ depicts plan to chip away at 6tn yen in yearly equity purchases launched 6 years away, as they deem it unsustainable.
Crude oil rebounds losses on Friday to close above $61. Last week saw volatility spike in the commodity as two opposing forces clash. Whilst an uneven global pandemic recovery drew concerns over sustained demand in coming months, Saudi Arabia’s Aramco refinery was victim again to another assault by Houthi rebels. Though the series of latest attack did not affect oil production.
Whilst the dollar index capped the week’s end higher, the Turkish lira grabbed headlines on Monday open, following the shock sacking of their central bank chief early Saturday morning. Naci Agbal has been the third governor in less than two years, appointed to fend off the country’s ever-growing risk of hyperinflation. However, last week’s surprise 200 basis rate rise irked President Erdogan’s, of whom believe there is no relationship between inflation and interest rates. The USDTRY gapped higher 16% on open.
Elsewhere, gold finds support at the $1,730 level and bitcoin finds equilibrium around $58,000 since attempts to break above $60,000 failed.
Wall Street reversed Wednesday’s gains defying the Federal Reserves’ rhetoric with 10-year yields soaring back above 1.7% to a 14-month high. Risk was further heightened ahead of quadruple witching on Friday where simultaneously expiration of varying futures and options will occur. Meanwhile, the first face-to-face meeting between high level US – China officials got off to a rocky start in Alaska. U.S. Secretary of State went on the offensive, bringing to the forefront China’s involvement in cyber-attacks, minority mistreatment and control over Hong Kong. Considering the start, expectations have plummeted for a potential Biden – Xi meeting in April.
String of cascading lockdowns across Europe spooked risk-on appetite, with France being the most recent, putting Paris and few other regions under strict lockdown for a third time. Whilst a hitch in the supply lines for the U.K. is to derail Britain’s vaccination schedule after delayed a from India. On a positive note, German, France, Italy and Spain will resume their jab of AstraZeneca’s vaccine following the EU drug regulator reiterating it’s safety.
Markets across the Asia-pacific slid following overnight U.S. sentiment. The Hang Seng down 450 index points as Hong Kong battles its 5th wave with some criticising the inhumane containment measures taken. Likewise, the Nikkei slipped 290 index points after the BOJ released its monetary policy review. Governor Kuroda attempted his best to avoid any hawkish impressions but failed nonetheless.
Alongside surging yields, demand for the U.S. dollar grew on Thursday across the board. An outlier being the Turkish Lira, appreciating 2.3% after the central bank unexpectedly raised rates by 200 basis points to 19% in an attempt to tame inflation. Crude oil tumbled over $4 to $59.47 over concerns the market is over-pricing rising demand fuelled by a global campaign to vaccinate and fiscal stimulus. Gold slipped slightly, whilst bitcoin was unchanged.
Federal Reserve Chair Jerome Powell did not disappoint amid the much-anticipated FOMC meeting on Wednesday. The central bank reaffirmed their dovish stance projecting near-zero interest rates till 2024 despite a pick-up in inflation expectations, of which the Fed deems fleeting. Economic growth was upgraded to 4.2% this year, core inflation to average 1.8% and joblessness to drop below 5%. Wall Street welcomed both the tune of the statement and the tone of the conference with the Dow Jones settling at all-time highs. Both the S&P500 and Nasdaq recovered from an intra-day tumble following a surprise comment by President Biden early session when he said Putin “will pay a price” for Russia’s attempt at undermining US 2020 elections.
U.S. sentiment seeped into European counterparts as the Euro Stoxx briefly breached into uncharted territory whilst the German Dax closed at its highest. Despite ECB President Christine Lagarde expecting a contraction in Q1, Powell’s remarks “When the U.S. economy is strong that strength tends to support global activity as well” suggests a U.S. recovery would too lift Europe out of its trough. On the vaccination front, the EU is considering blocking supplies to the U.K under emergency Covid controls calling it a “crisis of the century”.
Ahead of high-level talks between U.S. – China on Thursday, officials envision a proper meeting between President Biden and Xi a month after. Though tensions remain on a tight rope after the Biden administration sanctioned 24 Chinese and Hong Kong officials for their role in undermining autonomy in the territory. The Hang Seng fell 1.1% on the news. Meanwhile, Australia’s S&P200 edged higher on improving jobs data and the Nikkei up 0.6% during Asia session as the government announces plans to lift the state of emergency on March 21st.
Demand for the Greenback dropped sharply across the board following FOMC, gold closed higher at $1,745 and oil drifts lower as last months’ supply shock dissipates. Elsewhere, bitcoin back up above $58,500.
Wall Street treads softly ahead of FOMC on Wednesday with Dow Jones retreating from record highs and S&P500 mute. Revised optimistic outlooks from analyst for bluechips Apple and Microsoft led Nasdaq 0.6% higher whilst 10-year Treasury yields stay elevated above 1.6%. No policy changes are expected, with investors focusing in whether Federal Reserve Chairman Powell has changed his tone during his press conference, as well as deciphering changes in the tune of the central banks FOMC statement.
At least 16 EU nations have now either suspended or limited the usage of AstraZeneca’s vaccine over risk of blood clotting despite counterclaims there is no hard evidence of linkage. Even so, the EU regulator has stated overalls benefits from the jab far outweigh the risk. As the path of economic recovery from 2020’s pandemic become clearer, Europe’s benchmarks steady following dramatic gains of recent weeks, alongside support from the ECB pledging to speed up the pace of asset purchases. In contrast, increasing signs from BOE Governor Andrew Bailey depict a central bank likely to sit on their hands leaves the FTSE100 much to be desired.
In Hong Kong, social distancing will be extended till March end and snap street lockdown now the norm. The Hang Seng subdued, as is the S&P200 and Nikkei with investors awaiting the Federal Reserve meeting.
The U.S. dollar little changed among majors as was gold whilst crude oil crept lower to $64.94. Bitcoin found support at the $53,000 rebounding to $56,000 as Elon Musk officially changes his title to “Technoking of Tesla” and Tesla’s CFO to “Master of Coin”.
Economic recovery story continues to grab headlines with Wall Street taking advantage of stabilising treasury yields to surge to all-time records. Both the S&P500 and Dow Jones edged higher 0.4% and 0.3% respectively, alongside Nasdaq up 1.1% as teetering AstraZeneca problems throws Europe’s vaccination schedule in doubt and in turn the global recovery.
On Monday, following Bulgaria, Denmark, and Norway’s decision last week, five more European nations have suspended the Oxford/AstraZeneca jab including Germany over concerns the vaccine may cause blood clots. This despite reassurances from WHO urging Europe not to pause programs, iterating there’s no signs of problems. Likewise, British medical experts have asserted the shot is both “safe and effective”. Vaccination news weighed down EU indices with the Dax underperforming, lower by 0.5%.
Meanwhile, Brexit disputes back on the table as Brussels launches legal actions against the UK over breaches on Northern Ireland. Earlier this month Downing Street ease unilateral trade conditions with the Irish violating the treaty and consequently could have Britain facing trade sanctions.
Asia followed the overnight session higher as Australia rallied 74 points and Japan 190 points whilst the Hang Seng faces pressure from both political and COVID front. Hong Kong media mogul Jimmy Lai has now been imprisoned pending trial under the new national security law, President Xi warned of intensifying crackdowns on China’s tech giants and COVID outbreak saw surprise lockdowns in Mid-levels and Central.
Lacklustre news left the U.S. dollar mute, oil remains above $65, gold edged higher to $1,731 and bitcoin plummets from a high of $61,000 to $53,193 in two days.
Subdued start to Asia, as Australia, Japan and Hong Kong remain relatively unchanged preoccupied by rising long-term borrowing cost. Against a backdrop of 107 million vaccinated, a $1.9tn stimulus programmed on the way and continuing super-accommodative monetary policy, America’s S&P500 and Dow Jones ended strongly on Friday, marking consecutive days of gains. Tech yet to regain 2020 favoritism, down 0.9% as the once prevalent pandemic risk premium fades. Inflation expectations still a concern with US 10-Year yields reaching a 13-month high at 1.636%.
Mixed Friday for Europe with France and Spain indices gaining 0.7% and 1% respectively, whilst Germany unchanged. Renewed worries over a recent spike in cases across the EU bloc’s following a relaxation of restriction measures Italy, Germany, Poland and Hungry facing a new of infections. Italy’s Prime Minister Mario Draghi has already placed much of the country back in lockdown, whilst several countries have suspended AstraZeneca COVID-19 shots after doctors reported formation of blood clots among some vaccinated. Britain declared China as a state of ongoing non-compliance over the Sino-British joint declaration after Beijing overhauled Hong Kong’s election system. China countered calling it groundless slanders.
On Sunday bitcoin surpassed $61,000 before settling just above $60,000, practically doubling since the start of year and up 963% the past 12-months. The U.S. dollar index appreciated alongside oil prices and gold closes at $1,726.
For the week ahead, the Federal Reserve will convene anticipated to discuss how to manage rising yield expectations. Likewise, the Bank of England faces the threat of a sharp rise in inflation expectations after a better-than-expected vaccination program. No change expected from the Bank of Japan, though the central bank will present its review of monetary policy strategy. Turkey too will be in focus, expected to raise rates to combat a lira already appreciating 8.9% this year.
Wall Street continued momentum higher as Joe Biden formally signs the $1.9tn stimulus package on Thursday at 2 P.M. Among American benchmarks Nasdaq outperformed gaining 2% as tech closes off recent divergences with value and growth. Meanwhile, the President softened U.S – China rhetoric ahead of next week’s face-to-face meeting between the administrations Secretary of State and Beijing’s foreign minister. Both sides are hoping to avoid looking weak whilst simultaneously attempt to repair relations between two global superpowers.
Despite geo-political steps in the right direction, the Hang Seng fell 0.85% following a coronavirus cluster on Hong Kong Island. Already more than 240 people have been sent to quarantine with authorities expecting about 60 new cases from the outbreak linked to a super-spreader at a popular gym. In contrast, Australia’s S&P200 edged higher and the Nikkei up 1.3% on economic optimism.
Whilst the German DAX lagged, remaining European indices posted consecutive sessions of gains following the ECB’s reiteration of their dovish stance. The central bank president Christine Lagarde noted they would use the 1.85tn quantitative easing program more generously over the next months to counter yield tightening.
As treasury yields steady near 1-year highs, demand for the U.S. dollar falters. Crude just below $66 and declining favourability for gold sees the precious metals edge lower to $1,722. Bitcoin resumes its meteoric rise, briefly reaching beyond $58,000 intraday.
Wall Street’s S&P500 and Dow Jones rose after President Biden’s $1.9tn coronavirus relief package passed its final hurdle in the US House of Representatives. All but one Democrat voted in favour, whilst all Republican’s voted against ending the final tally at 220 to 211. Weaker than expected core CPI data also eased concerns of a potential overshoot in inflation. Though, the U.S. yield curve steepened to a trajectory unseen since 2015 as American household expenditure is expected to receive a boost from a $1,400 direct payment, a $300 top-up in unemployment benefits, $350bn in local and state aid as well as tax credits for children.
Ahead of the ECB’s press conference today, European benchmarks posted consecutive days of gains with the STOXX and DAX reaching back to pre-pandemic levels. Across the channel, the FTSE100 remains mute following Tuesday’s annual budget release whilst the EU – UK vaccine spat intensifies.
Mixed start across Asia as Australia’s S&P200 tumbles despite the government announcing subsidies to air travel to boost tourism. The Nikkei edged higher and the Hang Seng outperformed after the U.S. Secretary of State and China’s foreign minister confirmed both sides will meet in Alaska next week to begin talks surrounding sanctions, tariffs, and miscellaneous diplomatic matters.
U.S. dollar demand dimmed following disappointing inflation data. Both crude and gold rose slightly whilst bitcoin once again soared above 57,000, just another thousand dollars shy from breaking all-times.
Supposed short-covering fuelled Nasdaq’s 3.7% rebound yesterday altering the prevailing theme of a value/growth rotation to just a market correction story. Meanwhile as treasury yields pull back after reaching pre-pandemic levels, the S&P500 posted a +1.1% day whilst the Dow Jones remained mute. Once President Biden signs the $1.9tn pandemic relief bill, the White House is anticipated to unveil their “build back better”, a long-term economic stimulus package. However, unlike the current bill, Biden faces an uphill battle as one dissenting Democrat Senator from West Senator has warned the administration to put in more effort in ensuring a bi-partisan support as oppose to steamrolling through preceding’s.
A very angry public row between the EU and UK regarding COVID-19 vaccine distribution saw PM Boris Johnson denounce Brussels accusations that the UK imposed an export ban “an outright lie” and “any references to a UK export ban or any restrictions on vaccines are completely false”. Thus far, the EU bloc has only averaged 9.4 doses per 100 residents whilst the US and UK a respective 27.8 and 35.2. Geo-political strife weighed down the FTSE100 whilst European benchmarks posted their 3rd consecutive days of gains.
In Asia, Australia’s S&P200 loss ground despite attempts by the RBA to push back current expectations amid the Australian Financial Review Business Summit. Central bank chief Philip Lowe said “over the past couple weeks market pricing has implied an expectation of possible increases in cash rate as early as late next year…this is not an expectation that we share”. Elsewhere Japan edged 0.4% lower and the Hang Seng down 0.8%.
Bitcoin climbs back to $55,800 today on the back of further purchases from MicroStrategy and Meitu defying recent criticism from former Citigroup Chief Economist likening the cryptocurrencies nil intrinsic value to Schrodinger’s Cat.
Most majors gained against the U.S. dollar, crude retraces back to $64 after hitting a high of $67.94 on Monday and gold bounces above $1,700.
Rotation out of tech in favour of companies well positioned to benefit from President Biden’s 1.9tn stimulus perpetuated the biggest divergence between the Nasdaq and Dow Jones Industrial Average since 1993. Tuesday saw valuation on Nasdaq tumble another 3% whilst the Dow rose 1% to all-time highs. Meanwhile, Treasury Secretary Yellen continues to bat away speculations additional pandemic relief will cause an eventual inflation problem, citing a lethargic labour market persist.
In contrast the the West, the National People’s Congress saw Beijing announce goals to undertake both fiscal and monetary restraint in 2021 following a successful rebound from economic calamity. Despite vulnerability from rising yields, the Hang Seng has seemingly found support, rebounding from the 28,500 level the past 3 trading days. Elsewhere, the Japanese Nikkei edged higher following supporting sentiment from the BOJ. The deputy governor reiterated a dovish monetary stance whilst reassuring investors the central bank stands “nimble” to counter changing market conditions.
Reflationary trade boosted Europe’s benchmarks higher, especially with the German DAX settling at record highs. Automobiles and banks outperformed on the prospect of returning to normality.
The U.S. dollar gained for 3 consecutive days with the Turkish lira in focus depreciating 2.9% yesterday. Concerns are rising as the central bank continues to shy away from further interest rate hikes. Oil resumed lower after a failed attempt to disrupt Saudi Arabia’s production facility. Crude fell back below $65 in anticipation of U.S. stockpiles as refineries resume operation from the unprecedented arctic storm.
Following a very public endorsement from Norwegian oil billionaire Kjell Inge Rokke, bitcoin surged to $54,000. Norway’s second richest stated, that bitcoin can “become the core of a new monetary architecture” and one day “be worth millions of dollars”.
President Biden is on the cusp of securing his first major political victory since being elected as the U.S. Senate on Saturday voted to approve the 1.9tn stimulus. The package now awaits a final greenlight from the House of Representatives on Tuesday before the legislature is signed by the president.
Asia began with heavy selling pressure as global indices and futures tumbled on opened. Whilst fiscal relief herald’s greater economic recovery prospects, so too would it reignite current angst surrounding the prevailing government bond sell-off alongside risk of overshooting inflation. Both Australia’s S&P200 and Japanese Nikkei fell 75 and 586 index points thus far respectively. The Hang Seng is set to close at a monthly low. Meanwhile, the increasing geopolitical tensions between US – China does Hong Kong no favors. Recent rhetoric from a top Chinese diplomat warned Biden’s administration to stop “playing with fire” in China – Taiwan affairs.
Wall Street benefited from a rebounded last Friday as investors sought value amid the intensifying equity sell-off. Nonetheless, benchmarks still ended the week in negative territory with the Nasdaq suffering 3 consecutive weeks of declines. In contrast, European indices performed exceptional with the French CAC closing at yearly highs and the German DAX 74 points shy from its all-time high.
A series of attacks on Saudi Arabia’s most protected oil facility on Sunday, Saudi Aramco at Ras Tanura, sent crude prices above $67. The terminal accounts for 7% of global oil supply, approximately 6.5m bpd. Iranian-backed Yemen Houthis has claimed the attacked, albeit the missile and drone barrage resulted in minimal damage such that production was unaffected.
From a low of 89.44 back in January to 91.98, the U.S. dollar index recovers back to levels seen in December. Though yields are surging across the globe, U.S. Treasuries far outpace that of developed counterparts. Luring demand for the American greenback. Gold managed to regain the 1,700 level and bitcoin back to $50,500.
Words of reassurances from Federal Reserve Chairmen Jerome Powell falling short on definitive policy actions left Wall Street jittery. Following Powell’s remarks, 10-year Treasury yields immediately spiked to 1.57% whilst US benchmarks rolled over with Nasdaq ahead in declines down 2.11%, the Dow and S&P500 losing just over 1% in market cap. Amid Wall Street Journal’s online forum, the Fed Chief stressed their “current policy stance is appropriate” and will remain “patient”.
The opening session of the National People’s Congress saw China set a conservative growth target above 6% whilst economist consensus predicts 8.4% for 2021. Meanwhile, President Xi revamps Hong Kong elections with a twist. Calling for “patriots” to run and limiting opposition parties from winning public office. Across to the west, Biden’s administration re-affirmed their tough stance towards China though recent polling found only 53% American believe the President will pull through. The Hang Seng initially gapped lower by 3.8%, however has since recovered back throughout Asia’s session.
Yield woes continue to push European markets lower and likewise Australia’s S&P200 and the Japanese Nikkei suffered the same fate.
OPEC’s meeting concludes with a surprise no-action, boosting crude above $64. Given the recent rise in crude oil prices, investors anticipated piecemeal steps towards ramping up productions to cool an overheat asset, especially as China’s fuel consumption recovered to pre-pandemic levels. However, was instead met with unanimous agreement to hold steady current levels.
Founder of Kraken exchange Jesse Powell failed to stem Bitcoins’ recent slump as the cryptocurrency hits $47,000 intra-day. In a Bloomberg TV interview, the CEO speculated bitcoin could reach $1 million within a decade and that “you have to have conviction to hold”.
Alongside rising bond yields, demand for the U.S. dollar surges amongst majors with the likes of the USDJPY settling above 108.00. Elsewhere, gold post consecutive days of losses, closing below $1,700.
Rekindled concerns in global Treasury markets saw Wednesday yields resume last week’s endeavours, dragging broad-based benchmarks lower. 2021 began with revisions of a bigger than forecasted economic recovery, turned into fears of overshooting inflation and now a risk of liquidity drying up. Recent Treasury auctions saw little demand from secondary participants with primary dealers forced to pick up 40% of the sale, unseen for 7 years.
Mixed messages from various central bank members across the global have done no favours. Opinions differ from the ECB having flexibility to act if yields from the real economy to the Chicago Fed’s view that the recent rise was healthy. Investors hope Powell will offer some clarity when he speaks about the state of the American economy before a virtual summit hosted by Wall Street Journal.
Among Wall Street, Nasdaq continues to unperformed, down over 3% as the rotation out of tech intensified in favour of cyclicals set to benefit from Biden’s 1.9tn stimulus arrangement. Though the legislative bill did a hit snag yesterday. With a Senate floor split 50-50 and Republicans united, two vocal Democrats have argued for the package to be more targeted. Elsewhere, European indices fell flat whilst the UK’s Chancellor’s budget deliver failed to stoke enthusiasm in the FTSE100. Asia extended overnight sentiment with Australia, Hong Kong and Japan tumbling lower.
The price of gold continued to be under pressure near the 9-month low but rebounded to around $1,702. Despite signs of an inventory build up and OPEC anticipated to curb production restraints, crude oil still surged above $61. Meanwhile, bitcoin fails to sustain above $50,000, falling back down to $49,500 this session.
The closing of major currencies on March 3:EUR/USD closed at 1.2062; GBP/USD closed at 1.3948; AUD/USD closed at 0.7772; USD/JPY closed at 107.01; USD/CAD closed at 1.2656; USD/CHF closed at 0.9198. All in all, the greenback gained, hitting a 7-month high against the Japanese yen along with a 3-month high on the Swiss franc.
Wall Street latched onto bubble warnings from China’s Chairman of banking and insurance commission, driving broad-based benchmarks lower across the board. Guo Shuqing comment he was “worried the bubble in foreign financial markets will one day pop” pointing to ultra-loose monetary policy in US and European markets resulting in a divergence with the real economy. Bank of America echoed similar concerns as their proprietary contrarian indicator revealed Wall Street near extreme bullishness.
Meanwhile, reassurances from several ECB officials prevented losses on Europe’s indices. Board member Fabio Panetta remarked on the recent spike in Treasury yields “is unwelcome and must be resisted”. ECB Vice-President Luis de Guindos echoed similar sentiments, sounding the bank has “the flexibility that is needed in order to react” should any unwarranted yield levels undermine the economy.
Mixed start in Asia with the S&P200 and Hang Seng rallying 0.6% and 1.6% respectively on open. The Nikkei remained unchanged weighed down by Tokyo’s Governor Yuiko Koike requesting an extension to the coronavirus state of emergency.
Gold touched on an 8-week low before recovering to end in positive territory at $1,738. In the face of rising yields, appeal for a non-interest paying asset has been lacklustre as well as increasing competition from the likes of bitcoin seen as a better alternative to hedge inflation risk.
Among majors, the U.S. dollar has become less enticing as long-dated Treasury yields have now reached back to pre-pandemic levels. Crude dipped below $60 after the American Petroleum Institute reported a build in inventories. And bitcoin fluctuates around the $49,000 level.
Following a turbulent week of volatility, the main focal point on Monday was Australia’s RBA intervening for consecutive days via doubling the size of regular bond purchases to $4bn. The decision has broader implications globally among central banks willing to step in and halt any fundamentally divergent selloffs. Evident last Thursday when ECB Chief Economist said the bank “will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions”.
With investors shaking off concerns, Wall Street soared as the S&P500 post its biggest single day gain since June 2020 whilst the Nasdaq outperformed among the basket, gaining 3.2% for the session. President Biden’s 1.9tn stimulus now awaits a Senate vote, expected to be held Thursday this week.
