加元兑日元企稳多周期200日均线上方。

The Canadian Dollar against the Yen has performed well in the past week and surpassed the 88 level, with a weekly gain of 1.93%. As of the monthly close on March 31, the price of the currency pair rose 5.60% to 88.08.

Last week, the oil market rose instead of falling after OPEC+  announced after its meeting that it will increase production in stages in the next three months, starting in May an additional 350,000 barrels per day will be added to production, with another 350,000 coming on the market in June. Come July output will be increased by 450,000 barrels per day (Saudi Arabia has voluntarily added an additional 1 million barrels per day to those cuts). The reasons include the loose monetary policy of global central banks, government stimulus measures, and accelerated vaccination programs, which continue to boost market expectations for an early economic recovery. Therefore, market participants believe that oil demand is still expected to record a strong rebound in the second half of this year. The Canadian currency may be boosted as the oil market supply shortage may expand.

In addition, last month the Bank of Canada announced its decision to phase out quantitative easing. According to Vice President Toni Gravelle, Canada will gradually suspend remaining liquidity support projects. Therefore, the Bank of Canada’s balance sheet is expected to fall by 100 billion Canadian dollars to 475 billion Canadian dollars at the end of April. Not only that, Gravelle also said that the central bank will “start raising interest rates after the economy and inflation reach the targets set by the guidelines.” Taking into account the recent good performance of Canadian economic data (helping to shorten the time for the Bank of Canada to start raising interest rates), this is tantamount to a favourable catalyst for the Canadian Dollar bulls.

Figure 1: Comparison of Canadian and US multi-year bond yields. Source: http://www.worldgovernmentbonds.com/country-comparison/canada-vs-united-states/

Figure 1: Comparison of Canadian and US multi-year bond yields. Source: ernmentbonds.com/country-comparison/canada-vs-united-states/

From the perspective of bond yields, Canadian interest rates and US interest rates have basically maintained the same direction. Among them, the Canadian 10-year Treasury bond yield reached 1.517%, second only to the United States at 1.720%, and opened a large gap with the interest rates of other countries in the same period. This gap may help the Canadian Dollar perform better than most currencies.

In any case, there are still risks to the outlook for economic growth. The rebound of new virus infections and the high transmission of variant viruses will cast a shadow on the expectation of economic normalization. In addition, Biden’s spending package may also face challenges, which is not conducive to commodity currencies including the Canadian Dollar.

Technical analysis:

The monthly chart shows that the Canadian Dollar has recorded a 5-month consecutive rise against the Yen and has recently surpassed the previous resistance – 200-day MA (yellow) and 86.30 (the same as the high of 38.2% Fib. level that extended from December 2014 to the low of March last year). From the perspective of technical indicators, MACD turned upward, and its fast line touched the 0 axis; Stochastics was in the overbought area. It is worth noting that the currency pair is trading above the 200-day SMA in the short-term (M30, H1, H4) and even the medium- and long-term (D1, W1, MN), indicating a relatively strong upward trend.

The daily chart shows that the currency pair is testing the 127.2% Fibonacci extension level (87.90) seen on the weekly chart. Should the breakthrough succeed, it could breach the key resistance from September 2018 that saw highs of 87.85 and 90.15 (the same as the weekly 50.0% Fib. level) to 90.70 (the same as the daily FE161.8%). However, should the exchange rate have a correction, the key near-term support is seen in the lower channel trend line and the 85.70 to 86.30 area.

Click here to access our Economic Calendar

Larince Zhang

Market Analyst – HF Educational Office

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Market Update – April 5 – Thin volumes but US Markets open later

Market News Today – Quiet today but US is back later – Australia, New Zealand, Singapore, China & Hong Kong closed in Asia, most of Europe, Canada & Latin America all closed. FX markets range bound but USD holds gains after blockbuster NFP data (916k headline, 156k additional jobs in last 2 months), expectations for upward revisions for other March data and Q1 GDP now 4.6% from 4.3%. Nikkei225 closed up 0.8%.

Week Ahead – RBA (6th) EU PMIs & FOMC Minutes (7th), ECB Minutes, Weekly Claims & Powell speech (8th) CAD Jobs & US PPI (9th).

FOMC minutes and Fedspeak will be highlights in the coming week now that the jobs data is safely and bullishly out of the way. Despite the good news from the payroll report and other recent data, expectations remain that the Fed is unlikely to change its tune on the lower-for-longer policy stance and its commitment to accommodation. The FOMC minutes will be old news though the minutes will be scrutinized for more info on the dots that showed four members plugging in rate hikes for next year. Fed Chair Powell’s comments from an IMF panel discussion on the global economy (Thursday) will take centre stage. He’s been the most adamant in supporting the dovish stance. Also speaking this  week will be voters Bostic, Evans, and Barkin, along with Kaplan and Bullard.

Today – ISM Services PMI (USD, GMT 14:00) – The ISM-NMI index should rise to 57.5 from 55.3 in February.

