Date : 16th April 2021.

Market Update – Pricing in a solid global recovery again.

Treasuries posted strong and very surprising gains, overlooking robust data and a solid rally on Wall Street. It was something of a buy-the-fact trade as hefty data was the well advertised risk (Retail sales surged 9.8% in March and climbed 8.4% excluding autos & Initial Jobless Claims tumbled -193k to 576k). The 10-year yield dropped 10 bps to 1.530%, the lowest in a month. The break of key technical levels added to the bid, with some haven demand too amid virus and vaccine worries, along with some geopolitical risks.

The USA500 and the USA30 reached record highs thanks to strong data that supported the recovery narrative, along with hefty earnings, and the drop in yields. The USA100 outperformed with a better than 1% jump and is back over 14,000 for the first time since mid-February. As Refinitiv reported, USA100 traders were all bulled up buying the tech breakout yesterday after the USA100 rallied 10%. BUT we should keep an eye on technicals as RSI has reached overbought levels. Elsewhere, Asia markets were largely steady after China reported a sharp acceleration in first quarter growth, though the reading slightly undershot expectations while retail sales bounced strongly last month. For Europe, GER30 and UK100 futures are currently up 0.3% and 0.1% respectively.

In FX markets, EURUSD is little changed at 1.1968, while GBPUSD dropped back to 1.3761. USDJPY is little changed at 108.79. AUD and NZD fell slightly below yesterday’s peak. USOIL extended gains to 63.84. Gold held steady near a more than one-month high on Friday, en route to its second straight weekly gain, boosted by a drop in US Treasury yields and a weaker Dollar.

Today – Today’s data calendar focuses on final Eurozone inflation readings for March and February trade data also for the Eurozone. US Building permits, housing starts and Michigan Index are also on tap.

Biggest (FX) Mover – (EURGBP @ 07:30 GMT -0.43%) The asset rallied to 0.8710 retesting the 7-week highs for a 3rd time. Intraday the fast MAs aligned higher, RSI is at 66, while MACD is positive but signal line holds at neutral. ATR (H1) at 0.00061 and ATR (Daily) at 0.00488.

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Please note that times displayed based on local time zone and are from time of writing this report.

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Andria Pichidi
Market Analyst

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