Likewise, ahead of Finance Minister Rishi Sunak budget statement on Wednesday, the FTSE100 regained 1.8%. An anticipated 300bn pounds for COVID-19 relief is expected to be announce in additional to tax cuts. Meanwhile, newly released vaccine data from Public Health England provide glimmers of hope for Europe’s infection dilemma. Both Pfizer or AstraZeneca has found to reduce hospitalization rates among people aged over 70 by around 80% as well as reducing the chance of infection by 60%.
Coming into Asia, bubble warnings spooked markets after yesterday’s optimism with Australia’s S&P200 slipping 1% and the Nikkei off by 2%. Hong Kong’s overhaul of the Hang Seng failed to stifle the index’s decline, down 1.3% also. China Banking and Insurance Regulatory Commission Chairman Guo Shuqing at a briefing was heard saying he was "very worried" over the current level of international asset prices.
Bitcoin rebounds back to $50,000 after Citigroup released a bullish report drawing a case where the cryptocurrency becomes the global choice of payment for international trade. Mixed results for the U.S. dollar, gaining on the euro and pound but depreciating against commodity currencies. Crude falls below $60 ahead of OPEC’s meeting with supply increase discussions on the table. And gold down 5-consecutive days to $1,725.
Hong Kong investors today welcomed news that the Hang Seng will undergo a major overhaul. The index is anticipated to increase the number of constituents, cap the weightings of individual companies and ease listing criteria in hopes to dilute the sway of any individual stock price. Following industry consultation, concerns arose over the growing influence of mainland megacap’s on the benchmark particularly as the HKE has become the preferred destination to list.
Meanwhile, the Nikkei rallied 1.3% as the government announces ending its state of emergency early for 6 prefectures early after COVID-19 infections came under control. Leading economic indicators in housing and joblessness fuelled Australia’s S&P higher by 0.8%. Job advertisements in Australia is currently at 2 and half year highs alongside house prices recorded their biggest monthly gain in 17 years, soaring 2.1%.
Friday saw Nasdaq hold a previous support level at 12,800, whilst elevated Treasury yields continue to impact cyclical firms weighing down the S&P500 and Dow. Bond jitters did not spare U.K and European counterparts. The FTSE100 underperformed among the lot, declining 1.4% .
Nonetheless, optimistic news over the weekend with the Democratic-controlled House passing President Biden’s $1.9tn additional relief aid. The bill now awaits a Senate vote, where the floor is currently split 50-50 between Democrats and Republicans with the Vice-president casting the tie-breaker vote.
Since reaching an all-time at $58,354 back on February 21st, bitcoin has fallen 26% touching $43,165 on Sunday. Elon’s tweet “That said, BTC & ETH do seem high lol“ which initiated the decent remains on Twitter.
The US dollar index extends its advance against majors as investor’s pull speculation closer that the Fed could turn hawkish as early as next year. Crude still above $62, though gold tumbles $36 to $1,734
Surging Treasury yields unnerve risk appetite as Wall Street sees mass exodus in market exposure. The 10-year yield spiked to 1.6%, a 1-year high following exceptional U.S. jobs data indicating an economic recovery is gaining speed. In turn, yesterday’s Treasury auction received a sub-par participation rate further fuelling rising rates. Rotation out COVID-19 beneficiaries towards companies set to profit from Biden’s 1.9tn stimulus package saw Nasdaq tumble 3.6% whilst similar counterparts suffered only 2.5% losses.
European indices fared no better suffering from a yield curve steepening situation of their own. Pharmaceutical company leaders were put through the ringer on Thursday as EU legislators voiced their frustration over vaccine exports to the US and UK. As a result, the pace of the EU immunisation campaign has thus far been lacklustre. The current inoculation rate stands at 6.6 shots per 100 residents when compared to 20.1 and 28.3 with the US and UK.
Overnight risk-off sentiment contagion spread throughout Asia as benchmark continues U.S. declines. So much so, Australia’s central bank had stepped in today to make an unscheduled $3bn purchase in 3-year government to suppress flare up in yields. Nonetheless, the S&P200 still declined 98 index points, the Hang Sang gapped 1.6% down on open and the Nikkei lower by 1.9%.
Bitcoin heads towards one of the worst performing weeks, down 20% so far. Initially set off by Elon Musk’s tweet suggesting prices are too high, the premium held on top of the cryptocurrencies decentralized status is evaporating.
Favourability returns to the U.S. dollar gaining against a basket of majors as investors position for yield. Crude oil remains unaffected settling at $63.40, though gold declined sharply to a previous support level at the $1,760 mark.
Second day of testimony by Jerome Powell, saw the Federal Reserve Chairmen nip elevated inflation risk in the bud. Powell emphasized “policy is accommodative because unemployment is high and labour market is far from maximum employment” whilst rising inflation does not equate its persistency towards the medium term.
A sigh of relief on Wall Street with investors welcoming the Fed’s remarks as the Dow 30 surges 1.4% into all-time highs. Meanwhile, the Treasury market is not buying it with the 10-year yields edging to a 1-year high at 1.39%. Whilst the U.S. dollar depreciates against a basket of majors like the AUDUSD, up 56 pips and just a touch below the 0.80 level.
Benchmarks across Europe ended in positive territory with the French CAC outperforming to levels untouched since 2020 February. Breaking news from Moderna revealed the first vaccine designed to target the South African variants with clinical trials set to begin in coming days. Elsewhere, overnight sentiment seeped into Asia as indices cautiously pointed higher.
In focus today, the Turkish Lira slipped as much as 1,466 pips intra-day following the central bank’s less hawkish decision to increase reserve requirements as opposed to an outright increase in policy rates. Investors fear pressure from President Erdogan, whom is of the belief rate hikes is an inappropriate course of action in fighting inflation, is overshadowing the bank’s decision making.
Following a no-change rate decision, the New Zealand government has announced the RBNZ will now consider house prices as an additional objective to monetary policies. The government hopes to reign in on the booming housing market which has seen 8 consecutive monthly increases averaging 2.2% a month. In response, the Kiwi rose 96 pips to 0.7435 as investors push forward more hawkish expectations.
Crude higher to $63.40, gold unchanged and bitcoin bounces back above 50,000.
Words of reassurance from Jerome Powell fuelled an intra-day bounce back but not before benchmarks notched declines as low as 3.5%. The Federal Reserve Chairmen pushed back risk of overshooting inflation, citing “monetary policy is accommodative, and it continues to need to be…until we [The Fed] make substantial further progress towards our goals [full economic recovery]”.
Whilst Powell’s remarks echoed across Europe, a third wave of coronavirus in Central Europe weighed in investors sentiment. Despite an on-going vaccination program, cases have spiked in the likes of Hungary, Poland, Serbia and Slovakia with a concerning portion of infection arising from either the British or South African variant. A rotation outside tech in the German DAX, further weighed down Euro Zone indices.
Local media reports that the Hong Kong Exchange and Clearing would increase stamp duty on transactions spooked the Hang Seng lower by 2.5%. Elsewhere, Australia’s S&P200 lost all grounds gained from yesterday and the Nikkei down 1.2%.
Following a tumble down to the $45,000 on Tuesday, bitcoin rebounds back above $50,000 after central figurehead Cathie Woods from Ark Investment appeared on Bloomberg noting she was still “very positive on Bitcoin” and “very happy to see a healthy correction here”.
Ahead of Powell’s day 2 testimony before the House Financial Services Committee, the US dollar steadies itself among majors. Crude oil corrects to $61 after briefly touching $62.94 and gold unchanged.
Wall Street echoes Monday’s losses as inflation expectations continue to rise alongside a potential commodity super cycle in the making and its impact to the real economy. Broad rally in metals saw the likes of copper soar to $9,000 a metric ton, a 9-year high. Rotation out of big-tech left Nasdaq underperforming suffering a 2.8% decline as the premium held during the pandemic subsides.
UK’s FTSE100 up 0.5% as investors celebrate PM Boris Johnson’s four-step road map to ease all social restrictions by mid-June. Meanwhile, to ensure the economy does not double dip, Chancellor Rishi Sunak will extend the governments coronavirus furlough scheme into Summer. Across the channel, European benchmarks were buoyed by remarks from ECB President Christine Lagarde whom said the central bank has a close eye on the current upward trajectory in bond yields. Alluding to potential intervention in the future.
Value-seeking in Asia spurred Australia’s S&P200 to rally 72 index points on open. Largely benefiting from booming commodity prices. Likewise, the Hang Seng gained 1.9% with the Hong Kong government budget deficit set to hit record highs following cash handouts to households and businesses.
Much like how Elon’s tweet propelled bitcoin to records and the subsequent adoption into Tesla’s balance sheet. Elon’s hubris, tweeting prices of Bitcoin “do seem high” pulled the rug beneath the cryptocurrency’s feet as it tumbled from an intraday high of $57,646 to $47,476 within minutes.
Ahead of Jerome Powell’s testimony before the Senate Banking Committee, the U.S. dollar hits a 1-month low in anticipation the Fed Chair would reassure that the central bank will tolerate above norm inflation levels before considering hawkish endeavours. Gold rebound banks above $1,800 whilst crude hits $62.50.
Inflation rhetoric back on the menu with Wall Street broad-based benchmarks ending the week lower. Whilst expectations see a combination of vaccines and additional stimulus spurring on a global economic recovery, worries remain over runaway inflation halting progress. Especially as the 10-year Treasury yield climb to 1.39%, a 1-year high.
Buoyed by upbeat quarterly earnings, European indices defied global sentiment to post positive gains. Confidence was further reassured by immunization data coming out of Israel, depicting Pfizer’s COVID-19 shot at effectively curbing transmission of the virus. Meanwhile the UK’s FTSE100 slipped just under 20 index points. Nevertheless, good news ahead as PM Boris Johnson is expected to lay out plans on Monday regarding the easing of social restrictions.
Cautious start across Asia with Australia, Japan and Hong Kong failing to hold their initial rallies on open. This despite a report released by Deloitte surveying Australian CFO’s, 72% of whom feel optimistic for 2021 and vaccinations moving ahead of schedule as PM Scott Morrison were among the first patch to receive the shot. Likewise, announcement out of HSBC reveals executive relocation to Hong Kong this year as the global bank see’s the special territory as the future epicenter of revenue.
Bitcoin notches new highs over the weekend to record 58,354, gaining just under 20% last week, approximately doubling its value since the start of the new year and topping $1tn in market capitalization. The cryptocurrencies rise in value came alongside mainstream acceptance of utility as an alternate form of payment.
U.S. dollar loses risk-on status as the Greenback retreats on Friday alongside an increase in global yields. Early Asia session saw the Kiwi dollar soar 50 pips to 0.7338 on the back of rating firm S&P rewarding New Zealand efforts in successfully containing COVID-19. And subsequently ensuring a faster economic rebound among developed nations. Crude oil fell back below $60 as arctic storm passes Texas with refinery production is expected to restart this week.
Overnight concerns of a fragile recovery reverberated across Asia rattling investor risk-appetite. Early morning retail sales figures from Australia cemented worries after substantially missing market consensus. Consequently, the S&P200 tumbled as much as 1.5% intra-day. With the $80bn stimulus scheme scheduled to be scrapped in March, Aussie’s will have the rug pulled out from under. Elsewhere, the Japanese Nikkei and Hong Kong’s Hang Seng followed suit, edging lower.
Wall Street nurses another day of losses after an unexpected spike in unemployment claims despite the expectations stimulus checks from the previous administration would buoy a lethargic labour market. Upon release, the Nasdaq again underperformed, declining as low as 1.6% before recovering ground by sessions end following Treasury Secretary Yellen on CNBC defending the need for the $1.9tn pandemic package.
Third day of losses out of Europe. Vaccine hope against the new variant out of South Africa was dented after further trials revealed Pfizer’s jab as significantly less effective. Disappointing headline corporate earnings alongside ECB minutes depicting weary policymakers over the euro’s strength hitting exports further weighted down benchmarks.
Crude oil took a dive from $62 to $59 as the National Weather Association warns extreme weather conditions will not only remain through next week bringing “significant ice accumulations and heavy snowfall” but also extend towards the East Coast from Texas. With refineries shut, U.S. production capacity is now at 60%, equivalent to a loss of 4 million barrels a day.
Weak economic data saw majors gain against the U.S. dollar. Meanwhile gold held its level at $1,772 and profit taking in bitcoin left the cryptocurrency just below $52,000.
Volatile session across Wall Street, tumbling on open but subsequently recovering as investors juggle between exceptional retail sales figures, prospect of runaway inflation and an economic fallout from subzero snap freezes. Among the lot, Nasdaq again underperforms slipping 0.5% intra-day.
Sentiments across Europe fared no better as indices pulled back for two consecutive days. Yesterday, the European Commission announced a deal to triple its orders equivalent to another 150m doses of Moderna’s shot. However, a shortage of giant sterile liners, necessary in producing the COVID-19 jabs threw a wrench in the Euro zones mass vaccine distribution campaign.
Business as usual for China, re-opening following Lunar New Year Holidays. Mixed start across Asia though with Australia’s S&P200 holding steady, the Hang Seng declining 311 index points and the Nikkei following suit, down 136 points.
Crude extends momentum further briefly touching $62 as the U.S. oil industry buckles under continuing arctic weather. Temperatures worsened again on Wednesday in Texas, considered the largest U.S. oil producer by far. Whilst much of oil producing States shield their operation amid extreme weather conditions, Texas had failed to make sufficient investment in weatherproofing facilities knocking out half of production. Meanwhile gold capitalizes another day of losses ending the session lower at $1,776. Despite the precious metal’s duality as both an inflation hedge and risk haven asset, the latter characteristics has thus far outweighed the former. Continuing signs of economic recovery has left gold out of favour after hitting $2,072 back in August 2020.
The U.S. dollar becomes an ever-enticing opportunity broadly gaining against majors on Wednesday. Long dated Treasury yields still a main driver of this risk appetite. Elsewhere, bitcoin defies nay-sayers, breaking past $50,000 and settling at above 52,000 by session end. Reflecting an almost inevitable future whereby the cryptocurrency is adopted by corporations.
Energy crisis across the U.S. deepens leaving 5 million Americans without electricity amid unprecedented weather conditions. Volatile session for crude hitting a low of $59.33 on Tuesday but emerging beyond the $60 level by the end of the day. As the economic drag is being tallied, production output has now fallen by 3.5 million barrels a day, a 31% decline. Nonetheless producers are optimistic to begin normalizing production starting this weekend.
Rising yields takes its toll on Wall Street with 10-year Treasury at it highest since pre-COVID-19 pandemic back in February 2020. U.S. benchmarks retreated from their record highs with Nasdaq underperforming declining 1%. The arctic blast has also impeded schedule disrupting coronavirus vaccine distribution in some parts of America.
Meanwhile, European markets followed global sentiments lower. This despite, Treasury Secretary Yellen committing to boosting transatlantic cooperation with the EU. Including “ending the pandemic, supporting a strong global economic recovery, fighting income inequality, and…addressing the threat of climate change”.
Mixed results coming into Asia with Australia’s S&P200 and Japan’s Nikkei recovering from an intraday tumble, whilst the Hang Seng soars 1% ahead of government plans to roll back social restrictions on Thursday.
With U.S. yields increasing, favourability returns to the American greenback as it appreciates against a basket of majors yesterday. Best performing on the USDJPY, up 4 consecutive days equivalent to 146 pips. Elsewhere, gold falls below $1,800 to $1,794. Another day, another attempt at an all-time high with bitcoin attempting to break past $50,000 reaching $50,548 but failed to retain momentum and closed at $48,500 at session’s end.
First trading session following Lunar New Year see’s the Hang Seng hit a 32-month high to above 30,600. Hong Kong is expected to ease social-distancing rules on the 17th February, much to the relief of small businesses, particularly restaurants who can now remain open beyond 6pm. Meanwhile, the Japanese Nikkei rockets past 30,000 for the first time since 1990, gaining 3.5% in 2-days. Japan is expected to initiate vaccination programs this week with broader optimism reflecting a strong economic rebound from COVID-19. Japanese Finance Minister Aso, further reassured investors during the G7 summit, agree with U.S. Treasury Secretary Yellen that now is not the time to withdraw fiscal support.
Monetary meeting minutes released today by the RBA boosted Australia’s S&P200 into positive territory. “Members concluded that very significant monetary support would be required for some time…before the bank’s goal for inflation and unemployment were achieved”.
As Americans celebrate U.S. President’s Day, futures on Wall Street pointed higher, ending Monday’s session at all-time highs. President Biden plans to take his first official tour visiting Milwaukee, Wisconsin in bid to appeal to public opinion, pressuring Congress in speedily passing the $1.9tn stimulus package. Elsewhere, recovery speculation fuelled European markets to a 1 year high. Though recent leading indicators revealed a contracting industrial sector, investors clang onto hope a global recovery would drag Europe out of its current dire predicament.
Crude oil continues to trade above $60 a barrel as extreme weather conditions wreak havoc on supply lines. Amid already sharp cutbacks from OPEC, oil production in the Permian Basin has fallen by 1 million barrels a day with temperature reaching sub-zero. Refineries also took a hit as on Monday the largest U.S. oil refinery shut down entirely.
The US dollar index weakens, as major counterparts such as the British pound surges above 1.39, unseen since 2018. Gold edges lower to $1,818 and bitcoin reattempts 50,000 only to fail reach a high of $49,920.
Despite bank holidays in China and U.S. as they celebrate Lunar New Year and President’s day respectively, Australia’s S&P200 continued Friday’s overnight U.S. momentum surging as high as 0.8% on open. The Aussie market upbeat as earning season cranks up a notch this week with 10 of the largest blue chips anticipated to revise their 2021 outlook higher amid March’s vaccination roll-out. Following suite, the Japanese Nikkei posted a 1.2% intraday gain of their own. Morning preliminary GDP figures revealed a more resilient economy emerging out of the pandemic than previously forecasted. Both household and corporate spending continue to lift as well as international trade.
Wall Street ended last week on a high. Words of reassurance from Janet Yellen amid her first G7 meeting had the U.S. Treasury Secretary voice among the rest of her G7 counterparts that “the time to go big is now” on fiscal support for 2021. On a fading note, the 45th President Donald Trump was for a second time acquitted from impeachment. Though the final Senate vote was 57 guilty to 43 not guilty, a super majority of 67 guilty votes was required to convict.
UK and European benchmarks reversed intra-day losses on Friday, as investors clanged onto the ever-improving progress of Joe Biden’s $1.9tn stimulus package. Relief was also found in the World Health Organisation, of whom are expected to approve AstraZeneca’s coronavirus vaccine as early as today for worldwide use for all adults.
The reflation trade has the U.S. dollar index settle near the week’s low. Following a brief intermission in the last 3 days, the Singaporean dollar was back on track towards the 1.3200 level. The nation had suffered its worst annual economic contraction since independence. However, confidence returned on Monday with the Ministry of Trade and Industry releasing a projected economic rebound between 4% - 6% in 2021. Gold steadies at $1,824 whilst crude resumes its parabolic rise to above $60 as an artic blast dominates parts of the U.S, freezing oil pipelines.
Weekend action saw bitcoin on the verge of hitting $50,000 only to pull back down to $47,000. The cryptocurrency had recorded an all-time high at $49,694 and up 70% since the start of the year. With its recent rise fuelled by speculative action from Wall Street and the almost inevitable adoption by main street corporations as an alternate form of payment.
Subdued start in Asia with Hong Kong markets closed for Lunar New Year. Authorities urged millions of people in restraining festivities amid 21 new infections confirmed on Thursday. Meanwhile Australia’s S&P200 trickles down 35 index points following the state of Victoria announcing a snap 5-day lockdown in response to cases testing positive for the hyper-infectious UK strain. Separately, holiday lull also relieved Japanese investors from risk-on appetite as the Nikkei remains relatively unchanged.
Increasing geo-political confrontations between US – China tempered the S&P500 and Dow from any gains on Thursday. Though Nasdaq did manage to crawl into positive territory and in turn record another all-time high. Following Joe Biden and Xi Jinping’s 2-hour call for the first time since taking office, the US President outspokenly told reporters that China will “eat our lunch” if America does not spend substantially on infrastructure.
Corporate earnings kept European markets abuzz. Both the STOXX and DAX gained 0.8% and 0.6% respectively whilst the UK’s FTSE100 underperformed. Concerns are growing over UK’s variant strain. A study last week by AstraZeneca in South Africa revealed a significantly lower efficacy rate despite adjusting inoculations to deal with mutations.
Crude oil breaks its momentous advance of recent weeks to below $58 after a report released by the International Energy Agency entailed global oil demand lower by 3% than in 2019. Worries were also raised that despite demand recovery in 2021 after the turmoil brought by the pandemic, production from non-OPEC nations such as Russia is expected to increase by 35% a day in the latter half of 2021.
Another endorsement, another new high for bitcoin hitting $48,969 surpassing the previous record reached from Tesla on Monday. In following the electric vehicle maker, both Mastercard and Bank of New York Mellon announced services to accommodate for cryptocurrencies. Though short on details, Mastercard revealed later in the year, clients would have the option to make purchases via crypto, whilst BNYM had formed a digital asset unit to help address needs for crypto asset demand.
Gold falls to $1,825 and mixed performance for the U.S. dollar against majors as weaker than expected claims figures see an improving but lethargic labour market.
Lacklustre inflationary pressure saw Wall Street tumble intra-day upon release only to regain some ground by sessions end. For the past days, investors have been positioning exposure in favour of upward revisions to inflation expectations. Despite Thursday’s reality check, U.S. Treasury continue to illustrate bullish signals over the medium-term as yields remain above 1%. Meanwhile, arguments by Democrat prosecutors begin today, following Trumps defence team yesterday. Chance of impeachment for the former President remains unlikely but odds are ever increasing after Senate Minority Leader McConnell surprisingly told Republicans, their votes should be a matter of conscience and not party.
European benchmarks tracked Wall Street’s decline but failed to follow suit on the subsequent recovery. This despite news from the World Health Organization recommending use of AstraZeneca’s vaccine for all adults, increasing the pace of inoculations across the Euro Area. Previously, medical experts in France and Sweden restricted its use to young adults only, concerned of insufficient clinical data.
Ahead of Lunar New Year, marking the year of the Ox, investors push Hong Kong’s Hang Seng beyond 30,000 before the indices close for the long weekend. Hong Kong is anticipated to relax social restriction following celebrations on the 17th February, in hope spur consumer spending. Elsewhere Australia’s S&P200 rallied on open whilst Japan’s Nikkei remained relatively unchanged.
