14.04.21 Market Review

PlusMarkets AnalysisApril 14, 2021

Markets cheer tame inflation, shrug off vaccine setbacks as cryptos soar, Powell awaited

Markets remain upbeat amid relatively tame inflation and despite a pause of J&J’s vaccines. The ECB’s Lagarde, the Fed’s Powell, and other central bankers are eyed. Cryptocurrencies are surging to new highs.
Several US stock indexes have hit new record highs and they are pulling Asian and European markets higher as well. US inflation advanced in March but fell short of what some had feared, with the Core Consumer Price Index hitting 1.6% yearly, allowing for an upswing.
The US dollar is depressed amid this risk-on sentiment and after a 30-year Treasury auction received high demand from investors. The benchmark ten-year yields have tumbled to around 1.60%.
See US Inflation Analysis: Doomsday will wait, but second “sell the fact” on the dollar looks near

EUR/USD is changing hands above 1.1950 despite a setback in Europe’s vaccination campaign. Johnson & Johnson suspended deliveries of its single-shot COVID-19 inoculations to the old continent following concerns about blood clots that arose in the US.
The FDA paused immunizations after six were linked to J&J’s jabs. Without the pharmaceutical’s vaccines, the EU is set to immunize 70% of the population only in December instead of the summer, yet the delay may be temporary. European Central Bank President Christine Lagarde is slated to speak later in the day.
GBP/USD is edging up toward 1.38 and USD/JPY is trading around 109. NZD/USD is around 0.71, benefitting from the greenback’s weakness and dismissing the Reserve Bank of New Zealand’s rate decision, which left rates unchanged.
Jerome Powell, Chair of the Federal Reserve, and three of his colleagues will speak later in the day, in parallel to the publication of the bank’s Beige Book, which includes anecdotal evidence about economic activity across the nation. The Fed’s message has been that higher inflation in the spring is transitory and that it is set to keep policy accommodative until the employment situation substantially improves.

https://www.fxstreet.com/news/forex-today-markets-cheer-tame-inflation-shrug-off-vaccine-setbacks-as-cryptos-soar-powell-awaited-202104140638





USD/CAD to plunge towards 1.2260, big week ahead for the loonie – Credit Suisse

Economists at Credit Suisse remain bullish on the loonie ahead of next week’s fiscal budget announcement on 19 April and of the BoC’s interest rate decision on 21 April and hold a 1.2260 USD/CAD target.
The Bank of Canada is unlikely to push back
“We see COVID-19 and lockdown-related risks to the growth outlook as limited for now, and partially offset by the prospect of additional fiscal spending.”
“Bank of Canada may announce a very gradual plan to reduce asset purchases: we think this would add to the already ongoing reduction in balance sheet growth, with positive implications for CAD.”
“Our view on CAD is constructive, with a 1.2260 USD/CAD target over a three-month horizon, and is based mainly on expectations of beneficial growth spillover from US fiscal stimulus.”

https://www.fxstreet.com/news/usd-cad-to-plunge-towards-12260-big-week-ahead-for-the-loonie-credit-suisse-202104140722

https://www.investing.com/currencies/usd-cad-chart

EUR/USD to stop its advance at 1.20 amid vaccine concerns

EUR/USD has been riding higher after US inflation fell short of investors’ fears. However, overbought conditions and a vaccine scare may cause a pause and prevent the pair from rising above the 1.20 level, FXStreet’s Analyst Yohay Elam reports.
The halting of J&J’s vaccine distribution may delay Europe’s exit from the covid crisis
“Jerome Powell, Chair of the Federal Reserve, will speak later on and may feel vindicated that his insistence that inflation will be transitory is proving correct – at least for now. The world’s most powerful central bank has not only urged patience with inflation but also wants to see a substantial increase in employment before moving. That may take a long time. In the meantime, the dollar could remain under ongoing pressure.”
“The US FDA recommended pausing injecting the firm’s immunizations after six cases of rare blood clots among 6.8 million people that were inoculated. The investigation will likely take several days.”
“The euro was hit as J&J promptly decided to pause sending its vaccines to European countries, in an ‘abundance of caution.’ While the US does not depend on the firm’s single-shot solution to reach its goals, the old continent may suffer a delay of 3-4 months to reach 70% of its population. Losing another summer season could be devastating.”
“The Relative Strength Index is flirting with 70 – on the verge of overbought conditions and signaling a potential drop.”
“Critical resistance is at 1.1990, which is a double-top from March. It is followed by 1.2025 and 1.2110, levels seen earlier in the year.”
“Support awaits at 1.1950, a resistance line from late March, followed by 1.1925, a cap from last week.”

https://www.fxstreet.com/news/eur-usd-to-stop-its-advance-at-120-amid-vaccine-concerns-202104140728

https://www.investing.com/currencies/eur-usd-chart

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. UR Trade Fix Ltd accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Past performance does not constitute a reliable indicator of future results and future forecasts do not constitute a reliable indicator of future performance.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests when providing our services

The Company does not offer crypto-derivatives to UK retail clients

Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read our Risk Disclosure for more details.

Regional Restrictions: For more information on where the Company provides its services, click here

Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.