The U.S. dollar index stagnated as investors contemplate softer inflation alongside the impact of an inevitable $1.9tn spending package in the coming weeks. Following Tesla’s euphoria, bitcoin settles back down at $45,000, gold rises higher by $4 to $1,843 and crude finally halts its momentous 7-day consecutive rally to settle at $58.34
Wall Street at a standstill on Tuesday as investors focus on Donald Trump’s second impeachment trial for inciting insurrection. Lawmakers debated for four hours beforehand to determine whether it was constitutionally correct to impeach an official who was no longer in office. The hearing began with prosecutors playing a 10-minute video including snippets of then President Trump suggesting to the crowds to march towards Congress and “fight like hell”. Meanwhile, reiterating Treasury Secretary Yellen’s stance, Richmond Fed President Tom Barkin told the Financial Times, Biden’s $1.9tn package would not destabilize long-term inflation and that he’s “keeping focus on medium-term expectations” instead.
Following a strong rally of recent days fuelled by Draghi’s appointment euphoria, European benchmarks retreated yesterday. The UK’s FTSE100 manage to etch out a 20-point gain on improving 2021 outlook after homebuilders revealed increasing demand. Australia’s S&P200 surged 0.5% on open, Hang Seng up 1.3% and the Nikkei recovers last sessions losses. The BOJ is expected to tweak in asset purchase program March to make it more sustainable and effective.
Bitcoin’s irrational exuberance ran its course retreating down to $46,000 after surging 10,400 points to $48,000 on the back of Tesla’s endorsement. A moment of clarity from Treasury experts illustrate an unlikely world where corporations would shift assets towards cryptocurrency. Especially the unpredictable volatility of the asset regardless of direction.
Elsewhere gold advances for three consecutive days to $1,838 on rising inflation expectations, whilst the U.S dollar continues to debase. Platinum breaks above $1,200 as supply tightens and demands surges from the global economic recovery. Ahead of inventory data today, crude oil’s upward momentum is unrelenting as it ends 7 consecutive days in bull territory.
Ever-improving economic outlook from U.S. stimulus moving closer towards a signed deal to rounding the curve in virus infection rates see’s revisions in inflation expectations. Alongside 30-year Treasury yields breaking 2% for the first time in a year, Wall Street’s bull market continues to drive benchmarks to record highs. The biggest beneficiaries being small caps whilst tech underperforms on prospects work culture returns to normalcy.
Sentiment across Europe was buoyed by M&A activity amid Japanese chipmaker Renesas Electronic Corp buying out German equivalent Dialog Semiconductor. Meanwhile, despite investors pricing out a rate cut below zero by the BOE, the FTSE100 still ended in positive territory as the UK’s vaccine schedule is well underway.
Heading into Asia open, Australia’s S&P200 was dragged lower 0.6% by blue-chip banks slashing first half profits. The Japanese Nikkei and Hong Kong’s Hang Seng took a pause with investors mulling increasing geo-political tension. Chinese efforts to bring Hong Kong more integrated with CCP values has resulted in UK dual nationalities no longer being recognized in the special territory.
Bitcoin mania overwhelms January scepticism after Tesla’s public endorsement boosts the cryptocurrency to above 47,000. Yesterday, the electric vehicle company had revealed a $1.5bn investment into bitcoin, signalling their future intent to accept bitcoin as a form of payment, much like Paypal. Elon Musk had previous added #bitcoin onto his Twitter profile stirring speculation and with Monday’s announcement, cements the electronic currency closer to a mainstream asset.
Elsewhere, the dollar depreciates against basket of majors, gold gains $16 to $1,830 as investors revise inflationary expectations and crude post 6 consecutive days of gains
Beyond volatility of recent weeks, Treasury Secretary Janet Yellen sought to reinvigorate investor sentiment on Sunday, quashing criticism the 1.9tn stimulus package would trigger above-norm inflation. Ex-Treasury Secretary and Economic advisor, Larry Summers warned the plan brought forth by Democrats entails the risk of severe dollar debasement and in turn financial instability. In response, Yellen emphasize the most concerning risk right now is failing to address existing economic impacts from COVID-19.
Monday open saw global indices and futures welcoming Yellen’s reassurance. Australia’s S&P200 rallied as high as 66 index points, Japan’s Nikkei gained 560 points and the Hang Seng gapped 0.6% higher. Nevertheless, headwinds on the horizon for Hong Kong’s asset markets. Since the start of 2021, the Hang Seng has enjoyed an appreciation as high as 10% in January. However, come Lunar New Year, the resilience of risk-on appetite will be put to the test as the China – Hong Kong trading links are halted till the end of holidays on February 17th.
Amid a relatively docile Friday despite conflicting jobs data, Wall Street still etch consecutive days of gains with both the Nasdaq and S&P500 recording new highs, again. Growth stocks remained mute, leading to Dow’s laggard underperformance.
Mixed results across European benchmarks as Draghi-led market euphoria extends gains in some whilst disappointing economic figures weigh down others. The STOXX50 managed to settle at a 1-year high, France’s CAC higher by 0.8% and likewise Spain’s indices also. Germany’s DAX was unchanged on unexpected factory orders contracting, whilst BOE Governor Bailey’s remarks during the Monetary Policy Report National Agency Briefing failed to buoy UK’s FTSE100.
Not all roses and sunshine as the American greenback returns to its risk-off dollar debasement roll following disappointing employment gains. Gold rallies $20 to 1,814 whilst twitter-fueled momentum has bitcoin back up above 38,000. Elsewhere crude above $57 posting 5 days of consecutive gains as investors increase bets on global demand recovery for 2021.
A streak of positive news propelled the Nasdaq and S&P500 to record highs, whilst the Dow lagged. Restrictions across States are easing, the Democrats intend to ram through President Biden’s 1.9tn stimulus package and Thursday employment data painted an upbeat economic outlook.
Elsewhere, additional relief measures taken by Germany buoyed European markets. Investors were further hopeful the pace of vaccinations will improve in coming weeks. Across the channel, remarks by the BOE weighed down UK’s FTSE100 half a percent. According to feedback from commercial lenders, negative rates were not well received deterring the central bank from considering such measures for another 6 months.
Overnight U.S. sentiment boosted Australia’s S&P200 and Japan’s Nikkei higher. An exuberant IPO market saw the Hang Seng gain as much as 400 index points intra-day. Video-sharing platform Kuaishou Technology, seen as an alternative to Tik-Tok, saw their debut price almost triple after a $5.3bn IPO.
Following on from OPEC+, crude oil notches higher five consecutive days to 56.43 amid reassurance from producers to restrain global supply. Saudi Arabia has shown despite unanimous agreement amongst members, they are willing to step in and offset supply increases from other oil nations. In turn, supporting market prices until a full-fledged global recovery eventuates this year.
With 10-year Treasury yields firmly situating itself above 1%, the U.S. dollar begins to shed its role as the world’s risk-off asset. Alongside an equity bull run, from 2021 January lows the American greenback has appreciated 2.6% amongst a basket of major counterparts. Meanwhile, gold crumbles below 1,800 and bitcoin closes above 37,500.
Ahead of China’s Lunar New Year holiday, selling pressure from corporates halted the yuan’s advance back above 6.47, much to the PBOC’s relief. Beijing would much prefer a stabile currency however recent international inflows from yield seekers saw the currency advance 10% in the past year.
As the struggle between Main Street and Wall Street subsides, mixed corporate earnings yesterday saw scattered results among U.S. benchmarks ending the 2-day strong rebound. Nasdaq underperformed slipping 0.7% despite Alphabet hitting record earnings, Dow edged slightly higher and the S&P500 remained unchanged. Speaking online, Chicago Fed President Evan’s reassured investors that President Biden’s $1.9tn would lift inflation via a faster recovery without overheating the economy. Joe Biden refuses to concede any grounds to reduce the $1,400 payment telling Democrats anything less would break a promise he was voted in for. Meanwhile, St. Louis Fed President Bullard cooled scepticism that markets are overextended saying prices reflect current optimism about growth.
Dragged into the frying pan, former ECB chief Mario Draghi accepted President Mattarella’s request to assist in forming a new Italian government following the collapse of Prime Minister Conte’s coalition. On top of a dysfunctional government, the country has been hit harshly by the COVID-19 pandemic. The news was received well by European investors as both the STOXX and DAX ended the day in positive territory. Meanwhile UK’s FTSE100 stayed unchanged, cautious of comments made by the BOE. Governor Bailey exuded an upbeat tone as Britain’s rolled-out it’s vaccines faster than European counterparts, alluding to a more pronounced economic recovery whilst downplayed previous comments of considering negative interest rates.
Indices pointed lower coming into Asia. Weaker all-round earnings saw Australia’s S&P200 lose 51 index points, the Hang Seng 251 points as Mainland China capital inflow eased and Japan’s Nikkei down 223 points.
The dollar crept higher on Wednesday on the back of better than expected leading macro indicators. Crude continues to notch higher, hitting $56 with reassurances from OPEC’s meeting to maintain current production policy. Gold drops to 1,833 whilst bitcoin regains popularity settling above 37,000.
Following a disappointing January, Wall Street begins February returning to a glimmer of normalcy. Short interest in GameStop collapsed from 114% to 23% yesterday as Reddit’s crusade continue to “hold the line”. The stock subsequently tumbled 74% to $90 after rallying 1,600% in January. Short sellers are estimated to have taken a $80bn hit last month. With concerns of retail volatility receding, alongside renewed progress on pandemic relief, Nasdaq outperformed posting consecutive days of gains just shy from record highs, whilst Dow lagged etching out just 1.6% yesterday. President Biden and Republicans reassured markets after “very productive” meetings these past 2 days as a budget resolution was introduced yesterday. Considered as the first step in passing the $1.9tn stimulus.
Despite lockdowns’ being extended well into the 1st quarter, Europe’s benchmarks posted gains 2-days in a row on upbeat economic data. On the coronavirus front, amid a slower than expected roll-out schedule, EU leaders like Angela Merkel have been reassuring citizens on the vaccine’s availability.
Asia-pacific indices opened following overnight U.S. sentiment, set to post 3 consecutive days of gains. Speaking at the National Press Club, RBA governor Lowe noted the central bank estimates it would take at least 3-years before the economy meet’s policymaker targets, implying rates and quantitative easing will stay accommodative for years. Elsewhere Japan’s Nikkei edged 0.56% higher driven by a boost in earning forecast.
Crude oil breaks out of its 14-day consolidation to $55. It’s highest it’s ever been since January 2020 as U.S. inventory reveals an unexpected drawdown and ahead of OPEC’s meeting, estimates reveal a global supply deficit for 2021.
Silver crashes back to reality following a chaotic Monday open briefly hitting above $30 before closing $26.68 yesterday. As anticipated by analyst, unlike GameStop weighed down by heavy short selling interest, the CBOT COT report portrayed a net-long exposure in futures and options for the precious metal.
Though risk-on appetite has returned to equity markets, the U.S. dollar index remained relatively unchanged by Tuesday close. Gold falls back down to $1,837 and bitcoins resurgence continues following Elon Musk stealthy endorsement.
Reddit triggered buying frenzy seeps into commodity markets in Asia open as silver gaps open 5% higher to $28.53. The abnormal demand apparently started from sub-forum “WallStreetBets” encouraging members to purchase iShares Silver Trust. By Friday’s close an unprecedented $944m had flowed into the ETF. Over the weekend online sellers of silver coins and bars across the globe also experienced unhinged buying. Nevertheless, skepticism over how long this retail induced pressured could last. As unlike GameStop, silver futures and options according to the weekly COT reports has been net-long the precious metals since mid-2019.
Last Friday Wall Street continued Wednesday’s bloodbath. A mix of disappointing vaccine data from Johnson & Johnson alongside anxiety induced selling resulting from the unpredictability of hivemind retail traders saw indices tumble another 2%. Questions arose whether hedge funds will need to liquidate positions to free up cashflow as buffer for short positions or whether trade restrictions on prominent brokerage platforms would hamper buying.
European benchmarks suffered a similar fate. Despite the European Commission approving a 3rd vaccine for populace use, the current pain point for many investors, is the pace of roll-out. Thus far, being sorely behind schedule.
By Monday Asia open, global indices regained some share of confidence as both Asia-Pacific indices and overnight futures pointed higher. Australia’s S&P200 posted 88 index points higher, Japan’s Nikkei 431 points and Hong Kong’s Hang Seng 488 points.
Elsewhere, the U.S. dollar index held steady on aggregate. Crude continues to oscillate between $52-$54. And gold bumps up to $1,865 following silver’s irrationality.
A smudge in an otherwise pristine recovery by China coming into 2021. Ahead of Lunar New Year, a recent uncontained outbreak in infections in Northern China has collapsed the nations domestic tourism industry. Historically much of Q1 growth, especially the services sector is reliant on the 6 days of national holidays. Monday open saw China’s yuan slip as much as 190 pips intraday.
For the week ahead, central policy makers in the RBA will deliberate on Tuesday and the BOE on Thursday. No changes on policy are expected though a focus on vaccinations and the new variants impact is anticipated.
Wall Street’s overnight bounce faded as Asia-Pacific benchmarks opened on Friday. Growing concerns over a potential cash squeeze in China saw Australia’s S&P200 chip away 144 index points. With the Australian services sector restricted by COVID-19 related measures, mining companies have thus far supported the market on the back of China’s V-shape recovery. However, as China’s short-term borrowing cost spiked back to pre-COVID-19 levels, construction activity will inherently be affected. Meanwhile, the Hang Seng fell 177 points as Q4 GDP contracts 6% whilst the Nikkei declined 647 points from end-of-month portfolio rebalancing by pension funds.
Volatile session across U.S. indices on Thursday, with a 3% daily range but gaining just under 1% into positive ground. News of the day, Main Street’s rebellion hampered by trade restrictions by the likes of Robinhood, Charles Schwab and Interactive broker preventing buying of volatile stocks. Statements released by affected brokers validated the moved as a risk management decision to protect investors.
European counterparts closed higher over upbeat earning reports, despite the EU’s vaccine tussle with AstraZeneca and continuing coronavirus restrictions. Across the channel, UK’s FTSE100 ended slightly in positive territory.
Improving risk-appetite saw the U.S. dollar edge lower. Since her confirmation, Treasury Secretary Yellen has rejected a strong dollar policy. Consequently, her remarks have opened the administration up to the possibility of currency wars claims.
Bitcoin received a boost back above 33,000 from Ray Dalio, after the founder of Bridgewater Associates called the cryptocurrency “one hell of an invention” to protect against fiat money debasement. Likewise, Reddit frenzy caused silver to spike 4.6% to $26.45 following a post encouraging people to purchase iShares Silver Trust for another short squeeze. Elsewhere crude slides but remain above $52 and gold at $1,843.
Reassurances from the Fed failed to stave off Wall Street’s dive as corporate earnings outlook raise concerns over extended valuations. This despite tech giants like Apple reporting their highest-ever net-profit quarter and Tesla topping analyst expectations. Meanwhile, Federal Reserve Chairman Powell delivered a doubled edged message yesterday. Reiterating the central banks commitment in sustaining monetary easing and dispelling rumours of tapering whilst articulating a slower US and global recovery amid a resurgence of COVID-19.
Likewise, economy-linked stocks across Europe soured with the German government slashing it’s GDP forecast for 2021 and other Euro members likely to follow to suit. The re-evaluations come amid extensions in coronavirus lockdowns. Pandemic risk was further elevated following a dispute between EU and AstraZeneca. Brussels has claimed the vaccine maker is in breach of contractual commitment by prioritizing deployment towards the UK implying delays to Europe’s inoculation campaign.
Asia-pacific benchmarks extended overnight sentiment. The S&P200 slumped 75 index points, Hang Seng declined for 3 consecutive days and Nikkei fell as much as 310 points. Japan faces deployment woes of their own, with health experts insisting local clinical trials before the scheduled roll-out in March.
Risk aversion saw the U.S. dollar gain amid the stock rout. Among majors, the euro fell 50 pips following ECB members warning the bank may consider piecemeal interest rate cuts to curb the currencies demand. Despite growth concerns, crude stayed above $52, gold edged lower to 1,844 and bitcoin bounces off 30,000 back to 31,000
Wall Street’s Dow and S&P500 remain steady ahead of Wednesday’s FOMC announcement. With COVID-19 still headlining main street news as global cases surpass 100m and Biden’s administration contemplating travel bans, Nasdaq outperformed up 0.7%. Corporate earning announcements from tech firms yesterday reveal stay-at-home companies continue to profit heavily from an otherwise dire situation.
Across the Atlantic, European benchmarks snap a 3-day decline. Though lockdown extensions still weigh heavily across investor minds, the IMF yesterday has raised their global economy growth forecast by 0.3% for 2021 to 5.5% on the basis the vaccine roll-out will promote economic recovery. Elsewhere, the FTSE100 was relatively unchanged despite the U.K. becoming the first nation to hit 100,000 deaths compared to European counterparts.
Australia’s S&P200 slips as much as 0.6% intraday on concern’s China may be cooling off. For the past months, metal prices have surged, especially iron ore to multiyear highs on the back of Chinese construction activity. However, signs are emerging Beijing will rein in on government expenditure this year considering the V-shape recovery amid 2020. Likewise, Hong Kong and Japan pointed lower during Asia session.
The U.S. dollar retreated against majors anticipating a dovish tone from Fed Chair Powell today. Crude oil hovers below $53 whilst gold closes lower at 1,850 and bitcoin finds support at 31,000.
Choppy start to the week on Wall Street as investors were whipsawed following comments from Senate Majority Leader Schumer cautioning a relief bill may not pass till March. This, despite previous reports that Democrats intend to push through the stimulus plan before Trump’s impeachment trial in February. A change in tone by President Biden, calling for open dialogue with Republicans to head off concerns that $1.9tn is too expensive further left markets anxious. U.S benchmarks tumbled as much as 2.75% intra-day before regaining ground by sessions end.
COVID-19 woes continue to persist across Europe as indices tumble on Tuesday with technology the only sector outperforming. The slow pace of vaccination remains a cause for concern alongside the new variant of which Moderna’s existing vaccine results illustrate, is only one sixth as effective as against the original strain.
Whilst Australian’s celebrates Australia Day, overnight risk-off sentiment seeped into the Hang Seng and Nikkei. Thus far, the former has fallen 560 index points and the latter 225 points intra-day. Assurance for Japanese investors though, as members of the BOJ explore more flexible options in prolonging the centrals bank’s massive stimulus program. One member has brought forth the idea of expanding ETF purchases.
The U.S. dollar gained against a basket of majors as stimulus jitters leaves risk appetite afar. Meanwhile, level headedness offsets irrational exuberance with bitcoin continuing its slide lower hitting 31,500. Crude oil oscillates between $51 - $53 ahead of Wednesday’s inventory data. Likewise, gold stalls at the $1,855.
Australia and Japan’s benchmarks pointed higher Monday open following reports on Sunday that the Democrats using their newly elected Senate majority power, intend to push through the 1.9tn stimulus plan before Donald Trump’s impeachment trial on February 8th. The Hang Seng outperformed rallying 2% as Hong Kong lifts it’s 48-hour lockdown in the city of Kowloon amid a spike in daily cases in the area in question. Over 10,000 residents were affected, with 7,000 tested during the weekend and 13 found positive.
Wall Street slipped last Friday hampered by continuing coronavirus concerns especially as retail sales drag and joblessness remains elevated. With vaccine distribution being key to a return to normalcy, Biden’ Chief of Staff conveyed, since taking office, the administration was surprised that no formal roll-out plan had been devised by Trump and his advisors.
Europe followed suit, ending the session lower. A double-dip recession is anticipated for the Euro area and UK as restrictions curb economic activity. New measures by the EU focus on hotspot area’s labelled dark red zones. Travelers to and from these areas will be required to partake a COVID-19 test and quarantine.
Pandemic gloom alongside a halt in risk appetite saw the U.S. dollar hold its’ ground among its peers. Crude oil fell a dollar closing just below $52, gold at $1,855 and bitcoin recovers back to 33,000.
For the week ahead, all eyes will be on the FOMC press conference on Wednesday. Investors are expecting further assurance from Fed Chair Powell on top of Biden’s stimulus plan. Meanwhile. the World Economic Forum begins today, with China President Xi Jinping headlining the day’s opener. Biden’s administration has taken a softer tone as the U.S. state department urged for dialogue between China and Taiwan following Chinese military planes entering Taiwanese airspace on Saturday.
America ushered in their 46th President as Wall Street welcome’s Joe Biden with record highs fuelled by prospects that looser fiscal expenditure will kick-start economic growth. In his inauguration speech Biden addressed the nation, focusing on unity and cooperation among fellow American’s juxtaposed by the 25,000 heavily geared troops guarding the ceremony. Despite gaining a majority on the Senate floor, it’s not all smooth sailing ahead. Various business leaders have vowed to lobby against planned corporate tax hikes, tight regulation and increases in federal minimum wage.
European benchmarks ended their session near intra-day highs as all eyes were on the U.S. The ECB will meet on Thursday, but no changes are expected given the expansion in bond-purchases since December. ECB President Christine Lagarde will more likely shift burden on towards governments and their fiscal policy to chart 2021’s course as fresh lockdowns impact recovery.
Asia-pacific indices pointed higher following overnight optimism. Australian job data helped bolster the S&P200 higher by 28 index points, whilst the unprecedented Mainland Chinese interest in Hong Kong stocks, saw the Hang Seng hit the 30,000 level. An estimated $27bn has been poured in the market via the stock connection since the start of the year. Though uncertainty still overshadow future US – China relations. Whilst the Biden is not expected to adopt Trumps’ hard-line approach to China, thus far the incoming administration has not signalled relaxing the existing sanctions. In final bout of tit-for-tat, China has sanctioned various out-going Trump officials including Secretary of State Mike Pompeo. Meanwhile the Nikkei edges higher after the BOJ revised their 2021 growth forecast higher noting enough stimulus has been delivered that will eventually offset the pandemic.
The U.S. dollar retreated among majors as the Treasury is set to light up the printing press. Crude ranges around $53 as investors balance between COVID restricting demand recovery and fiscal stimulus boosting economic activity. Gold rises $31 whilst bitcoin appears to find itself in a state of equilibrium as volatility subsides.
Despite a bank holiday, futures on Wall Street managed to etch out gains ahead of Janet Yellen’s confirmation hearing for Treasury Secretary in front of the Senate Finance Committee. Though Yellen will touch on topics of foreign exchange and taxes, the hearing is anticipated to act as a proxy forum for lawmakers to grill incoming President Joe Biden’s 1.9tn stimulus package.
European benchmarks regained momentum cheered on by better than expected GDP figures out of China. The quarterly rebound saw luxury goods stocks outperform as much of industry is dependent upon Chinese consumption.
With social restrictions to extend past January amid triple digit infection rates stifling Hong Kong’s economic recovery, the Hang Seng surged among Asia-Pacific indices posting 860 index point. Much of the move can be seen driven by inflows from Mainland China seeking value via the Stock Connect program. Thus far, Hong Kong stocks have boasted one of the lowest price-earning multiples across Asia, with Mainland counterparts 35% more expensive. Elsewhere, the S&P200 and Nikkei climb 49 and 315 points respectively. The state of Queensland in Australia is expected to lift restrictions, whilst miners led the board on increased electricity consumption in China, indicative of improving industrial activity.
The U.S. dollar index reaches a 1 month high amid a quiet market yesterday with the Turkey lira in focus. President Erdogan reiterated previous comments suggesting higher inflation accompanies higher interest rates. His comments put the newly placed central bank chief in a tough spot, of whom since taking the position, has raised benchmark rates to 17% from 8.25%. Meanwhile, crude fluctuates above $52, gold closes yesterday at 1,837 and bitcoin remains at 36,000.
Ahead of Joe Biden’s inauguration, global indices ended last week lower as uncertainty overshadow the ambitious 1.9tn stimulus package. The President-elect has promised, once officially in office will sign several executive orders overturning a raft of contentious policies implemented by Trump. Meanwhile, Democrats have become divided over the one-time stimulus check amount. Far-left purveyors have argued for another 2,000 whilst moderates voiced 1,400 is sufficient in topping up the 600 already passed in December.
COVID-19 still grabbed headline across Europe as benchmarks retreat. Ever escalating restriction’s have sowed the possibility of a double-dip recession, whilst the rate of inoculations has remained below expectations amid resurging cases. Mixed trial data for China’s Sinovac vaccine has delayed Hong Kong’s distribution. Nevertheless, the Hang Seng rallied 1.1% on open on the back of expectations beating GDP figures out of China. Australia points lower and a lack of action in the Japanese Nikkei.
Evidence mounts for a reversal in the U.S. dollar’s fortune with Janet Yellen set to be confirmed as Treasury Secretary. She is expected to give assurance the U.S. will not seek a weaker dollar for trade advantage and allow market forces to freely dictate direction. Elsewhere, early Asia session saw gold tumbling $23 dollars to 1,803 following a surprise announcement by the U.S. administration to revoke U.S. company export licenses of Huawei suppliers. Bitcoin loses steam, with the cryptocurrency back below 35,000.
Disappointing U.S. retail data worsened crude oil’s short-term outlook. Continuing surges in coronavirus infections still linger in the backdrop that could hinder global demand recovery. The decline could have been severe had it not been for Libya’s output reduction of 200,000 bpd after a leaking pipeline was discovered.
For the week ahead, central bankers in Canada (Wednesday), Europe (Thursday) and Turkey (Thursday) will deliberate on monetary policy. The ECB is expected to keep rates unchanged but communicate flexibility in expanding bond purchases should the pandemic worsen. Since hiking rates consecutively, Turkey’s new governor is set to make no adjustments but will monitor inflation closely.
Ahead of President-elect Joe Biden’s $1.9tn stimulus announcement, Wall Street diverges with the Russell’s index settling at record highs whilst large cap and tech retreated. Small businesses are anticipated to be the main beneficiary of a new wave of spending, including expanding jobless benefits and vaccinations programs on top of more direct payments to American households. Meanwhile out-going President Trump struggles to assemble a legal team ahead of his 2nd impeachment and uncertainty still cloud when the trial will begin.
European benchmarks managed to notch higher on brighter re-evaluations in the face of social lockdowns that’s stifling economic recovery. Alongside the large U.S. relief package, Chinese trade balance data not only exceeded expectations but now stands at historic highs. An encouraging sign, especially after the EU and China signing a trade deal earlier this week.
Elsewhere US – China relations continues to sour as the Trump administration in the their finals days is set to impose sanctions on smartphone maker Xiaomi and oil company CNOOC, citing security risk for the former and punishing the later for their involvement in disputed South China Sea waters. Though news initially flustered the Hang Seng on open, the indices regained ground intra-day hitting an 11-month high. Australian shares rose on the back of Biden’s unveiling whilst Japan took a breather, slipping 0.78% thus far. Nevertheless, following a strong start to 2021, the Nikkei is now just 5% from the 30,000 level. Investors are anticipating a bumper earnings season despite prevailing headwinds. An outbreak still uncontained, an Olympic in doubt and a plunging approval rating for Prime Minister Suga.
The U.S. dollar index fluctuates around the 90 level as elevated Treasury yields stave off risk-appetite for alternative currencies. Gold steadies at 1,850, crude hits 53.00 on demand recovery and bitcoin back at 40,000.
As Treasury yields pare off recent gains following consecutive days of strong auction demand for government debt. Wall Street’s unease settled with indices resuming their upward trajectory despite the U.S. house historically voting to impeach President Trump a second time. A single article of inciting insurrection has been approved however Senate Majority Leader McConnell signalled trial will not proceed until after Joe Biden’s inauguration, ensuring Trump serves his full presidency. Fed member Lael Brainard further reassured jitters yesterday that the central bank has no considerations to start tapering off its bond purchasing program this year.
European indices managed to notch higher after Francois Villeroy said the ECB will continue its super accommodative policies for as long as needed. Though investor mood is still mired by elevated COVID-19 daily infection rates prolonging social restrictions. Meanwhile, the U.K. was hit with most deaths in one day dragging the FTSE100 eleven index points lower.
One step forward, two steps back for the U.S. administration as they retracted plans to ban American investment in Chinese tech giants like Alibaba, Baidu and Tencent. Welcoming news for the Hang Seng, gapping 0.6% but lost ground throughout the session. Declassified documents revealed the U.S. had strategized in 2018 to counter China’s rising dominance via better relations with India and Taiwan. Elsewhere, Australia and Japan surge 0.5% and 1.8% fuelled by overnight rumours Biden is considering a further $2tn in relief aid. The BOJ also reaffirmed their readiness to expand monetary policy should the pandemic worsen.
The U.S. dollar index continue to rebound defying retreating yields, gold falls back below $1,850 and oil slips lower on profit taking. Despite bitcoin clawing back to 37,000 following a turbulent week, the spike in volatility has renew lingering doubts the cryptocurrency’s adoption as a mainstream asset.
Stretched valuations alongside rising Treasury yields temper irrational exuberance with Wall Street retreating from record highs. American politics started the week drumming up a 2nd impeachment for President Trump over citing insurrection against Capitol Hill. The Democratically controlled House have already introduced a resolution on Monday scheduled for a vote later in the week. Though Vice President Pence and Republican hardliners have strongly voiced against it.
Surging coronavirus cases induced exposure reduction across European benchmarks, especially among cyclical firms. Infections across the continent have topped 25 million whilst governments have upped the pace of vaccine rollouts in hopes stifle the new variant. London remains in tier 4 lockdown with the U.K. government mulling extra restrictions resulting in the FTSE100 falling 1.5%.
The S&P200 followed overnight U.S. sentiment, slipping 26 index points. A lack of short-term optimism has left the Australia benchmark in a 200-point range since the start of December last year. Meanwhile, both the Hang Seng and Nikkei surge intra-day. Imminent de-listings of Chinese firms in the U.S. market have re-directed investor capital towards the Hong Kong exchange, the most likely recipient of future China company listings. Drug makers in Japan kept optimism elevated following reports of successful vaccine trials.
The U.S. dollar post 4 consecutive days of gains. Higher U.S. yields have thus far deterred further exposure in risk-on currencies. Oil retraces but stays above $52, whilst gold fought back tumbling momentum from Monday. Bitcoin crashes 20% to $30,250 with few exchanges like Kraken triggering limit downs halting further declines. So far into Asia’s session, the cryptocurrency has recovered back to the $36,000 level.
Record highs again on Wall Street following President-elect Biden announcing plans for trillions more in further fiscal relief, including boosting stimulus checks to $2,000. Calling the $900bn bill signed last month by President Trump as a “down payment” whilst for his plans “the price tag will be high”. Meanwhile, the 10-year Treasury shot up to 1.12% as investor overhaul inflation expectations for 2021.
Likewise, the planned buffer for U.S. economic growth reverberated across European benchmarks boasting their best week in 2-months. Rising optimism from a U.S. Democratic Senate sweep and continuing vaccine rollouts saw the STOXX and DAX indices gain 0.7% and 0.6% respectively.
Asia-pacific indices opened Monday more cautiously as Australia fell 41 index points and Nikkei futures slips 235 points on a Japanese bank holiday. Defying expectations, the Hang Seng surged as high as 1.3% intraday, despite last week’s sell off in China’s telecom stocks following their removal from U.S. exchanges and plans by U.S. banks to delist approx. 500 structured HK investment products. Better growth prospects and 50 mainland funds expecting to launch in the coming months fueled the momentum.
The U.S. dollar index continues to rebound as investors temper their bearish bets as rising yields deter from alternative risk-on currencies. Elsewhere, crude takes a breather retreating below $52 whilst gold tumbles $64 down to $1,848. In focus, bitcoin experiences one of its worst Mondays, plunging 20% from historical highs of $41,989 to $33,745. Some $170 bn has been wiped off the cryptocurrencies market cap as analyst largely attribute the decline to whale’s profit-taking.
Despite growing calls to remove out-going President Trump as many believe his rhetoric instigated violence at Capitol Hill. Wall Street extends to all-time highs as prospects for more short-term stimulus outweigh risk of tougher business regulations and higher taxes. Both House Speaker Pelosi and Senate Democratic leader Schumer have insisted Vice-President Pence to invoke the 25th amendment and remove Trump from office immediately.
Meanwhile, European indices climbed two consecutive days in a row, with Spain outperforming posting gains of 3.3%. Defying lockdown measures, a string of positive news from better than expected German factory orders to European approval for Moderna’s second COVID-19 vaccine have boosted overall investor confidence.
Coming into Asia, the Hang Seng continues to defy expectations rallying to an 11-month high amid a dire outlook for Chinese companies on Wall Street. Both MSCI and FTSE Russell have confirmed they will delete three China telecom companies from their global indexes. Elsewhere, Australia is poised to break out of a 2-month consolidation, where as Japan rallies for 3 days in a row whilst a state of emergency has been declared in Tokyo.
Reprieve for the U.S. dollar following a bounce back from 3-year lows for the index. The Greenbacks turn around came alongside rising Treasury yields and inflation expectations with St. Louis Fed President Bullard commenting once the impact of vaccine reverberates across the states, “you have the economy poised to boom at the end of the pandemic”. Among exotic’s the South African Rand is emerging as the biggest loser thus far in 2021 with the USDZAR weakening to 15.40. The country reported a record 21,832 in new daily cases, culminating from the more infectious variant. Outflow’s have been intensifying amid a government contemplating nationwide lockdown.
Elsewhere, crude oil briefly hits $51, gold back down to 1,910 and bitcoin’s rollercoaster ride continues, temporarily passing 40K followed by a $3,500 tumble then back up to 39K again.
Pro-Trump supporters storm Capitol Hill in an attempt to block Congress from certifying Biden’s presidency following a decisive win for Democrats in Georgia’s run-off election. Both Jon Ossoff and Raphael Warnock’s victory ensures the Senate floor is now split 50-50 leaving Vice President-elect Kamala Harris as the tiebreaker. The S&P500 and Dow Jones relished the news both gaining 0.9% and 1.6% respectively on the prospect a top-up stimulus package is on horizon for American households. Meanwhile the Nasdaq underperform as investors fret over uncertainty if Democrats would impose harsher non-business friendly tech policies.
Despite lockdown, economically sensitive stocks boosted European benchmarks higher after Moderna’s vaccine won regulatory approval from the European Medicine Authority and the European Commission. Investors were also optimistic over better trade ties with the U.S. as the Democrats are on the cusp of gaining majority power.
Asia-pacific indices advanced higher, set to continue overnight U.S. momentum with the S&P200 and Nikkei climbing defying peripheral risk. The Japanese PM Suga is set to declare a state of emergency today for the Tokyo region, expected to decrease 0.7% of GDP for each month it’s implemented. Whilst the declaration does not impose lockdowns, authorities can close or limit business operations as well as urge residents to stay home. The Hang Seng continues to rise despite increasing hostility from U.S. officials in expanding the Wall Street backlist. The most recent rumours surround payment apps Alibaba and Tencent as the NYSE announced they will delist the ADR of China Mobile, China Telecom and China Unicorn prior to open on Monday 11th Jan.
Sentiment remains bearish on the U.S. dollar as it fluctuates at lows. Majors across are the board are hitting levels unseen for years. The Aussie nears 0.78, the Euro closes above 1.23 and the Yen at 103. Exotics paint a similar picture with the TRY and MXN breaking multi-month highs. Elsewhere, crude hits $51 today, gold tumbles whilst bitcoin achieves’ a literal vertical trajectory upwards approaching $38,000.
Wall Street tempers Monday’s losses as the U.S. Senate majority hangs in the balance on Georgia’s run-off election. Early results show Democrats in front by a 7-point margin with the gap expected to slim down razor thin. Whether President-elect Joe Biden’s presidency will be a lame duck for the next four years hinges upon Tuesday nights results.
Elsewhere, European counterparts remain on edge amid a volatile session despite closing relatively unchanged from yesterday’s close. The FTSE shrugged off the latest lockdown woes on the back of oil majors surging from OPEC’s meeting.
With Georgia’s vote counting still on-going, Asia-pacific indices tumbled with the S&P200 the worst performer, down 70 index points thus far. The 1% decline on the Hang Seng was further exacerbated by the NYSE’s 360 rotation back in favour of delisting three Chinese state-run telecom groups again. The exchange’s initial backflip drew fury among Treasury Secretary Steven Mnuchin and the Trump administration. Meanwhile, the Japanese Nikkei slips 0.38%.
The U.S. dollar continues to debase, hitting its lowest point since February 2018 among majors. Investors remain weary of the Thai baht’s recent appreciation following a hawkish tone from the Thailand’s central bank whilst a new coronavirus wave is set to impact economic projections. Authorities in China signalled their appetite for a strong yuan however discouraged a freefall in USDCNH as they set the fixing slightly higher at 6.4604.
Gold trades at an 8-week high at 1,950 on ever increasing inflation expectations whilst bitcoin recovers entirely from Monday’s crash. Oil prices just a tad shy from $50 after surging to a 10-month high as Saudi Arabia pledges to cut enough output to offset production increases from Russia and Kazakhstan.
Volatile start for 2021 as Wall Street tumbled with the VIX index gaining 18% on Monday over rising global uncertainty. Investors wrangled with a conflicting political environment ahead of Georgia’s Senate run-off. A Democrat’s win would almost certainly ensure greater U.S. fiscal stimulus but at the expense of higher taxes for the wealthy and less business-friendly regulatory reform. Alternatively, if Republican’s retain majority, the recently passed bill would most likely be all the relief American households would receive. Meanwhile, U.S. deaths top 354K and the new faster spreading variant risks boosting infections tempering optimism.
European markets followed suit, failing to sustain momentum fuelled by vaccination campaigns and the landmark Brexit trade deal. The STOXX and CAC slipped, whilst the DAX was rejected from closing at all-time highs. The FTSE fared better surging as high 6,666 intra-day but settled for 6,552 at sessions end despite a new national-wide lockdown. The U.K also began administering the Oxford/AstraZeneca vaccine on Monday and is expected to increase the pace of shots in Q1 in hopes to combat the fast-spreading variant.
Mixed price action in Asia, with Australia recovering overnight losses, Japan relatively unchanged and Hong Kong gaining 180 index points following a backflip from the NYSE in delisting Chinese oil firms.
Alongside rising risk, the U.S. dollar index regain some ground as investors began rotating back to risk-off assets. The pound was among the worst performers as bad new piles on. Gold soared $48 to a 2-month high whilst bitcoin plummets from 33,600 to 27,900 and ultimately closing at 30,000 following New Year. Elsewhere, crude falls back around $47 after OPEC+ reached a deadlock with Russia proposing an increase in production on grounds that demand has rebounded.
Wall Street ends 2020 settling at record highs after a turbulent year which saw the Dow Jones lose as much as 38% between February and March. Following March lows, Nasdaq was among the better performers posting gains of 93% as investors shift focus from cyclical stocks to innovative stay-at-home tech firms set to benefit from a global virus pandemic. It is not all smooth sailing coming into 2021. With a newly elected U.S. President and Georgia’s 2 senate seat run-off at stake. The winner of the run-off will determine whether Republicans or Democrats take Senate majority, dictating economic policy for the next four years.
Elsewhere, European and UK indices suffered consecutive days of declines amid a resilient virus and stricter measures set to devastate economies across continents. Alongside delaying the opening of schools, PM Boris Johnson is contemplating tightening restrictions. Meanwhile, Germany will extend national wide lockdown till end of January and France implemented a nightly curfew. The pace of vaccinations has been overly cautious, and nations are expected to pick up the pace in the new year.
Mixed start to 2021 for Asia-Pacific indices. The Japanese Nikkei tumbled 640 index points intra-day following an announcement by PM Suga to start vaccinations by the end of February. The market was expecting the PM to declare a COVID-19 emergency in the coming days but only to be disappointed. Despite, delisting threats for Chinese oil companies on the New York Stock Exchange, the Hang Seng rose 310 points, whilst Australia climbed 78 points defying gloomy sentiment as Sydney imposed stricter social measures yesterday amid a 3rd wave outbreak. In an attempt to dampen the economic impact from the growing Australia – China trade war, PM Scott Morrison is moving to strengthen trade ties with smaller island in the Pacific Ocean in exchanging their neighbors with COVID-19 vaccines.
The American greenback retains its downward trajectory in the new year as majors set break away to new multi-year highs. Gold breaches back above 1,900 in anticipation of higher inflationary pressure resulting from U.S. stimulus. Ahead of OPEC’s meeting today, crude oil rises for four consecutive days to $49 expecting a delay in raising output in February as surging coronavirus infections engulf developed economies.
On the cryptocurrency front, bitcoin relentless soars to record highs of $34,782 during the holiday break. The 206% meteoric rise initially fueled by PayPal’s integration into their payment services back in October 2020, has seen the digital coin gain populous acceptance as a mainstream alternative payment method.
Ahead of New Year’s Eve, global investors began winding down exposure as broad-based benchmarks ended in bear territory albeit with some stragglers on Wednesday. Wall Street was disappointed as Senate Majority Leader McConnell positioned the $2,000 stimulus payment alongside measures on election integrity and social media liability protections. The packaged deal addresses President Trump’s 3 most vocal demands whilst deterring Senators from both congressional sides in unanimously voting for the bill. The most likely outcome would leave the bill dead in the Senate floor.
Despite positive momentum on the vaccination front and the U.K. parliament overwhelmingly voting in favour of the Brexit deal, the FTSE fell 80 index points with European counterparts following suit. Brits rejoiced following local approval of AstraZeneca’s COVID-19 vaccine whilst China’s President and European leaders met to finalise an EU-China investment agreement designed to promote post-pandemic economic recovery in bi-lateral trade. Elsewhere, on-going trade dispute between EU-US saw the out-going administration slap additional tariffs on European Union products including aircraft component and wine.
Asia followed overnight U.S. sentiment posting declines in Australia whilst action in Hong Kong and Japan remained muted. Authorities in Sydney and Melbourne area struggling to battle COVID-19 clusters across both states after an initial outbreak on the Northern Beaches have now grown to 144 people.
The U.S. dollar index settled at a 2 and a half year low yesterday. Since the pandemic began back in March, the year of 2020 saw investors shun the greenback as a Federal Reserve’s commitment to being super-accommodative and loose fiscal policy debase the currency. Meanwhile, gold surges towards $1,900, crude stays above $48 and bitcoin breaks all times highs again briefly touching 29,000.
Market jitters return as Republicans block Democrats attempt to increase direct payments to households from $600 to $2,000. Defying the out-going President, Senate Majority Leader McConnell not only put the vote off, but also challenged Trump’s veto of the defense bill and pleaded towards his fellow Republicans to override his decision.
Upon U.S. session open, Nasdaq held its ground whilst Wall Street across the board took a nosedive ending lower on Tuesday. President-elect Biden had criticised the current administration’s vaccination campaign as slow, vowing to get 100 million American’s vaccinated within 100 days of his presidency.
Across the Atlantic, U.S contagion spread across European benchmark, of whom initially extended post-Brexit deal rallies only to lose all intra-day gains. Likewise, following Boxing Day, the FTSE had gapped up 1%, and surged as high as 2.6% only to end at 1.2% by session end.
Asia opened mixed as Australia and Japan oscillated whilst Hang Seng surged to multi-month highs, up 1.7%. Panic selling in China’s tech sector after Beijing’s recent anti-trust probe spurred investors hunting for alternative value in Hong Kong.
The U.S. dollar continues to slump shrugging off stimulus concern within the political arena. The Aussie dollar reached a 30-month high, the Turkish lira post 3 consecutive days of gain and China yuan’s just pips away from 6.5. Elsewhere, bitcoin rallies back up to 28,000 and crude settles around $48.
US President Donald Trump decided to sign the massive $2.3 trillion coronavirus relief. Trump’s signature of the $900 billion coronavirus relief package extends unemployment benefits for millions of unemployment workers and independent contractors. The US dollar index fluctuated and fell. It was a quiet trading day on Monday as many investors were on vacation for Christmas and New Year. The US dollar index fell slightly to 90.30, a decrease of 0.06%. The intraday highest touched 90.38 and the lowest touched 89.98. Spot gold fluctuated after a sharp rise of 1.3%. Spot gold closed at US$1873.54, down US$5.71 or 0.30%. The lowest intraday touched US$1868.96 and the highest intraday US$1900.19.
Due to the massive coronavirus relief and government spending bill with a total value of 2.3 trillion U.S. dollars, and the market is optimistic about economic recovery. The three major U.S. stock indexes continued to rise by 0.7%-0.9% after the Christmas holiday last night, setting record highs. The Dow once rose 325 points or 1.1% to 30,525. US stock futures continued to rise by 0.2%-0.3% across the board. The major stock markets in the Asia-Pacific region performed well in the early stage. The Nikkei and New York stocks continued to rise by more than 1% after the long holiday. They reached 29 and a half year highs and repeated record highs respectively. The former has reached 27,239 immediate market highs and surged 385 Point or 1.4%. Taiwan stocks have also repeatedly set record highs.
Cryptocurrency exchange Coinbase announced that as the U.S. Securities and Exchange Commission (SEC) sued the Ripple (XRP) issuer Ripple for an unregistered securities issuance of US$1.3 billion, it has imposed restrictions on the trading of Ripple and will start trading on January 19. Trading was completely suspended at 10 am on the same day. Coinbase has 35 million users in more than 100 countries and regions. The company has secretly applied to the SEC for listing. This will be the first major cryptocurrency exchange to be listed in the United States.
Christmas ends on a positive note as lingering uncertainties for 2020 finds a clearer path forward. Under immense pressure from congressional parties, Monday saw President Trump sign to action the 900bn stimulus package. Alongside relief for American households, the legislation further averted a partial government shutdown on Tuesday by releasing 1.4tn in spending to fund federal agencies. Overnight futures on Wall Street rejoiced as all board-based benchmarks surge towards all-time highs.
With a historic Brexit trade agreement signed on Christmas eve, Downing Street released a 1,246-page text of the deal on Saturday just five days before the U.K. exits one of the worlds’ significant trading bloc. The FTSE100’s response was relatively mute whilst the STOXX and DAX rose 1.17% and 1.52% respectively. Investor sentiment received a further boost as Europe implemented a coordinated vaccination campaign following regulatory roll-out for Pfizer-BioNTech’s vaccine shot with AstraZeneca expected to obtain their medical approval later this week.
As China’s crackdown on monopolistic practices accused from fintech goliaths Ant Group and Alibaba, the Hang Seng bucked the negative mood surging to an intra-day high of 26,541. Likewise, the Japanese Nikkei followed suit fueled by a quicken global economic recovery as the world begins inoculations and U.S. injects cash.
On thinly traded liquidity, bitcoin received a Christmas bump to record highs at 28,353 on Sunday after closing at 23,718 last Thursday. Nevertheless, the 20% move could not be sustained, and the cryptocurrency retreated down to 27,000. Bitcoin’s recent rise back to prominence came alongside greater vocal institutional interest. From payment services like Pay Pal to asset managers like Paul Tudor Jones endorsing the digital currency.
Elsewhere, the U.S. dollar continues to debase across the board as the Treasury mints more cash. In anticipation of a weaker dollar, China lifts its yuan’s mid-point to 6.5236, a 30-month high. Gold is higher by $14 as markets re-evaluate future inflation levels whilst crude stays above $48 as an optimistic economic recovery out weights risk of recent travel restrictions.
Ahead of Christmas, European broad-based benchmarks outperformed American counterparts on Wednesday upon clear signs a Brexit trade deal is imminent. As negotiations come down to wire, the European Commission has said they’re now in the “final stages” after fine-tuning fishing right details. One last eleventh hour issue remains and that is trading rules for electric vehicles. Downing Street has requested U.K. electric cars to be tariff free if most of the components were outsourced beyond EU and UK territories.
Across the Atlantic, U.S. households were left in limbo following Trumps refusal to sign the 900bn coronavirus relief deal. Some House Republicans have called the bill tainted and supported the White House proposal to increase stimulus checks from $600 to $2,000. With unemployment benefits set to expire the day after Christmas, congressional Republican party is scrambling to find a compromise. The uncertainty President Trump injected left Wall Street mixed. Nasdaq ended the session lower by 48 points whilst the Dow Jones outperformed by 171 points followed by the S&P500. Concerns have also risen over the pace in which vaccine doses have been disseminated. Millions of injections are still in storage and the goal of vaccinating 20 million people by December end is in doubt.
Despite authorities in China launching an investigation on Alibaba’s monopolistic practices, the Hang Seng managed to etch out 0.3% intra-day. Elsewhere, disappointing performance from the S&P200 and the Japanese Nikkei had price in negative territory.
The U.S. dollar resumed declines with the pound outperforming, surging as high as 213 pips amid increasing probability of a Brexit deal. Expectation beating GDP figures saw the Canadian Loonie reversed Tuesday’s losses in its entirety. Meanwhile, crude oil gains just over $1.10 over inventory drawdowns, gold steadies itself at $1,872 and bitcoin takes a breather, fluctuating between two major psychological round numbers. $23,000 – $24,000.
Fresh jitters crept into Wall Street as out-going U.S. President Trump signalled he may not sign the congressionally approved 900bn COVID relief bill. A four-minute video posted on Twitter called the 5,600-page legislation a disgrace and that he would ask congress to amend the to “increase the ridiculously low $600 to $2,000 or $4,000 for a couple”. Both the S&P500 and Dow Jones edged lower by the end of session, whilst Nasdaq outperformed relatively as lingering concerns over the coronavirus variant had investors still favouring stay-at-home stocks.
Meanwhile, defying daily infections hovering above the 30K mark, new tier 4 restrictions in south-east England and intensifying Brexit talks, the FTSE100 stabilised up 0.4% on Tuesday. Germany’s BioNTech alleviated concerns over the new strain suggesting existing vaccines are just as effective and if necessary, a new vaccine could be developed within 6-weeks. Despite prospects of negotiations continuing after Christmas, both Boris Johnson and Ursula von der Leyen stressed a desire to close a deal by Wednesday night. Fishing rights remain a key point of contention. Elsewhere, broader European indices outperformed settling near intra-day highs following Monday’s scare.
Coming into Asia, choppy start for indices. The S&P200 gapped up 0.24% on open after finding support at 6,600, Hong Kong suffered a 0.37% gap down only to recover its entirety mid-session, while the Nikkei slipped following cumulative infections topping 200K and PM Suga’s reluctance to declare a state of emergency.
Resurging fragments of uncertainty fuelled U.S. dollar demand across the board. As expected, frets over Brexit saw the euro and pound underperform amongst majors, with the former depreciating 0.6% whilst the latter down 0.8%. In the meantime, China’s central bank is anticipated to reduce the dollar’s influence against it’s yuan basket. Ahead of Bank of Thailand’s policy decision, the Thai Baht loses 1.4% in 2-days as rates are expected to stay at 0.5%. Crude oil slips another dollar to $46.62 as global restriction hamper petroleum demand. Whilst gold retreats, bitcoin surges closer to $24,000 on the back of unrelenting institutional demand.
European markets and US market open in the heavy selloff on worries over a new strain of coronavirus found in the UK. Some other countries also have such cases, including Australia, Iceland, Italy, the Netherlands and Denmark.
The WHO held a press conference for the new coronavirus. WHO said that countries have started virus sequencing to find cases infected with the new crown virus variant found in the UK. The current data reported by the United Kingdom shows that the spread of this new coronavirus variant has increased, with the transmission index rising from 1.1 to 1.5. The UK is determining how much of the impact comes from the virus itself and the differences in individual behavior after infection with this new virus.
US crude oil drops sharply from around 49 to the lowest 46.1 during the day. following the risk aversion of the market. The new COVID-19 mutation and stricter lockdown the concern that more parts of the world may have renewed restrictions. US crude oil has increased for more than 30% since November as a sequence of vaccine breakthrough, but signs of stricter restrictions may lead to a decline of oil prices and weakening forward curve.
The U.S. Congress began to consider more than US$900 billion to stimulate the economy, and the program was the first to be debated in the House of Representatives by 227 to 180 votes. The plan will include distributing US$600 to each American citizen and continuing to provide subsidies to the unemployed. At the same time, it will increase credit to SMEs by US$284 billion, and provide financial support to schools, airlines, transportation systems and vaccine distribution. The plan and the 1.4 trillion US dollar annual budget will be delivered for debate and voting. The review of the stimulus plan and the budget is expected to be the last item on the agenda before the end of the congressional term on January 3 next year.
Mixed session in Asian trading with futures across Wall Street pointing lower as markets were spooked over emerging evidence revealing a new coronavirus strain sweeping across Europe and Australia. The new variant is said to spread more quickly and has been a factor in driving the recent surge in infection.
In Asia, the S&P200 oscillated but remained unchanged, the Nikkei tumbling 1.7% and Hang Seng gapping lower 0.4% only to regain the entirely in later session. Currencies across the board against the U.S. dollar tumbled as risk appetite was sapped with more global lockdowns and restrictions on the horizon. The move was further exacerbated with investors fearing the incoming Treasury Secretary would favour a strong dollar policy after two predecessors, Larry Summers and Paul Hankson urged Janet Yellen to manage the greenbacks global dominance role more prudently.
With focus on COVID, the much-anticipated stimulus reformed announced Monday morning failed to buoy investor sentiment. Whilst the Japanese parliament signed on a record 106.6 trn yen annual budget for 2021 boosting military and welfare expenditure. Congressional leaders in the U.S have reached a $900bn relief package after multiple rounds of negotiations in past weeks. Hard-hit households would receive a one-off $600 check in addition to another $300 per week in unemployment benefits. COVID liability shield remains a point of contention and thus was excluded.
Last Friday saw European and UK benchmarks weaker as Brexit negotiations drag on. A draft deal had been anticipated before January 1st, however progress thus far suggest talks will now continue past Christmas. The previously resolved fishing matters have returned to the forefront with negotiator arguing over EU boat rights in UK waters and the length of the transition period.
Elsewhere, crude oil slips below $48 with demand recovery now in doubt. Gold and bitcoin continue to make significant gains, more so the latter asset. The cryptocurrency gained 32% last week as more prominent investors publicly embraced the digital coin. This morning the crypto gained another $1,000 on the back of Elon Musk’s twit pondering converting part of Tesla’s balance sheet into Bitcoin.
The US dollar fell to its lowest level in more than two years against major currencies on Thursday. The Fed’s reassurance to its current policy stance also boosted the interest of high-risk currencies after more stimulus measures from the US and a trade agreement. According to members of Congress, they are close to reaching an agreement to provide US$900 billion in aid to the American, which has boosted market sentiment. Before federal funding expired at 12:01 AM Eastern Time on Saturday, lawmakers had little time to pass a government funding and pandemic relief plan.
US Dollar Index has dropped nearly 13%, from 102.82 to 89.9, since March, when it spiked to a three-year high as the coronavirus pandemic plunged the US. The economy was into recession, driving investors into more safety currency in the world. USDJPY dropped to as low as 102.9 today.
The rise of Bitcoin, the world’s most well-known cryptocurrency, is supported by the needs of larger investors, who have been Attracted by earnings potential and inflation hedging characteristics.
Technology stocks pushed the S&P 500 and Nasdaq to record highs on Thursday as the market’s optimism over the coronavirus stimulus rose, which ignored the signs of economic pressure brought about from the coronavirus pandemic.
The U.S. prepares to ship 5.9 million doses of coronavirus vaccine on Thursday. At the same time, the U.S. recorded the highest single-day death cases of 3580 from coronavirus.
The value of Bitcoin, the world’s well-known cryptocurrency, has reached $21,800, hitting a new high with an increase of 11.9%. The price of Bitcoin has already surged by more than 400% this year from a low point of around $4500 in March. As some of the biggest institutions in the world, including big companies in Wall Street and multinational payment companies, are more into cryptocurrency, bringing with their capital and expertise, this may make consumer interest in it. In addition, the coronavirus pandemic and the need for safe-haven global monetary policy opening and releasing are also important point of Bitcoin's recent surge. It is reported that 63% of Bitcoin investors surveyed stated that their decision to invest in Bitcoin was affected by the coronavirus pandemic. Bitcoin seems to have something in common with safe-haven assets, such as scarcity, not much correlation with traditional financial markets.
The U.S. Federal Reserve announced to maintain close to zero interest rates unchanged. The Federal Reserve said it will buy at least $120 billion in bonds every month. The Federal Reserve said, “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The Dow closed at 30,154 points, down 44 points (0.1%); the S&P 500 index reported at 3701 points, up 6 points (0.2%); the Nasdaq closed at 12,658 points, up 63 points (0.5%).
Flash PMIs in Europe this month showed the economy far exceeded expectations, with manufacturers reporting strong growth by performance from German, French and UK. However, German’s largest economy was in a stricter lockdown again.
Ahead of Wednesday’s final Federal Reserve meeting for 2020, Wall Street positions itself higher in anticipation of adjustments on bond purchases and pressure from Fed Chair Powell nudging the Senate towards a stimulus deal before the congressional session winds down this Friday. Two partisan issues have left progress on a new relief package moving at snail’s pace. A slimmed-down $748bn proposal has been introduced that separated out COVID liability shield and local aid in hopes to push through a last-minute deal. House Speaker Pelosi and Senate Majority leader McConnell are due to meet Tuesday evening, with the later previous floating a similar trim separated deal.
Vaccination drive in Europe shook off rising infection woes and lifted European indices into positive territory. Despite plans from euro zone members to tighten restrictions before the new year, investors have narrowed their focus on vaccine optimism with the EU expected to approve a COVID-19 vaccine by January. Meanwhile, the FTSE advanced with Brexit talks moving forward on fishing rights. Downing Street has conceded the point that fishing vessels under a U.K. flag needs to be majority British owned.
Overnight momentum from the U.S. session carried the S&P200 higher in Asia, however the benchmark lost all intra-day gains following an update with the WTO moving forward on Australia’s challenge on Chinas’ barley tariffs. Elsewhere, the Nikkei retreated and so too did the Hang Seng. Chinas’ antitrust crackdown from fines levied to probes soured investor sentiment in fear of Beijing tightening its’ grip over prominent tech firms.
Positive steps towards stimulus, vaccine roll out and even Brexit saw outflow in the U.S. dollar in search for higher yielding currencies. The CAD closed at a multi-year record whilst AUD, EUR and GBP settled for multi-month highs. Mexico’s peso reversed previous days losses after the government pulled back a bill that would force the central government to purchase foreign currency, of which could potentially be originated from laundered activity. Alongside a steady appreciate in the yuan, China’s leaders are expected to convene this week to plan out economic goals for 2021. Loose policy to combat a virus pandemic saw China exhibit a v-shaped recovery and in turn major capital inflows. Elsewhere, gold and crude advances whilst bitcoin is about to break historic levels again.
Harsher restriction across Europe is souring investor mood ahead of Christmas. Monday open saw European futures buoyed by an extension in Brexits’ negotiation deadline, only to have indices retreat lower by session end. Non-essential shops, services and schools will close until January with gatherings reduced to 5 people from 10. Likewise, The Dutch PM announced the Netherlands will start a five-week nationwide shutdown starting today. Depending upon neighbouring countries Ireland may reimpose piecemeal COVID-19 restrictions in January.
Meanwhile, the FTSE100 fell 48 points after the mayor of London placed the city under tier 3 coronavirus restrictions from Wednesday. The pound though ended Monday in bear territory still retained its appreciation (up 97 pips) from last Friday close due to the opening gap up.
Across the pond, cyclical stocks suffered dragging both the Dow and S&P500 lower whilst Nasdaq outperformed. Despite the first U.S. vaccination being administered yesterday, investors are re-evaluating their bullish optimism over distribution hurdles slowing down national wide roll out. On the stimulus front, a bipartisan group of Senators presented a drastically reduced stimulus bill amounting to only $748bn (from $908bn) in hopes to compromise the differences between Senate Majority leader McConnell and House Speaker Pelosi. Reception on Capitol Hill was mixed.
Asia open was weighed down by market risk of their own. The Nikkei edged lower following Japanese PM Suga suspending his governments domestic tourism promotion campaign over rising infections. The government had hoped to revitalise domestic growth via a travel subsidy programmed dubbed “Go To Travel”. Alongside the S&P200’s 32-point loss, the Hang Seng too declined 267 points over Australia and China’s increasing geopolitical spat. In retaliation for China banning coal imports from Australia, the Aussies are taking Beijing to the WTO over barley export tariffs and government subsidies creating unbalanced markets.
As Joe Biden was formally confirmed as the next U.S. president by the electoral college, the greenback traded at 2.5-year lows against a basket of peers. Elsewhere, China’s yuan oscillates above 6.50 in anticipation of the central bank flooding the financial system with 800bn yuan in funding. The communist party had begun tapering fiscal stimulus but has set off a string of corporate defaults. Crude oil holds firm below $47 defying a recent OPEC report revealing a downward revision in global demand for 2021.
Brexit negotiations given another lifeline as UK PM Boris Johnson and EC President Ursula von der Leyen agreed to extend talks beyond Sundays’ deadline. EU Representative von der Leyen said “Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over, we think it is responsible at this point to go the extra mile.”
The pound gapped 130 pips higher along with broad-based benchmarks in Australia, Hong Kong and Japan. Whilst the latter two lost ground throughout Asia’s session, the S&P200 retained gains intraday, rallying as high as 1.1%. Global futures also pointed higher as the first batch of Pfizer-BioNTech vaccines were due to be delivered in the U.S. on Monday.
Friday close saw Wall Street steady itself ahead of a risk-filled weekend whilst European and British investors offloaded exposure ahead of Brexit’s deadline. Though Democrats and Republicans have agreed on a ballpark figure to implement a 908bn stimulus package, differences still lie in how the bill should be structured. Senate Majority Leader McConnell has been willing to concede business liability protection against COVID-19 in exchange for dropping a supplementary $300 employment benefit for jobless American’s. A point House Speaker Pelosi has refused to give in.
The U.S. dollar resumed its depreciation among majors on Monday open as weekend risk subsides. Oil set to point higher on the back of a 6-week rally. Alongside vaccine prospects, OPEC+JMMC’s decision to delay production increase eased any crude jitters. Compared to bitcoin which open above 19,000 from 18,000 last Friday, gold has remained docile above the 1,830 level.
For the week ahead, the FED (Thursday), SNB (Thursday), BOE (Thursday) and BOJ (Friday) will deliberate in their final monetary policy meeting for 2020. The FED is expected to clarifying guidance surrounding the emergency bond-buying program whilst the BOE’s decision is at the mercy of Brexit trade talks. If negotiations deteriorate further, a cut to zero is anticipated. Meanwhile, no changes expected from the SNB and BOJ.
After the much worse than expected unemployment claims data in the United States, dollar falls in early US session, reflecting the impact of current coronavirus pandemic. Pound fell as the possibility of Brexit increased. Euro increased after European Central Bank made the expansion and extension of Pandemic Emergency Purchase Programme (PEPP) as expected.
The number of people claiming unemployment benefits for the first time in the United States for the week ended December 5 jumped by 137,000, compared with the previous drop of 71,000, to a total of 853,000, the highest since September, which was far more than market expectations. It rose to a total of 725,000, reflecting that the expansion of business closures under the pandemic has led to a new round of job losses. It is unlikely that the United States will introduce a new round of fiscal stimulus in the short term. Earlier, House Speaker Democrat Pelosi suggested that the debate over spending plans and aid for the new crown virus may continue until Christmas.
The Australian Dollar has surged more than 1.3% against the US Dollar since the start of the week. AUD/USD advances above 0.756, highest since June 2018. The month high marks the biggest rise in five weeks.
Wall Street revaluates stimulus before January retreating from record highs, with the Nasdaq underperforming 2.4% as congressional talks hit a brick wall. The administrations $916bn counterproposal had received a frosty reception from House Speaker Pelosi and top Democrat Chuck Schumer. Despite attempts by Senate Majority leader McConnell in conceding demands for protection to shield businesses from COVID related liabilities, Democrats find the new bills’ reduction in jobless benefits unacceptable.
Across the pond, the E.U. and U.K. deal with political wrangling of their own. Drastic deterioration in Brexit negotiations this week saw PM Boris Johnson personally fly to Brussels only to be stone-walled by EU heavyweights whom signalled they’re prepared to accept a no-deal outcome. Though the pound initially slipped 70 pips, the FTSE remained unchanged illustrating a clear divergence between the current state of Brexit talks and investor anticipation of a last-hour deal. Both sides have agreed to give till Sunday before negotiations are dead. Meanwhile, European indices slip from multi-month highs ahead of the ECB meeting on Thursday.
With the overall global mood overshadowed by U.S. stimulus and Brexit, Australia and Hong Kong saw modest intra-day declines whilst Japan inched higher following the release of better than expected manufacturing data.
Increasing uncertainty saw a return in U.S. dollar demand whilst gold loses 1.6%. Though the Aussie moved against the grain to a 2 and a half year high, despite rising AU – China tensions. Chinese demand for Australian iron ore remains strong, especially as the East recovers economically. Historically, AUDUSD would appreciate alongside commodity prices. Elsewhere, a tourism snag brought the Singaporean dollar’s rise to a halt. A return to normalcy had the currency break a 2-year high on prospects that tourism would open back up only to be derailed by a COVID-19 infested cruise ship just off the country’s shores. Following OPEC, oil fluctuates around $45.50 despite yesterday’s inventory revealing a dramatic surplus at 15.2mn.
Alongside Wall Street breaking into new highs, global indices across the board posted positive gains on Tuesday unphased by stalling U.S. stimulus and Brexit talks which continues to overshadow general sentiment.
Nevertheless, the world’s first approved coronavirus vaccination kept investor morale high. On Tuesday, thousands of elderly Brits were recipients of Pfizer/BioNTech vaccine outside clinical trials. American’s are also expected their first dose within 10 days as regulators grant emergency approval.
Despite Democrats compromising a multi-trillion-dollar package for a 908bn deal, Senate Majority Leader McConnell has refused to endorse the bipartisan proposal but instead opted for his own 916bn plan. The major different lies in protection for businesses against COVID-19 related lawsuits.
Though investors were caught off guard from last Sunday’s sudden deterioration in negotiations. The pound steadies around 1.34, with intra-day volatility remaining high. Meanwhile, the FTSE up 0.8% ahead of U.K. PM Boris Johnson meeting ECP Ursula von der Leyen in Brussels today for last ditch effort. European benchmarks also followed suite in anticipation of a Brexit deal.
Markets across Asia-Pacific rallied on open with Australia extending gains to a new 9-month high. Exceptional machinery orders saw the Japanese Nikkei elevate 310 points whilst Hong Kong reversed Tuesday’s losses by 0.78%.
The U.S. dollar index steadied just below 91 resulting from lacklustre macroeconomic news. Elsewhere, gold continued its hot streak closing above 1,870 whilst bitcoin fell below 19,000.
Among global benchmarks, Nasdaq outperformed as investors retreated to tech firms benefiting from COVID-19’s continual surge. Despite promising headway yesterday in breaking congressional deadlock on a $908bn stimulus proposal, both S&P500 and Dow failed to keep record-breaking momentum slipping 0.27% and 0.54% respectively. Wall Street was further weighed down on reports that U.S. officials passed up a chance to secure more vaccine shots from Pfizer in favour of diversifying agreements with Moderna, AstraZeneca and Johnson and Johnson. The current Pfizer deal is enough for only 50 million Americans among a 328 million population.
Though the pound regained loss ground from Monday’s intraday tumble following Prime Minister Johnson signalling his willingness to walk away on threats to break Brexit’s divorce agreement. Euro-zone benchmarks still fell on on-going Brexit woes and rising risk from U.S. – China tensions. Subsequently after Monday’s deadlocked negotiations, the U.K. PM is expected to travel to Brussels to meet with EU leaders for a make-or-break talk.
Asia fails to build on momentum from last week’s vaccine and U.S. stimulus induced rally that edged Wall Street to fresh highs on Friday close. Indices retreated into negative territory on open with Australia lower by 17 points overshadowed by rising Chinese trade tensions. Government forecaster Abares expects agricultural exports to decline 7% in 2021 hitting a 5-year low. Meanwhile, the Hang Seng tumbled 2% following reports that the White House will sanction another dozen Beijing officials over their coordination in expelling opposition legislators in Hong Kong’s parliament. The Nikkei did not fare any better, slipping 1.2% after hitting a 29-year high last week. Concerns have risen over a weekend report depicting the Bank of the Japan as the largest owner of Japanese shares at $434bn, followed by the nation’s public pension fund.
European benchmarks rallied on Friday on the back of oil companies. A sigh of relief as OPEC+JMMC members agreed to a compromise in making small piecemeal increases in oil production starting January instead of a complete resumption. Signs that one of the biggest obstacles to a post-Brexit deal moving towards a resolution saw the FTSE surge to 10-month highs. Britain is willing to offer a 3-year access agreement with EU fishermen to operate in U.K waters, though the catch volume remain in discussion. Monday session though, saw overnight futures slide 20 points as talks deteriorated on Sunday. Irish Prime Minister noted “it’s a 50-50 right now” with the new source of disagreement being future regulation governing EU and UK businesses to ensure a level playing field.
Wall Street remained firm near record highs as promising stimulus prospects were offset by COVID-19 vaccine doubts. A $908bn fiscal package drew further bi-partisan support on Thursday across Senate and House floors. Senate Majority leader McConnell has been under increasing pressure from fellow Republicans to negotiate a deal as the new proposal already falls way below the $2.2tn Democrats had initially argued for. On the vaccine front, Pfizer hit a logistics snag resulting in 50mn from 100mn of vaccine doses it had planned by the end of this year. Meanwhile leading U.S. infectious disease expert Dr Fauci warned U.K. regulators that they are rushing the approval process without proper clinical trial scrutiny.
Likewise, European indices ended little changed though surprisingly U.K. rallied despite renewed Brexit woes. British negotiators have accused their French counterparts of making eleventh hour demands, derailing progress made thus far. France is demanding a guaranteed level playing field for U.K – French businesses inclusive of a British regulator to police state aid to companies and ratchet clauses to ensure environmental and labour regulations evolve in similar fashion over time.
Mixed results coming into Asia with Australia rallying on open whilst Japan and Hong Kong retreated. Souring US – China relationship seeped into the Hang Seng after Congress passed legislation yesterday that would force Chinese companies to delist from American stock exchanges. Nevertheless, recent data shows Wall Street unphased by geopolitics, piling in a record $212bn into Chinese bonds and stocks this year.
Subdued rally across Wall Street as much of the anticipated optimism has seemingly been priced in already. Yesterday, signs of fresh stimulus hopes were renewed following bi-partisan dialogue between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnel on the proposed $908bn package. Elsewhere, US-China relations continue to overshadow bi-lateral trade. When questioned, the incoming administration noted they will leave the existing phase-one trade deal intact until President-elect Biden reviews all foreign policy. Out-going President Trump was facing allegations of his own when unsealed court documents revealed U.S. prosecutors were investigating whether the White House offered presidential pardons for political contributions.
Within the Euro Zone, the FTSE outperformed after Pfizer BioNTech’s vaccine received emergency approval in the U.K. 20mn doses are expected to be available next week with the elderly first in line. Across the aisle, the German DAX slipped 0.5% as the nation struggles to round the daily infection curve. Chancellor Merkel has extended partial lockdown by 3 more weeks. The on-going Brexit sage still a cause for concern as EU’s chief negotiator warns both sides have yet to overcome differences.
Asia-pacific indices were mixed, with Australia and Japan mute whilst Hong Kong added 210 points from strong Caixin services PMI out of China.
Building on Wall Street’s momentum spurred on by vaccine breakthroughs and prospective approvals later in this month, the S&P500 and Nasdaq surged to all-time highs whilst the Dow Jones underperformed closing relatively unchanged from Monday.
Yesterday’s strong finish followed a proposed $908bn piecemeal fiscal stimulus package by a bipartisan group of U.S. senator amid Fed Chair Powell’s appeal for more government support. Though the package falls short of the $2tn brought forth by Democrats, the bipartisan bill would immediately provide $288bn aid to small businesses and $180bn in additional unemployment. Much needed in a period where ‘the labour market is still 10m jobs below pre-pandemic levels’ as noted by the Fed Chair.
European indices and the FTSE started off December reversing Monday’s woes on the back of news E.U. regulators could approve Pfizer’s vaccines and be ready for distribution by January. The announcement was well received especially as economic growth remains subdued amid stringent restrictions.
End of month profit-taking saw Wall Street tumble early U.S. session. Nonetheless, most indices attempted to recover with Nasdaq outperforming, ending Monday unchanged whilst the S&P500 and Dow fell. Despite, Moderna set to submit its COVID-19 vaccine for approval in the U.S. and E.U, Jerome Powell warned of challenging months ahead. The Fed Chair said “the vaccine front is very positive for the medium term. For now…uncertainties remain, including timing, production and distribution…across different groups”. Meanwhile, Treasury Secretary Mnuchin encouraged congress to re-deploy the re-directed $455bn of the emergency lending facilities to be utilized as another round of fiscal stimulus.
Elsewhere, the U.K and European markets ended November erasing the previous week of gains over on-going Brexit woes. Only five weeks remain before the deadline with fisheries still a sore point of contention. Under current engagements, U.K. and E.U. fishing fleets have full access to each other’s respective waters as well as pre-negotiated national quotas. However, British fishing grounds covers broader nautical miles and is more bountiful than E.U. waters. In return for access, Boris Johnson is haggling over a higher volume of fish Brit’s can catch.
With prospects of a global vaccine roll out within weeks, Asia-pacific indices rallied on open. Both Australia and Japan surged whilst Hong Kong gapped up despite the nation imposing new restrictions amid the latest wave of COVID-19.
Global indices are poised to have one of their best if not the best performing month on record following a spate of well received announcements during November. From Joe Biden’s Presidential win to COVID-19 vaccine breakthroughs and central banks alluding to additional quantitative easing. All events pointing to accelerating economic recoveries next year. However, it is not all smooth sailing ahead as the out-going administration escalates tension with Beijing to cement President Trumps tough on China legacy and wedge President-elect Biden into a hardline position against Beijing. Documents revealed today see China’s top chipmaker SMIC and oil & gas producer CNOOC added to a blacklist curbing access to U.S. investors.
Heightening anti-China rhetoric and month-end profit booking saw risk aversion amid Monday’s Asia session as broad-based benchmarks retreated on open. Both Australia and Japan decline by 125 and 330 points respectively, whilst Hong Kong gapped lower by 130. Futures across U.S. and European markets caught wind and followed similar price action.
Mute volatility across Wall Street as American’s celebrated thanksgiving. Meanwhile, for the first time since the election, President Trump answered questions from reporters. Among the more interesting remarks, Trump has promised to leave the White House once Joe Biden is confirmed by the electoral college.
Across the Atlantic, European indices grind lower amid renew doubts over the highly anticipated vaccines and the economic damage existing restrictions will have on future growth. Following widespread scrutiny over their COVID-19’s vaccine efficacy, AstraZeneca has been forced back into conducting additional global trials. Preliminary results were peculiar, revealing a lower dosage had a better efficacy rate at 90%, whilst a higher dosage reduced the figures down to 70%.
The FTSE was the worst hit, sliding 0.67% after U.K. health minister Hancock announced swaths of England will not only remain in lockdown after December 2nd, but will also be placed under new, stricter tier 3 measures. In tier 3, households cannot physically mingle, hospitability and entertainment venues will be all be shut, and travel is discouraged. Boris Johnson defended the measures stating, “if we ease off now, we risk losing control…forcing us back to a new year national lockdown”.
In Asia, worsening diplomatic ties between Beijing and Canberra saw the S&P200 edge lower as China slap tariffs on Australian wine. Meanwhile, surging industrial profits in China boosted Hong Kong and Japan higher intraday by ??? and ??? respectively.
Rotation out of cyclical firms saw the S&P500 and Dow take a breather after hitting all-time highs whilst Nasdaq took the opportunity to make up for lost ground from tech’s recent under performance. China’s president grabbed headlines yesterday as Xi congratulated Joe Biden’s election win with messages entailing hopes of a “healthy and stable” U.S. – China relationship with “no conflicts” and “no confrontations”. President Xi’s remarks come amid further U.S. sanctions on Chinese firms deemed facilitating Iran’s missile program.
European markets ease off momentum following a series of recent positive announcements boosted broad based benchmarks to multi-month highs. Meanwhile, the FTSE suffered a 1% decline on Wednesday as Brexit tension flare again. European negotiators were unwilling to budge on rules surrounding swap trading by E.U. banks in the U.K. A no-deal Brexit would see disruption in the derivatives market worth $50tn a year.
Mixed results across Asia with Australia following overnight Wall Street sentiment easing 45 points intra-day. Whilst Hong Kong remains unchanged, the Nikkei soared 1.1% as China’s foreign minister Yi and newly elected Japanese Prime Minister Suga forge multilateral trade deals. Both nations have also agreed on a business travel bubble to improve relations.
Widespread risk-on sentiment as global indices continue to savour President-elect Joe Biden’s formal transition into office and the incoming business friendly administration appointees. Janet Yellen’s pick as Treasury Secretary dramatically improved global outlook as the Dow cracks 30,000 for the first time. Alongside Tesla’s debut into the S&P500, with the electric automaker soaring 6%, the broad-based benchmark also settled at historic highs. On the back of Wall Street’s buying frenzy, Nasdaq gained 1.5%.
Though it’s not all smooth sailing ahead. Last week, departing Treasury Secretary Mnuchin retracted $429bn in emergency lending facilities from the Fed and re-directed funds towards the Cares Act. Of which requires congressional approval to access in a Republican controlled senate floor. This move drastically cuts Yellen’s war chest down to just under $80bn.
Prospects of easing social restriction measures in France saw the STOXX and CAC cracking 9-months high again. Among European states, Frances’ virus curbs have successfully rounded the curve from daily infections of 86,000 to 9,000. President Emmanuel Macron is expected to announce relaxation of lockdown rules today. Elsewhere, Australia and Japan are both on course for the best month on record
Short of a full concession, President Trump directed the General Services Administration to initiate formal transition processes following Michigan’s election board certifying results sealing President-elect Biden’s win. Wall Street further welcomed news that Biden’s administration has selected Janet Yellen to serve as Treasury secretary. The first women in the role, but more importantly a friendlier figure towards big banks and financial markets than progressive picks like Senator Elizabeth Warren. By the end of Tuesday session, both the S&P500 and Dow rallied 0.7% and 1.3% respectively, though the Nasdaq underperformed on the back of AstraZeneca’s vaccine announcement. Unlike Pfizer and Moderna, the new vaccine boast a 70% prevent rate, rising to 90% under certain conditions. However, the University of Oxford coordinated trial drew harsh criticism for its lack of sample size.
Meanwhile, European indices gapped higher on open but failed to follow through during yesterday’s session. Despite promising vaccine developments, daily infection cases across the continent remains high whilst the economic damage from wide ranging lockdown measures becomes more apparent.
Asia’s poised to climb following a boost in sentiment from the overnight U.S. session. Thus far, Australia has rallied 0.7% intra-day and remarkably of the past 16 days, 14 has ended in positive territory. Likewise, the Nikkei resumed their winning streak hitting a 29-year high whilst Hong Kong gapped up 0.5% on open.
Vaccine sentiment that propelled the S&P and Dow to all-time highs on Monday has begun fading as the resurgence in COVID infections saw investors rotate back into stay-at-home tech firms. Among Wall Street yesterday, Nasdaq was the only benchmark notching higher, by 0.8%. Meanwhile, the Dow underperformed, and S&P remained unchanged following a clash between Treasury Secretary Mnuchin and the Federal Reserve. Much to the Fed’s opposition, Mnuchin is pulling the plug on the central banks $445bn emergency lending facilities for struggling businesses. Though the program was largely unused, its existence was a source of confidence that relieved market anxiety about the broader economy.
Likewise, ever increasing piecemeal social restriction measures has taken the wind out of U.K. and European indices as many settled within a plus/minus 0.5% range from the previous days close. A recent economist poll anticipates the Euro zone will contract 2.5% in Q4 2020 following a 12.6% rebound in Q3. Whilst Brexit negotiations will move online after a member of the EU team contracted COVID-19. Time is running short as both sides seek to conclude a draft in time for it to be legally checked, translated and ratified before December’s deadline.
A lack of major news in Asia see’s mute activity across Asia-Pacific markets. Experts in Hong Kong foresee a fourth-wave following a rebound in cases with 12 confirmed and more than 20 suspected. Whilst Japanese PM Suga warned the country will move ahead with restrictions of their own, South Australia will come out of hard lockdown on Saturday after contact tracers were misled by an infected individual.
Pfizer one ups Moderna with final clinical-trial data revealing a 95% efficacy rate. Bringing into question whether an additional 0.5% outweighs the vaccine’s tougher storage conditions and shorter shelf life. Pfizer is expected to apply for U.S. and E.U emergency regulatory authorization within days. Despite recent vaccine breakthroughs, Wall Street retreated for a second-straight day, as resurging COVID-19 cases temper U.S. States to set tighter rules on daily American lives. In the meantime, unemployment benefits for more than 10 million workers is set to expire in December unless congress passes a renewed stimulus package.
Across the Atlantic, European indices take a late-session tumble following an uptick from Pfizer’s announcement. Late-session saw investors remain cautious about short-term prospects for a vaccine, considering most health experts expect shots to be widely distributed only in the latter half of 2021. The FTSE fell 0.5% ahead of Thursday’s EU leaders’ video conference summit, seen as the final deadline for Brussels and Boris to strike a draft Brexit trade deal.
Coming into Asia, both Australia and Hong Kong benchmarks gapped lower on open by 0.6% whilst Japan remained relatively unchanged. The S&P200 recovered the entirety of lost ground intra-day after consensus-beating Aussie employment data revealed a resilient labour market.
Wall Street retreated following Fed Chair Jerome Powell downplaying vaccine optimism, citing amid current rising infection rates, there exist significant economic downside in the near term and any recovery has a long way to go. Powell’s sentiment further reinforced by Tuesday’s U.S retail sales data failing to meet analyst expectations. With American consumer spending curtailing as we fast approach Christmas shopping season, alongside a lack of fiscal development in congress, 2020’s year-end outlook is becoming seemingly bleak.
Following suit, European markets corrected from an 8-month high as tighter piecemeal COVID restrictions begin to weigh in on short-term economic outlook. Most recently, post-lockdown, the U.K. government is contemplating stricter controls than the previously announced three-tier system. Sweden too has stepped up efforts, with a new ban on public gatherings and a recommendation to avoid public transport.
The S&P200 defied overnight sentiment edging higher to a new nine-month high and revelling in their first glitch free day of the week. Meanwhile Hong Kong rose 1.1% intraday as China shrugs off news that the U.S. Securities and Exchange Commission is contemplating delisting Chinese companies on U.S. stock exchanges for not complying with American auditing standards. Thus far, Beijing has blocked attempts by U.S. regulators in auditing firms citing confidentiality. Elsewhere, Nikkei set to post two consecutive days of loses as the nation faces COVID strife of their own and investors repatriation results in the Japanese yen appreciating 4 days in a row.
Moderna outshines Pfizer delivering an experimental COVID-19 vaccine with a 94.5% efficacy from late-stage trials. Not only does Pfizer-BioNTech’s vaccine underperform in terms of effectiveness, distribution is complicated as their shots must be transported at -75 degrees Celsius with a 5-day shelf-life. In contrast, Morderna’s alternative can be shipped at -20 degrees Celsius with a 30-day lifespan. As headlines broke consecutive daily records settling at all-time highs. Nasdaq though, continues to underperform medium-term but nonetheless shrugged off cyclical rotational woes ending up for the day. News that Tesla will join the S&P 500 index on Dec. 21 further buoyed tech stocks.
Likewise, amid consecutive weeks of vaccine breakthroughs, European investors cheered the STOXX 50, CAC 40 and IBEX 35 to an 8-month high whilst the FTSE and DAX underperformed, weighed by on-going Brexit tensions. Thus far, investors have been pricing a faster pace in economic revival despite actual vaccine deployment still a long way away.
Mixed results in Asia as Australia drifts higher in anticipation of the RBA releasing monetary policy meeting minutes. Japan retreated intra-day following a meteoric rise since the start of November. Meanwhile, Hong Kong loses ground as China’s sweeping crackdown in financial markets and political arenas begin to ripple throughout.
The ongoing U.S. election saga saw a hint of Trump accepting defeat as the President tweeted “He won because the election was rigged” only to recanted it moments later announcing, “I concede NOTHING”. Despite a transition in chaos and deteriorating health situations across the country, Wall Street nonetheless notched higher last Friday with the S&P500 closing at all-time highs. Whilst the Dow is just 25 points shy from following suite, the Nasdaq continues to underperform amid a rotation towards cyclical shares. Vaccine hope continues to fuel optimism, especially as we will likely seek Moderna’s trial results this week. The incoming administration COVID-19 advisers further relieved concern that they would opt for targeted local restrictions as opposed to nationwide lockdowns. Likewise, European indices and the U.K recovered lost ground from Thursday’s brief correction.
Asia markets poised for gains followings the world’s largest Asia-Pacific free-trade agreement deal signed on Sunday during the 37th Asean Summit. Among the most noteworthy supporters were Australia, China, Japan, and South Korea. The agreement is said reduce tariffs, unify e-commerce rules, and alleviate logistic strains via universal regulations. An expected 26.2tn worth of GDP will flourish under the deal.
Following better than expected GDP figures in Asia session, the Nikkei settles comfortably at a 29-yr high, rallying 0.9% intra-day. Futures saw the S&P200 surge 40 points only to be subsequently weighed by disruptions in the ASX equity markets. Share trading has been paused after the exchange discovered market data issues. Hong Kong enjoyed a 0.97% gap higher but retreated following profit-taking.
Heading into Friday, Pfizer’s vaccine hope could not withhold the increasing risk pertaining to COVIDs’ relentless second-wave. With corona back in headlines, Nasdaq remained stable whilst the S&P500 and Dow retreated from all-time highs. America’s coronavirus complacency see’s daily new infections constantly breaking new highs, with yesterday figure stood at 142,860 cases. Zero congressional coordination has starved States of much needed stimulus support, whilst lockdowns and curfews have been limited to piecemeal implementation. Thus far, New York signalled closing down schools again. And in Chicago, the mayor urged residence to stay indoors.
However, there is no guarantee stricter lockdowns would alleviate the virus’s spread as Italy surpasses 1 million cases, France with 35,897 daily new cases (up from 22,180 on Tuesday) and Britain tops 33,470. Central banking heads also remarked yesterday a COVID-19 vaccine alone is not to enough propel nations out from economic troughs. Consequently, this slew of less optimistic news saw European shares retreat from monthly highs as the STOXX slid 1.8% after having gained 12.5% this month.
Asia saw mixed results with Australia and Japan unchanged while Hong Kong gapped 1% lower. In between US – China, the special Administrative territory is feeling the brunt of rising disputes. Just yesterday President Trump signed an executive order prohibiting U.S investment into Chinese companies with connections to the military. Hopes that a Biden would improve relations was quashed by China’s former finance minister whom remarked “Even if Biden is elected, the U.S. suppression of China will be inevitable”.
Modest gains on Wall Street amid Veteran’s day while Nasdaq back in favour jumping 2.3% as stay-at-home firms recuperated some ground following this week’s sell off. Apple and Amazon were among the better performers, higher by 3.04% and 3.37% respectively. Investors sought refuge in tech as America struggles to contain their second wave. Recent stats in new daily infection cases topping 139K saw New York implementing a 10pm curfew on bars and restaurant. Other risk has risen surrounding the lame-duck period and disruption President Trump may cause. Since Joe Biden’s wins, the administration has not shied away from restructuring the Pentagon, increasing geopolitical tension with China and frustrate trade ties with Europe.
Across the Atlantic, European markets held onto vaccine-driven gains, rallying for 3 consecutive days. Comments by ECB President Christine Lagarde further buoyed benchmarks after outlining plans for additional easing in December during yesterday’s ECB Forum. Meanwhile the FTSE advanced 1.4% amid on-going Brexit negotiations. Despite a looming deadline, there is enough optimism a conclusion will be met warranting negotiators to carry on talks next week.
Asia saw profit-taking in Australia as banking underperformed heavily, offsetting gains among other blue-chips. Disappointing machinery orders in Japan resulted in the index edging lower denting prospects for a capital expenditure recovery. Whilst China’s crackdown on both tech and Hong Kong’s democracy weighed down the Hang Seng by 0.8% thus far. The city’s government expelled 4 pro-democracy lawmakers, prompting another 15 to potentially walk-out en masse.
Pfizer’s vaccine continues to grab headlines with the S&P500 and Dow holding steady after Monday’s overreaction. Still an outlier among Wall Street, Nasdaq diverges 1.9% lower for two consecutive days. In addition to investors adjusting bets taking advantage of a cyclical recovery, tech worldwide has been plagued by a slew of negative announcements. Amazon faces anti-trust complaints from the E.U whilst Ant group will return 120bn HKD to investors following a suspended IPO. Meanwhile, China is overhauling antitrust guidelines to reign in on internet monopolies and their growing economic influence.
Despite European member states in partial or full down, broad-based benchmarks surge on ahead on the back of the European Commission expected to approve a contract for the supply of Pfizer’s and BioNTech’s potential vaccine. Investors are willing to look ahead past a pandemic plagued market towards optimism. Not to mention President-elect Joe Biden is expected to restore U.S. – E.U. trade relations.
Mixed results in Asia with Australia ticking higher, Japan remaining relatively unchanged and Hong Kong weighed down by political turmoil after Beijing seeks to disqualify Hong Kong lawmakers deemed “unpatriotic”.
Initial COVID-19 vaccine euphoria saw the S&P500 and Dow surge to all time highs, only to have gains pare off by the end of session. Meanwhile, Nasdaq diverged from Wall Street as investors rotated out of technology stocks whom benefited from this years’ work-from-home norm.
Combined efforts from pharmaceutical drug-maker Pfizer and biotechnology firm BioNTech resulted in the development of an experimental shot that appears 90% effective in stopping COVID-19. Despite a successful large-scale clinical trial, questions remain regarding how safe the vaccine is over the long run. Most recently, final-stage trials of Chinas’ Coronavac vaccine were halted in Brazil citing serious adverse event. A category inclusive of death, incapacitation and hospitalization.
Nonetheless, European benchmarks withstood investor cynicism by holding onto intra-day gains. Leading the pack was Spain, up by 8.6% and France, higher by 6.2%, closing at multi-month highs. Both of whom were hardest hit from the recent resurgence in infections across Europe and anticipating economic slowdown from lockdown.
Global futures and indices extend gains on Monday open following Joe Biden’s win over the weekend as President elect, emboldening risk-on sentiment across markets. Though President Trump has yet to acknowledge the outcome despite 290 electoral votes having been called for the incoming Commander-in-Chief and on the path to 306. The incumbency is pursuing legal means to contest the ballot counts in key battleground states. Nonetheless, Joe Biden will be moving forward today in launching the Democrats transition effort. On the top of the agenda, containing the coronavirus pandemic as the U.S. surpasses 10M cases on Sunday. Shoring up support for a 3.5tn stimulus package in a much-anticipated battle on a Republican-led Senate floor. And reigniting international relations via rejoining global efforts such as the Paris climate accord.
Asia’s session saw Japan rally to highs unseen since 1991, up 2.5% as the Nikkei prices in a future where trade relations with the U.S. would improve. Meanwhile, Australia broke out of a 5-month consolidation, rising as high as 1.4% intraday, whilst Hong Kong remains comparatively mute much like China’s reception with no public congratulations from President Xi. Futures on the S&P500 and Nasdaq is just a tad shy away from all-time highs, though Dow continues to lag. European benchmarks ended Friday with mild losses weary of election uncertainty and growing COVID cases, though is expected to gap higher when London opens.
U.S. election fatigue setting in on day 3 as neither party concedes. Democratic nominee Joe Biden inches closer to the needed 270 electoral votes to win presidency. A definitive win in either Pennsylvania, Georgia, Nevada or North Carolina would assure victory. On Thursday Biden addressed there was “no doubt” he would be elected the 46th president of the United States. Meanwhile, Trumps’ administration files lawsuits as a path to victory claiming illegal vote counting post-election day. Georgia and Michigan judges have already thrown the cases out of court citing a lack of evidence.
As investors abandon pre-election risk-off positioning, momentum continues Thursday with Wall Street rallying for 5 consecutive days regaining lost ground from the week before. Though a gridlocked government would infer a lower probability of a timely and sizeable stimulus package, it would also dim prospects to enact tougher corporate regulations or taxes.
America’s uncertainty failed to hurt European sentiment as broad-based benchmarks followed suit to 2-week highs. Despite a resurgence in COVID cases, strong Q3 earnings and optimistic company outlooks lifted investor spirits. Likewise, fresh quantitative easing buoyed the FTSE higher.
Despite a victor yet to be decided, American democracy achieved a monumental feat with highest voter turnout rate (67%) in more than a century. The current tally stands at 71,825,845 for candidate Biden and 68,258,563 for President Trump. As vote counting progressed through the second day, battleground states Wisconsin and Michigan flipped in favour of Biden, calling a 253 electoral lead ahead of Trumps’ 214. The most probably road to victory for the former vice president is via either Nevada or Pennsylvania whilst the incumbency has an uphill battle to win all remaining battleground states to retain a second term. In any case, the much-anticipated blue-wave never did eventuate and with a divided government expected, a Republican controlled Senate and Democrat majority in the House. The next four years may as well be gridlocked.
Coming into Asia, global indices and futures took a breather from yesterday’s frantic price action which ultimately saw Wall Street make significant headwinds. The prospects of a “do-nothing” government left investors favouring defensive tech stocks in light of cyclical companies that would be benefit from a much elusive stimulus package. Nasdaq rose 4.5%, the S&P500 up by 2.3% and the Dow lagged posting 1.4%.
Global investors brace for U.S. election volatility as votes pour in across America with more than 100m ballets casted early, breaking previous records. Coming into election day, Democrats had hoped for a blue wave, especially across battleground states like Florida, Pennsylvania, Ohio and Texas. With confidence, Wall Street rallied higher by the end of Tuesday’s session with the Dow Jones leading the pack at 2%. Likewise, European indices closed at weekly highs after having one of their best days since June as Biden win is seen to improve trade ties between U.S. and Europe. STOXX initially gapped 0.9% higher before finishing the day up by 2.8%.
During Asia thus far, votes have shown a more traditional distribution of favourability between candidate Joe Biden and President Donald Trump. Other than Arizona, the incumbent holds a comfortable lead in hotly contest key states surprisingly in an electoral college race now considered too close to call. Global broad-based benchmarks have swung wildly between positive and negative territory with Australia and Japan relatively unchanged from Tuesday’s close. Meanwhile, despite Chinese authorities putting the brakes on Ant Group’s IPO scheduled on November 5th, Hong Kong still managed to etch out some gains. Among overnight futures, Nasdaq outperforms as much as 4.4% before settling 2.5% higher.
A day away with Monday polls showing Democrat Joe Biden still ahead nationally by 8.5 points, global indices have seemingly shaken off U.S. presidential election jitters amid European efforts in containing a resurgence in COVID-19. Both the S&P500 and Dow rebounded 0.7% and 1.1% respectively though Nasdaq continues to lag with the tech benchmark edging lower. The tone set by Apple and Amazons’ outlook last Friday has investors rotating into cyclical stocks well positioned to take advantage of an inevitable U.S. fiscal stimulus.
Likewise, European markets followed suit, further buoyed by better than expected factory activity overshadowing recent re-implementation of lockdown protocols among member states. Though morning trading saw a glitch delaying STOXX opening by 1 hr, the index nonetheless rose 1.8% by sessions’ end. Germany and U.K. also posted healthy gains amid on-going Brexit negotiations with the deadline just nine weeks away. A no-deal Brexit would see $900bn of annual bilateral trade tarnished by tariffs and quotas.
Mondays’ mood flowed into Asia’s session with Hong Kong and Japan opening upbeat. Poised to benefit ahead of RBA’s announcement the S&P200 positioned itself higher by 2.3% intra-day as investors price in the expected 15 basis point cut.
Just two days away from U.S. elections, where upon results will set investment sentiment for the remainder of 2020 and dictate American policy for the next four years. A record 98m have voted early already. Sunday polling has Democrat Joe Biden leading the President in the final stretch though key swing states that carried Trumps’ 2016 win remain narrowly fought over. The presidents’ re-election campaign has been persistently plagued by his administration’s failure to contain the outbreak.
A sell-off in tech weighed down Wall Street on Friday, though the S&P500 and Dow managed to end the session higher. Both Amazon and Facebook noted grim profit outlooks for 2021 amid COVID’s resurgence. Elsewhere, reprieve for European markets as strong earnings help prop up broad-based benchmarks after posting their sharpest weekly decline since February.
Coming into Asia today, Australia, Japan and Hong Kong opened with a spring in their step as China released solid manufacturing and services PMI over the weekends. Though futures were a little changed.
A little reprieve on Thursday for global markets following one of the biggest routs since February despite worldwide coronavirus cases rising by more than 500,000 yesterday amid Germany and France locking down. Meanwhile, at least nine states in America broke daily records in new infections.
Nonetheless, Wall Street eked out some gains on the back of tech’s resilience within current quandaries. Quarterly profits from juggernauts like Google, Amazon, Facebook and Apple had exceeded analyst estimates.
Across the Atlantic, fresh stimulus hopes from the ECB buoyed European benchmark higher. Collectively, Euro Zone members will be issuing 1.2tn in government bond sales next year of which 460bn is expected to be purchased by the central bank. The Euro dollar received the news via sinking 70 pips to below 1.7000.
COVID-19 fall out fuels global risk-off sentiment as demand shifts toward safe-haven assets. Wednesday saw French President Macron announce new national lockdowns set to come into force on Friday and estimated to last a month. New measures dictate citizens are only allowed outside to seek essential goods, medical help and work. Schools will also remain open. Meanwhile, German Chancellor Merkel imposed a piecemeal approach to shut bars, restaurant and theatres for November. Likewise, schools stay open and shops too but with restrictions. Across Europe, Spain, Italy, Greece and Portugal reported record daily cases of infections with an increasingly bleak outlook a continent-wide lockdown is approaching.
Economic implications reverberated throughout global markets. The S&P and Nasdaq fell 2.8% and 3.4% respectively whilst the Dow made a 4-month low. U.S. energy stocks were among those hardest hit as they tracked the 4.2% decline in crude oil settling at $39.12. Prospects of demand recovery has stalled, further reinforced by yesterday surprise inventory surplus of 4.3M compared to an expected 1.5M.
Outlook for a global rebound dim ahead of U.S. presidential elections as uncontained outbreaks across Europe and U.S. hinder economic recoveries. While U.S. benchmarks Dow and SP500 closed lower at 0.8% and 1.2% respectively, Nasdaq bucked the trend etching out a minor gain on the back of AMD’s $35bn takeover of Xilinx. Meanwhile, possibility for COVID relief reached zero following the U.S. Senate adjourning for recess till November 9.
Europe paints a similar picture extending losses across the board. The FTSE, DAX and STOXX hit 4 to 5-month lows with France and Spain faring better settling at monthly lows. Investors foresee a slippery slope towards full nation-wide lockdowns after Germany began implementing “light” measures preventing bars and restaurants from opening. Likewise, France considers extending nightly curfews for another month.
Asia opened mixed, with Hong Kong and Japan relatively mute, though Australia rallied 0.6% following solid earnings announcements from blue chips like Afterpay and Blackmores.
With U.S. elections a week away, risk-off sentiment amid fruitless stimulus negotiations and a persistent resurgence in COVID-19 across major financial hubs saw global benchmarks tumble at the start of the week. Prospects for a coronavirus relief bill before election day fell to near zero as House Speaker Pelosi and Treasury Secretary Mnuchin failed to reconcile differences, with the senate floor scheduled for a break starting Tuesday.
Following Wall Street’s disappointing performance overnight, Asia opened with Australia and Hong Kong sinking 1% and 1.1% respectively. Japan somewhat recovered from the initial 0.7% loss on the back of Canon’s forecast beating earnings report. Germany’s blue-chip index DAX led Europe’s declines with a 3.7% plunge dragged down by SAP SE’s pessimistic outlook. The stock slumped 22% as they abandoned their profitable forward guidance attributing from the current pandemic. Meanwhile, STOXX declined 3% amid stricter restrictions in Italy and Spain further dimming hope for a Eurozone economic recovery as business activity is forced to a standstill.
COVID-19 pandemic firmly back in headlines with the U.S. reaching consecutive record number of daily infections at 85,317. France followed suit with cases topping 50,000 as the government imposed upon two-thirds of population with a 9pm to 6am curfew. Italy and Spain fared no better, implementing sweeping measures in attempts to round their second-wave. WHO Director general Tedros Adhanom Ghebreyesus, warned “This is a dangerous moment for many countries” as they “strike a delicate balance” between protecting residents and minimizing economic shocks.
Weekend news impacted Asia’s session with futures and indices opening lower. Australia initially rode against the wave, rallying as high as 38 points intraday before succumbing to the prevailing global pessimistic tone. Fortunately, Hong Kong remains closed today celebrating Chung Yeung Day.
Fading U.S. stimulus hopes left Wall Street whipsawing during last Friday’s session with all three major benchmarks relatively unchanged. Progress in bi-partisan negotiations throughout the week had increased the probability of striking a deal before November elections. Come Sunday though saw both congressional parties accusing each other of moving the goalpost.
Meanwhile, European indices bucked Wall Street’s trend ending higher. The FTSE and STOXX rose 1% and 0.8% respectively with France leading the pack higher by 1.1% on the back of reassuring news that Brexit trade talks between U.K. and E.U. will continue to October 28th.
Ahead of America’s final presidential debate between President Trump and candidate Biden, Wall Street exhibited a choppy U.S. session, starting in the red, the Dow and S&P500 recovered back into positive territory. Across the Pacific, U.K. and European markets trimmed Wednesday’s losses following Britain’s Finance Minister Sunak announcing new measures to protect furloughed workers and cash grants for affected businesses.
In Asia, subsequent after a heated U.S. debate, markets were mixed with Hong Kong rallying 0.72% whilst Australia and Japan slid lower. Much of prevailing mood is still dependant upon the whipsawing U.S. stimulus saga. Yesterday, House Speaker Pelosi and Treasury Secretary Mnuchin signalled we’re “just about there” as one of the four key disputed points was near resolving. The remaining points to settle include state and local government aid, school funding and liability shielding for businesses from coronavirus related incidents.
Stimulus talks in America drag on resulting in a choppy Wall Street session overnight, ultimately edging the benchmarks lower. Despite Tuesday’s deadline, House Speaker Pelosi kept hopes alive stating she and the White House ‘has a prospect for an agreement’ but is unlikely to pass a relief bill before November elections. Senate Majority Leader Mitch McConnell has also shown a lack of interest in allowing the bill cross Senate floors before Amy Coney Barrett’s Supreme Court nomination.
U.K and European indices struggle to post gains despite a more optimistic Brexit outlook after E.U’s chief negotiator Michel Barnier signalled a deal is within reach. Discussions will resume with negotiators meeting in London on Thursday, aiming for an agreement by mid-November. Upon the news hitting headlines, the pound rallied over 200 pips to a six week high ending the session at 1.3141 whilst the FTSE sank 2.2% weighed down by losses in exporters. The STOXX tumbled 2%, the FRANC down 2.1% and the DAX is lower by 1.6% amid intensifying lockdown protocols, hitting the healthcare and construction sector most.
Aftermarket stimulus developments saw overnight Wall Street futures rebound from Tuesday’s lows. Investors were on edge as House Democrats self-imposed deadline loomed with no progress over the horizon. Much to market’s relief, late afternoon House Speaker Pelosi signalled a potential deal before November 3rd saying “I’m optimistic because I do think we have a shared value — not many — but a shared value that finally they want to crush the virus”. Republican’s had made concessions to up their deal to 1.88tn from 1.8tn, closing in on Democrats 2.2tn goal post. Thus far, Pelosi has yet to budge.
Following futures, Hong Kong rallied as high as 1.2% on Asia’s open over renewed stimulus hope. Likewise, Japan up 0.5% as the export-dependent nation, of which approximately 20% of total exports is reliant upon U.S. trade. Elsewhere, Australia opens relatively unchanged after the benchmark surged 6% MTD on the prospect of November rate cuts and a growth boosting government budget.
Wall Street falters as stimulus deadline looms Tuesday with indices ending the past 5 sessions lower. Despite House Speaker Pelosi remaining optimistic that legislation could be devised in the final hours of the strait. Thus far, neither congressional parties have budged on their $1.8tn (Republican) and $2.2tn (Democrat) proposals. Regardless, Senate majority leader McConnell will put forth a $500bn piecemeal deal to the floor for vote on Wednesday.
Worldwide COVID-19 cases officially passing 40M on Monday weighs on European markets. Broad-based benchmarks fell yesterday, with the STOXX leading the charge lower by 1.56%. Italian cases hit a daily record, with the government responding via implementing evening 9PM curfews. Likewise, Spain recorded their 1 millionth case as the nation reignites lockdown procedures. Pessimism across the channel outweighed signs of progress on a Brexit trade deal. Members of the House of Lords had signalled their willingness to remove Boris Johnson’s controversial clause in relation to Ireland. Nevertheless, the FTSE was down 0.8% by sessions end.
Global indices and futures edged higher following Asia’s open despite risk-off sentiment on Wall Street from previous weeks end. The last two hours of Friday’s session saw Wall Street erase intraday gains ending down for the day. Investors seemingly unwilling to hold onto weekend exposure in the face of U.S. stimulus risk. On Saturday, House Speaker Pelosi set a deadline dictating certain levels of progress must be met by Tuesday for a stimulus deal to be signed before November elections. Pelosi and Treasury Secretary Mnuchin agreed to speak again on Monday.
Across the Atlantic, European indices continue to track the developments of COVID’s resurgence across the continent. Economic recovery efforts have been curbed as government re-implement stricter piecemeal lockdown measures. Nonetheless, a little reprieve for Europe’s markets with drug maker Pfizer announcing a potential coronavirus vaccine, ready by years end. The DAX, FRANC and STOXX responded via modest gains in positive territory between 1 – 1.2% respectively.
No-deal Brexit headlines continue to plague U.K with P.M. Boris Johnson informing businesses to prepare for a non-agreement. FTSE though eked out 0.7% gripping onto hopes that negotiations will persist in the following week despite political rhetoric between Brussels and Britain. Sign’s that the conservative party was willing to water down Johnson’s ‘walk-away’ demands further buoyed U.K markets.
European indices and global futures tumbled amid London session as EU leaders refused to make concessions just hours before PM Boris Johnson was expected to announce whether the U.K. will walk away from negotiations. Brussels left the ball on Johnson’s court, of whom expressed his disappointment and will respond on Friday.
Nonetheless, by the end of U.S. session most broad-based benchmarks recovered on improving stimulus sentiment. Speaker Pelosi re-iterated the urgency for a relief package before elections as she continued talks with Secretary Mnuchin. President Trump further voiced his willingness for a bi-partisan deal exceeding $1.8tn.
Among the weaker performers of the day, Euro STOXX 50 settled 1.2% lower as investors were unnerved over accelerating COVID cases in Europe. In so far that Italy registered close to 9,000 daily cases, up from 7,000 while France jumped to 30,000, up from 22,500 the day before. Likewise, cases in Poland rose to a record 24% higher. With impending new restrictions, investors are growing weary the pandemic will continue into 2021 crippling Europe’s recovery.
Despite U.S. threats to add China’s Ant Group to a trade blacklist, Hong Kong rallied 1.3% whilst Australia and Japan slumped. The prospect of Ant Groups dual listing in Hong Kong and Shanghai raising a record $35bn USD kept the market float.
On-going stimulus saga continue to plague global markets after Treasury Secretary Steven Mnuchin extinguished hope that congressional parties could strike a stimulus deal before November elections. Banking also weighed heavily on Wall Street as Wells Fargo tumbled 6% on a pessimistic forward guidance despite posting positive earnings last quarter while Bank of America sank 5.3% with the banks’ trading arm’s performance disappointed when compared to Goldman Sachs.
Meanwhile, European indices edged lower with prospects of more lockdown ahead while vaccine delays further dent sentiment. Just recently Italian P.M Giuseppe Conte implemented new social distancing restrictions in restaurants, sports and school activities. Across the English Channel, rising Brexit uncertainty lingers onto top of the FTSE, with the benchmark falling 1.1% as Boris Johnson’s self-imposed deadline is set to expire today. Though the pound recovered, up 80 pips to an off-remark made by the U.K Prime Minister signalling he won’t abandon Brexit talks.
Following four consecutive days of advance, Wall Street retreated on Tuesday as U.S. stimulus negotiations stalling grabbed headlines. House Speaker Pelosi rejected a piecemeal $500bn proposal brought forth by Senate Majority Leader Mitch McConnell, far smaller than the $2.2tn passed by the House. In a rare glimpse in agreement, Trump defied Republican narrative tweeting “STIMULUS! Go big or go home!!!”.
Global mood was further dampened after Johnson & Johnson paused COVID-19 vaccine trials citing unexplained illness in participants. Likewise, Eli Lilly & Co halted their trials citing safety concerns just weeks after AstraZeneca suspended their late-stage trials. Given the plethora of negative news European indices snapped a 3-day winning streak as investors recalibrated expectations of when a cure will eventuate while the continent braces for a resurgence in cases. Banking slid over rising odds the ECB will implement more stimulus to combat COVID’s resurgence.
Asia opened mixed with Japan recovering from overnight wounds whilst Hong Kong slips lower following China’s President Xi Jinping’s nation-wide address, celebrating the 40th anniversary of the Shenzhen Special Economic Zone establishment. Australia rallied on the back of Aussie household sentiment index surging 11.9% in October despite continuing dire circumstances in Victoria.
Amid observance for Columbus Day, U.S. technology company’s led Wall Street’s advance with Amazon, Apple and Twitter posting gains between 4.75% - 6.35% respectively. A combination of U.S. stimulus negotiations progressing and a COVID-19 resurgence in Europe (benefiting stay-at-home tech firms) was partly fueling Monday’s rally.
Despite Italy and U.K. preparing for stricter restrictions jeopardizing an already fragile economic recovery, European benchmarks tracked Wall Street’s overnight gains hitting a five-week high.
Coming into Asia’s, the Hong Kong Stock Exchange remains closed as the territory braces for a level 8 typhoon whilst Australia continues to outperform rallying 0.6% on open. Since October, the Aussie S&P200 has been end in the green 6 of the last 7 sessions. Japan remains in consolidation as investors await direction from the newly elected Prime Minister Suga.
Despite a plummeting approval rating and conflicting health status reports, President Trump reassured Wall Street on Friday by increasing his previous stimulus proposal to 1.8tn. Moving closer to Pelosi’s 2.2tn goal post. As investors grew more hopeful, U.S. indices settled at weekly highs by the close of the session. Likewise, Europe edged higher on Friday as retail firms upgraded earnings outlook defying resurging infection rates.
With U.S. observing Columbus Day and Canada celebrating Thanksgiving, Asia pointed to a mixed start. Hong Kong rallied 1.2% following the PBOC announcing a capital restriction adjustment over the weekend. Australia crept higher whilst Japan slumped as Monday data showed wholesale inflation remains negative for 7 consecutive months, heightening deflationary risk.
Asia is off to a mute start as investors mulled whether taking on weekend volatility outweighed risk if U.S. stimulus talks were to derail over Saturday and Sunday. Following Trump personally torpedoing congressional relief negotiations, the President’s subsequent backflip fuelled a 2-day rally across global indices. By the end of yesterdays session, Wall Street closed at monthly highs with the S&P500 leading the charge. Likewise, European indices hit a 3-week high despite Brexit risk and newly imposed Iranian bank sanctions protruding into investor mood.
With talks resuming between House Speaker Pelosi and Treasury Secretary Mnuchin, the U.S. dollar edged lower against a basket of major currencies. Though Pelosi has rejected a stand-alone airline bailout, her party has revised down their proposal to $2.2tn (from $2.4tn). Also. as election odds blow out in favour of Joe Biden, investors are seeing an increasing likelihood of stimulus if Democrats won the presidency. Of exotic currencies, China’s yuan rallied 0.5% on open today after a week-long Chinese holiday. A resurgence in COVID-19 cases have set back Thailand’s plan to reopen for tourism. As a result, alongside continuing anti-government protest the Thai baht continues to under perform among Asian currencies against the greenback.
The whipsaw continues with Wall Street reversing Tuesday’s losses closing at intra-day highs. House Speaker Pelosi indulged Republicans in negotiating an airline bail out, whilst Trump performed a piecemeal back flip signalling his willingness to sign a stand alone $1,200 stimulus check for the American people.
Despite Brexit negotiations breaking down again, the FTSE rose 0.93%, following U.S. optimism. Two aspects of the deal remain an obstacle. Restrictions on state subsidies and fishing rights for European countries in British waters. While Boris Johnson strung along threats to walk, E.U. officials have stated they will not be pressured into making concessions. Elsewhere, mixed results from European indices with Dax up 1.4%, STOXX edging ever slightly higher and France unchanged.
Indecision dominated markets this week with Trump abruptly ending talks with Democrats via a single tweet. As hope for a secondary coronavirus aid package evaporated, so too did Wall Street's gains for the day. A 180-backflip following the Presidents tweet on Saturday stating “USA…needs stimulus. Work together and get it done”. Moment afters the announcement hit news headlines, Dow Jones plummeted 500 pts. Following suite, the S&P 500 and Nasdaq down 60 pts and 260 pts respectively.
Contagion from U.S. seeped into European benchmarks with the STOXX erasing a 0.7% lead, boosted by banks initially, to end the session down 0.8%. Germany’s DAX fared no better, up 0.8% at one point on the back of better than expected factory orders, only to close -0.75% lower.
Following President Trumps discharge from Walter Reed hospital after being treated since Friday, Wall Street and European indices reacted positively, ending their sessions near intra-day highs. Investors are hoping Trumps personal experience with the virus will increase the odds in pushing a fiscal deal sooner. Current negotiations have seen piecemeal concessions between both congressional parties, with Democrats now seeking a $2.2tn package whilst Republicans have upped their offer to $1.6tn.
U.S. energy, health and tech firms were the biggest gainers for the day. Likewise, Europe’s oil majors surged on the back of crude prices elevating 6%, settling above $39. A worker’s strike in Norway saw 6 offshore oil and gas fields cease operation cutting off global production by 330,000 bpd. Capacity is expected to decrease further as more workers join the strike.
Global indices initially declined sharply after news broke on Friday revealed U.S. President Donald Trump had tested positive for COVID-19. Alongside the risk-off sentiment, investors subsequently piled into gold and the Japanese yen. Nonetheless by the end of the U.S. session, much of the shock was reversed as further details released by the administration suggest Trump only has a mild case.
Despite confusion over the weekends, from contradictory accounts of the president’s prognosis to the severity of drugs administered, futures and indices were off to a solid start in Asia session today. Australia rallied as much as 1% on open, with Hong Kong and Japan gapping up. Futures on Wall Street benchmarks pointed higher, set for gains when the underlying opens.
Since Asia’s open, the greenback lost ground against most G7 currencies. Likewise, the yen has retreated all risk-off gains from Friday. Crude continues to drift lower, touching $36.51 as demand outlook remains vulnerable. In the face of inventory deficits, resurging COVID cases hampering global demand, especially in Europe, persistently grab headlines.
Despite Tuesday night’s chaotic presidential debate between President Trump and candidate Biden, Wall Street ended Wednesday’s session higher as Democrats passed a 2.2tn stimulus bill in the House. Unfortunately, as House Republicans thoroughly rejected the package, the likelihood of a Republican controlled Senate approval is minimal. Nasdaq led the charge, up 1.7%, carried by tech juggernauts Amazon, Apple and Microsoft.
Elsewhere, European benchmarks struggled to post gains as pharmaceuticals earning disappoint investors and oil firms slip from worsening crude prices.
Asia’s session fared no better as Australia fell on open. Japan resumed trading (lower) after an unprecedented one-day outage on the Tokyo Stock Exchange due to a hardware glitch. Nonetheless with China and Hong Kong on holiday due to Mid-Autumn festivities, subdued trading is expected till London opens.
The U.S. dollar fluctuated against most currencies on Wednesday, as the market had hope for another economic stimulus plan, which improved risk sentiment. The plan may help alleviate the economic shock caused by the recession caused by the coronavirus epidemic.
Overall, the U.S. dollar has experienced its worst quarter since September 2017, falling by about 3.5%. Investors expected the economy to recover rapidly after the coronavirus epidemic. This prompted investors to withdraw from safe-haven assets and buy riskier High currency.
The U.S. dollar fell against the Japanese yen and weakened against higher-risk currencies such as the Australian dollar, New Zealand dollar and Canadian dollar.
Oil prices dropped again. The crude oil fell more than 5% during the day to 38.57 US dollars per barrel while Brent oil fell more than 4% to 41.11 US dollars per barrel. Vitol Group, the world's largest crude oil trader, said that due to the new round of lockdown measures triggered by the epidemic, the recovery of global crude oil demand has slowed, and there is limited room for oil prices to rise in the fourth quarter.
Vitol Group Executive Committee member Chris Bake said that before entering the fourth quarter, the market originally expected oil demand to improve, but now demand has become more uncertain. He said that the demand for refined oil products is weak and there are large inventories.
The Organization of the Petroleum Exporting Countries (OPEC) and crude oil producing countries including Russia reached an agreement on production cuts in April, prompting a rebound in international oil prices. However, there have been no major moves to boost oil prices. The price of Brent oil still has fallen by 30% year-to-date.
Sterling increases broadly yesterday after Bank of England (BoE) Deputy Governor voiced strong opposition to setting negative interest rates, saying that the benchmark could not be lowered any further without counter-productive results. “I see the effective lower bound [for interest rates] still at 0.1 per cent which is where Bank rate is at present. It is useful to stress that,” Dave Ramsden, deputy governor for markets and banking, said.
A lack of major macroeconomic data in the day ahead, combined with China’s Mid-Autumn Festival leaves global indices and futures off to a mute start in Asia’s session. Despite posting three consecutive weeks of losses, Wall Street surged in the latter half of Friday’s session with the Nasdaq, S&P500 and Dow posting gains of 2%, 1.3% and 1% respectively. U.S. Technology firms remain in investor favour, resilient to renew virus fears whilst European benchmarks were hampered by rising inflection cases. Worries are mounting over the possibility of stricter social lockdown measures across northern Britain and London.
Since money laundering allegations on the 21st, the U.S. dollar index has enjoyed a resurgence in popularity as investors sentiment turned risk-off and sought safe-haven attributes. The appreciation further fueled by a lack of definitive clarity by Chairman Powell, on the Fed’s new guidance framework. Mixed with potential volatility arising from Tuesday’s Presidential debate, the greenback nears a 2-month high. Elsewhere, a final round of Brexit trade deal negotiations scheduled Monday saw money flows out of Europe.
The U.S. Dollar remains the strongest currency over the week, followed by Yen, as people are avoiding risk. European stocks cautiously inch higher. Sterling rebounds slightly, with some support the new jobs support scheme.
The U.S. Dollar Index, that measures the strength of the U.S. dollar against a broad basket of currencies, rebounded from a low of 91.75 to 94.50. The rebound happened since the Federal Reserve keep the interest rates at the bottom until the end of 2023. The uptrend of US dollar has put significant pressure on commodities like gold and silver. Metals has suffered a significant decline from the recent highs.
Recent rising COVID-19 cases and threats of lockdown in Europe, along with US general election on November will be the main concern in the market. Right now, the unclear direction over coronavirus policy and lack of new fiscal stimulus plan are causing a new level of uncertainty in the market. Concerns and anxiety have been rising about the second lockdown in the world especially in Europe, contributing more anxiety of renewed restrictions in the US.
Broad-based benchmarks dragged down globally by banking following a report released by Buzzfeed alleging rampant money laundering practices between 1999 and 2017. Suspected amount of activity equated to $2tn. Declines on Wall Street were further exacerbated over deteriorating prospects that a secondary stimulus bill will fail to reach an agreement by September’s end as the U.S. Senate remains in stalemate over the size of the relief package. European indices fell their most in 2 months over renewed piecemeal restriction measures in the U.K, Demark, Greece and Spain. Sparking fear that it may lead to a second nationwide lockdown. Travel and leisure shares felt the brunt of concerns. Despite a cascade of negative news, Australia and Hong Kong gapped higher on Asia’s open with Japan edging down.
A lack of optimistic news ended Fridays’ session risk-off as global indices continued to slip. Investors remained watchful over the weekend amid a persistent virus pandemic, rising geo-political spats between China versus the world and U.S. election risk as rhetoric between both parties intensify. Asia’s off to a mute start with Japan on holiday, embracing Respect for the Aged Day.
Mixed results left the U.S. dollar index relatively unchanged against G10 currencies. Yuan retreated as China kept the lending steady for 5 straight months. Hong Kong Monetary Authorities sold another 3.31bn HKD in defending the lower 7.75 band. Elsewhere, the consolidation in gold continues to tighten whilst Bitcoin settles above the 10,000 level.
Recovery in crude oil prices was halted on Friday as news of inventory gluts and lackluster global demand grabbed headlines. China, the second largest oil import is expected to cut imports by 10% for the coming month. While recent data out of U.S. sees fuel consumption down 13% year on year. News of Libyan oil fields restarting production further added to the headwinds.
Bad news is good is news as Wallstreet recovered ground from a mid-session drop despite less than ideal jobless claims and housing data. Slump in banking weighed down European benchmarks. Record low near zero interest rates and continuing quantitative easing have squeezed traditional banking margins. The gradual acceptance of alternative online banks offering digital wallets have also chipped away at market share. For the lack of data ahead, Asia is off to a mute start as investors digest the weeks monetary policy decisions and await further clarity from government contemplating additional fiscal stimulus.
Yesterday’s session ended with the greenback losing all gains from Wednesday. For the past 2 months, the U.S. dollar index has consolidated between the 92’s and 93’s since the initial stimulus measures began expiring in August. Reluctance by the Federal Reserve to expand bond-purchases beyond short-dated securities is further fueling lackluster volatility. Upon the horizon however, aid negotiations are back on the table as President Trump diverged from Republican views signalling his willingness to sign a $1.5tn stimulus to plan. House Democrats have urged Speaker Pelosi to bring up a new relief bill to the floor for a vote. Swing district members have pressed for a $2.2tn deal whilst hard liners want a vote on a $3.4tn deal instead.
Wallstreet reacted poorly to Federal Reserve Jerome Powell’s FOMC remarks as broad-based benchmarks retreated. Despite signalling rates will be left near zero through till 2023 ensuring 2% inflation over time will be achieved, the Fed fell short on implementing additional easing, targeting long-dated bonds. European indices ended the session mixed. Disappointing U.S. investor sentiment flowed into Europe however was offset by a continuing strong retail sector quarterly result. Indices and futures fell on Asia open as time allowed markets to sufficiently digest the implication of Powell’s press conference. Thus far, Australia has slid 1.1% while Hong Kong fell 1.6%, and Japan edged 0.8% lower.
Asia’s off to a quiet start as indices await the Federal Reserve’s economic projections and policy statement scheduled today. Wallstreet found support posting 2 days of consecutive gains anticipating a more flexible dovish tone given Chairman Powell’s greater tolerance to above norm inflation. An unexpected jump in ZEW economic sentiment coinciding with quarterly profit beating forecast in fashion retailers saw European indices boosted higher. Luxury good stocks like LVMH, Kering and Hermes also gained on the back of China’s first positive retail sales figure since January.
Apart from the yen, other G7 currencies eased off against the greenback ahead of tonight’s Fed meeting. As Yoshihide Suga cements his position as Japan’s new prime minister, repatriation in the yen is steadily growing with USDJPY at 105.44 by yesterday’s session end. Though Suga has reiterated in continuing his predecessors “Abenomics”, many doubt whether additional easing can be pursued considering the BOJ is already overextended. Debt to GDP is also one of the highest among developed countries, a concern for Suga given his first point of order is ponder whether an extension of fiscal aid is warranted.
Wallstreet bounced on the back of mega multi-billion-dollar deals from Softbank’s sale of chip designer Arm to Nvidia for $40bn, to Oracle outbidding Microsoft for social media platform TikTok. Both Nvidia and Oracle gapped above 5% on open, with the former ending the session up 5.82%. Likewise, the latter held onto most gains, up 4.32%. Europe ended the session relatively unchanged as gains in tech and travel offset losses from energy. Despite optimistic retail sales and production data out of China this morning, Asia is off to a mute start. Nikkei unchanged on news of Yoshihide Suga’s landslide victory in becoming Japan’s next prime minister with his win already priced in.
Backlash against Boris Johnson’s proposed internal market bill by high-profile ex-prime ministers halted the pounds freefall. Voicing in opposition, Tony Blair, Gordan Brown, John Major and Theresa May as they see Johnson’s unilateral amendment risking the country’s standing and reputation. The bill is currently making its way through parliament whereby later in the week Commons will vote. Elsewhere, the Hong Kong Monetary Authority sold 388m HKD as USDHKD attempted to breach the lower end of the 7.75 – 7.85 band during the U.S. session. Despite geopolitical rising geo-political tensions, China’s yuan has confidently settle’s above a 16-month high. Among developed nations, China is expected to be the only one to post positive economic growth at years end. Release of today’s positive leading economic indicators further propelled the yuan’s rise intra-day.
Broad-based benchmarks off to an optimistic start to the week, as Wall Street and Asia – Pacific lost ground for two consecutive weeks. Europe and U.K. fared better, ending last week’s sessions higher despite escalating Brexit tensions between Brussels and Britain. Global indices and futures rallied on Asia open with Nasdaq recovering 1.3% and Australia reaching as high as 1.2%. Nikkei climbed 0.8% as Softbank sells chip designer Arm to Nvidia for $40bn while Yoshihide Suga is poised to win leadership elections today for the ruling Liberal Democratic Party. Consequently, making Suga the next Prime Minister of Japan. Though analyst only see Suga winning 37% of regional party votes, he is expected to obtain 70% of party lawmaker votes, making the overall vote tally over 60%. Thus far, Japanese markets have been receptive of Suga’s appointments especially as he pledges to continue “Abenomics” of his predecessor.
Better than expected but nonetheless disinflationary data saw the U.S. dollar lose ground against majors and gold on Friday. Recent U.S macroeconomic data leaves the precious metal in a conundrum. Previous expectations illustrated price growth as rising amid monumental money supply and a deluge of fiscal stimulus. As such, gold broke historic highs reaching beyond $2,000 as investors looked towards safety against the inevitable inflation. Geo-political tensions between China and U.S. further fueled the rise. However, despite an ever-improving U.S labor market, CPI data has been lackluster. Of interest since late August gold remains in a tight slumber as it awaits further economic clarity.
Price action for the on-going week sees global indices choppy following previous week’s tech-rout, where broad-based benchmarks declined as much as 10%. Evident as Nasdaq saw average daily trading ranges of 4%, though week to date the benchmark has only declined 2.9% and down 1.7% yesterday. S&P500 and Dow also retreated 1.5% and 1.4% respectively. European shares fell on the back of rising tensions between Brussels and U.K as well as ECB’s unchanged policy announcement. For the lack of data ahead, Asia is off to a quiet start, though Nikkei rallied 0.8% on open as Chief Cabinet Secretary Yoshihide Suga outdistances other PM candidates with polls showing he is widely expected to win the title in the ruling LDP leadership election. Suga intends to continue implementing Abenomics, of which entails aggressive monetary and fiscal reform to boost inflation.
The American greenback regained lost ground while EURUSD initially spiked 70 pips over a less dovish tone from the ECB’s monetary policy statement. Only to be stifled by ECB Presidents Christine Lagarde’s Euro dollar remark’s that the central bank is carefully evaluating implications of a strong Euro. Especially as Europe’s economic recovery loses steam. Across the English Channel, P.M. Boris Johnson stoked further tensions as the U.K. government broke international law by overriding Northern Irelands Brexit protocol. The protocol would have allowed goods to travel freely between Northern Ireland (Non-EU) and Republic of Ireland (EU) without custom checks. Amid rising political risk, the pound sank over 200 pips by the end of session. A no-deal Brexit would leave trade between continents in absolute chaos.
Wall Street leading benchmarks snapped their losing streak as investors took advantage of tech darlings deemed heavily discounted from recent highs. Tesla rebounded 10% after sliding 20% into their biggest single-day loss since inception. Pandemic-immune winners Apple, Amazon, Facebook and Google also climbed. The S&P500 rallied 1.7% with Dow trailing at 1.5%. Most European indices erased all losses seen on Tuesday as the market awaits ECB’s monetary policy decision today.
Momentum seen in U.S. did not follow through into Asia, with Australia dropping 1.3% since open while Nikkei edged up slightly. Hong Kong fell on Yum China Holding’s IPO, of whom are operators of well-known brands like KFC, Taco Bell and Pizza Hut. Shares fell as much as 4.1% on their debut today. An utter contrast to Nongfu Spring’s bottled water IPO performance on Tuesday, whom rallied 85%.
Improving risk sentiment saw money flows back into major G7 currencies as the dollar index retreated from a 3-week high. Bitcoin and gold saw bounce off major levels while oil earned reprieve bouncing back from low 36’s to 38 dollars. Elsewhere the central bank of Russia forecast the initial bump in recovery will slow down in coming months with deflationary risk offset by a depreciating rubble.
Tech-rout in Nasdaq leaves no markets unscathed, headlined by Tesla, as the company lost 34% of market cap since the stock split. Nasdaq losing 4% and down four consecutive days. Followed by S&P and Dow posting losses of 2.9% and 2.6% respectively. Brexit negotiations undermined UK and European indices as the deadline looms. U.K. PM Boris Johnson ratcheted up the notion, if a withdrawal agreement with respect to Northern Ireland is not agreed upon by today, he walks. If a no-deal Brexit occurs, at stake is $1tn in trade. As news spread of Masayoshi Son’s $4bn option gambit on U.S. tech through Softbank and the ensuing rout, the company declined 4.81% yesterday, dragging down the Nikkei a moderate 0.8%. Asia set to resume declines felt during U.S session, as Australia, Hong Kong and Japan edges lower on open.
Brexit back in the headlines with the pound sinking 0.9% on a quiet day more or less as the U.S. celebrates Labour Day. Against other majors and gold, the greenback gained slightly. U.K PM Boris Johnson publicly stated on Monday if a withdrawal agreement is not met by Oct. 15th, he’d rather a no-deal Brexit than compromise on conditions seen favourable to the E.U. Markets were reminded of the risk of UK leaving without a deal, especially as the Dec. 31st deadline looms, where the standstill agreement expires.
Elsewhere President Trump ups the ante against Beijing, as he intends to decouple economic relationships between China and the U.S. Tariffs will be imposed on American companies creating jobs in China, as well as forbidding such companies from obtaining federal contracts.
Risk-off sentiment continued into Friday as global indices fells sharply during the first half of the U.S. session before recovering lost ground in the latter half. Wild swings on Nasdaq with the tech benchmark losing 4.8% however ending the session down only 1.5%. Similar price action was observed in other Wall Street and European indices. Speculation afloat after Softbank grabbed headlines with their recent regulatory filings unveiling a $4bn option bet on U.S. tech darlings like Amazon, Microsoft, Netflix and Tesla. The $4bn in options is roughly equivalent to $50bn in stock exposure. With an aggressive option bet of that size, an ensuing feedback loop can drive stocks higher as options sellers are forced to hedge by purchasing the same shares. As experienced in the recent bull market. Hong Kong and Japan were little changed on Asia open, while Australia rallied as much as 1%. Upcoming U.S. Labour day is expected to keep futures relatively mute for the rest of Monday.
Despite better than expected jobless numbers, the US dollar ended mostly unchanged amid the whipsawing price seen throughout Friday. Gold has seemingly found a sweet spot between $1,900 and $2,000 for the past 3 weeks, while bitcoin tumbled, briefly touching 10,000. Seen by many as an important psychological level.
Risk-off with Nasdaq leading the declines, tumbling 4.9% yesterday, followed by S&P500 down 3.2% and Dow sliding 2.4%. Since March lows, Wall Street has powered ahead on unprecedented levels of fiscal and monetary liquidity. Technology stocks made the quickest recovery as many firms were set to benefit from the new work-from-home culture and social-distancing norms. Thursday’s euphoria waned, pulling back tech heavyweights Amazon, Apple, Microsoft and Tesla as investors reassess recent record-breaking price action. Following the US tech rout, European indices lost most, if not all gains made on Wednesday. Asia’s opening fared no better, with Hong Kong gapping down 0.6% and Australia sliding. Though Nikkei rallied on open as uncertainty surrounding Japan’s next prime minister becomes clearer.
Sentiment on America’s economic recovery remains weak as the Federal Reserve keeps their pedal on the printing press. Nonetheless the dollar has managed to rebound back gaining ground against other G7 currencies as global central banks consider further easing. Analyst expect the ECB to add an additional 350bn to the existing 1.35tn bond-buying program by the end of the year. While RBNZ Adrian Orr and BOE Deputy Dave Ramsden remarked the need to increase quantitative easing, BOE Governor Bailey is exploring the utility in negative rates. BOJ Masazumi Wakatabe spoke of vigilance against deflationary pressure with more stimulus.
Momentum continues to push Wall Street higher with S&P and Nasdaq closing at record high. Gains were seen in the broader market and away from recent tech-focused firms like Apple, Tesla and Zoom signalling greater confidence in the overall economy’s recovery. Though lagging, Dow is now only 1.6% below historic highs made back in February. Following suit, European indices snapped a 4-day losing streak on the back of technology firms. Benchmarks gained on average 2.6% across the board. Asia off to a relatively mute start for the lack of data during the session.
Elsewhere, the greenback held onto gains across major currencies despite disappointing ADP non-farm employment numbers. As inflation risk subside, gold dropped 1.3%. Recent deflationary data out of Europe and a rising Euro has the ECB’s chief economist Philip Lane concerned, implying potential measures might be taken. After briefly breaching 1.2000, EURUSD has retreated to the 1.1800 level.
ASX200 rallies on Asia open despite GDP figures cementing Australia first recession in around three decades. Lack of news leaves Japan and Hong Kong relatively mute. Wall Street continues to benefit from Apple’s stock split while Zoom quarterly profits double as more corporate paying clients embrace work-from-home culture. Both S&P500 and Nasdaq again extending grounds into fresh territory by the end of the session. Conversely, European indices ended poorly with four consecutive days of declines. Weak performing blue-chip companies in Britain and lacklustre inflation in the Euro Zone is hampering returns.
Solid manufacturing data out of America halted the dollar’s decline as the currency gained against majors. Oil continues to have trouble holding above key psychological level $43 after briefly touching before retreating, while gold settles below $2,000 after momentarily surpassing just only a month ago.
Apple’s 4-for-1 stock split propels Nasdaq above 12,000 psychological level, while Dow nursed losses weighed down by a delaying TikTok deal. Concerns arose when China implemented new rules impeding the app’s sale to foreign companies like Microsoft and Walmart without Beijing’s approval. European indices retreated by the end of US session on deflationary data coming out of Germany and Spain.
Following summer bank holiday, UK futures gapped down 1.6% on Asia open but has since recovered some ground. Asia-Pacific markets looking at a mixed session, with Australia down as much as 1.5%, Hong Kong up 0.4% and Japan up 0.6%.
Disappointing performance from the American greenback continues after Fed Vice Chair Richard Clarida elaborated on Powell’s remarks from last week. Clarifying the new framework allows leeway in not triggering higher policy rates even amid a low unemployment rate environment.