Biggest (FX) Mover @ (07:30 GMT) GBPNZD (+0.24%) rallied from 200MA on open, over 50 MA and R1 (1.9688) now. Upper BB 1.9720. Faster MAs remain aligned higher, RSI 69 and rising to test OB zone, MACD histogram & signal line aligned higher but under 0 line. Stochs rising. H1 ATR 0.0024, Daily ATR 0.0144.

 

Click here to access the HotForex Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Netanyahu's favours were 'currency', prosecutor says as corruption trial starts

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Dollar holds advantage as economic data point to more gains

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Key Economic Events and Reports for the Week Ahead

Next week’s major data releases are the Fed Minutes from the last policy meeting and the ECB report on the weekly asset purchases under the PEPP program. The market will be primarily interested in the US Central Bank stance on Treasury market developments (rising yields of long-dated bonds), as well as how the ECB is following its promise to substantially ramp up asset purchases in order to counter excessive growth of long-term rates. An increase in asset purchases will have a negative impact on the European currency. At the same time, if from the Fed's report it is believed that the US Central Bank discounts the rise of Treasury market yields, this may fuel further bonds sell-off, which should have a positive impact on the US Dollar.Next week, Fed Chairman Powell and a number of other Fed speakers will also speak, who may support risk assets by reiterating the need not to rush to raise rates.On Tuesday, the Central Bank of Australia will hold a meeting on monetary policy, and the EIA will publish a short-term forecast for situation in the oil market. Traders will focus on the EIA's assessment of the rate of recovery in US oil production - one of the main factors restraining rise in oil prices.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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How the Covid-19 vaccine crisis is putting the EU in danger

Export controls may be imposed. Supplies are being held up at factories. Police in Italy are carrying out raids, looking for any evidence of stock being withheld or sent abroad. The grim farce of the European Union’s coronavirus vaccine crisis has taken twist after twist. 

Supplies will soon pick up: so much has been ordered that the developed world at least will be awash with vaccines. The continent will finally be able to get on with inoculating its citizens by summer. But this will not end the long-term consequences of this crisis. They will run and run. 

A catastrophe from the start

The EU’s vaccination campaign has been a catastrophe. The European Commission hijacked procurement, bought the wrong vaccines, in the wrong quantities, put itself at the back of the queue, and failed to invest in ramping up production. It dithered and delayed over the approvals process. Its leaders cast doubts on the effectiveness of the one jab that was available in large quantities. Regulators suspended it on the flimsiest of evidence, holding up the roll-out for several days for no reason. 

The statistics make it clear how badly this has gone. While the UK has given over half the adult population at least one shot, with the United States not far behind, major European countries such as France, Italy, Spain and Germany are still on less than 10%. So while infections, and more importantly deaths and hospitalisations, are collapsing in the UK and the US, Europe is going back into another lockdown. 

That means economies will be shut for far longer than they otherwise would have been. Israel has opened up, the US is following behind, and Britain will start getting back to normal this month. Shops, restaurants and gyms will all welcome customers again. By contrast, Germany, France and Italy are all imposing fresh restrictions, meaning the recession will drag on for at least another three months, and governments will have to run up more debt to pay for it. Lost output will eventually be recovered as the virus comes under control, but the debt will stick around. 

The EU has also done huge damage to its reputation. As it panics over the supply of vaccines, the Commission has trashed property rights and suspended the rule of law. It has seized supplies and blocked companies from exporting with, so far as anyone can tell, no right of appeal, or any form of due process. There is simply bureaucratic fiat deciding who you can sell to and who you can’t. 

Vaccine manufacturing, a major industry for the EU, is going to suffer. Every sensible government is going to make sure it has its own plants, given that it now knows in a pandemic the EU will seize factories. But the effects will go further than that. Every manufacturer will be wondering what might happen to their production lines in an emergency and may conclude the EU is not a safe place to invest anymore.

Expect political chaos

Finally, it will unleash political chaos. Ursula von der Leyen, the president of the European Commission, is now surely a lame duck. There is no mechanism for getting rid of her, but she won’t be able to drive through any new programmes. That matters. The EU still needs to get its vaccination programme back on track. It needs to implement that Coronavirus Rescue Fund to stimulate devastated economies in southern Europe. Beyond that, there is still the task of restoring the zone’s competitiveness. But it is unlikely anyone will be listening to her now.

Meanwhile German elections in the autumn may sweep the Greens to power at the head of a ramshackle coalition. In France, it is hard to see Emmanuel Macron winning reelection next spring if he can’t get the virus under control. In Italy, Mario Draghi may not survive long if he can’t get jabs into people’s arms. Europe is about to go through a year of intense political uncertainty. It was already the least-attractive region in the world for investors. The vaccine crisis has made perceptions far worse. Recovery could take years.

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Brazil FX in somber mood as pandemic roars on, pressure mounts on government: Reuters poll

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Does nuclear power have a future?

Why the controversy?

Right from the beginning of nuclear power – the first commercial nuclear reactor was built at Windscale in Cumbria in 1956 – it was controversial due to issues of safety, cost and the long-lived and toxic waste it produces. Even so, nuclear energy continued to expand globally until the 1990s, since when it has all but flatlined. Then, ten years ago last month, the disaster at Fukushima dealt its reputation a body blow. Within days Angela Merkel, previously a strong backer of nuclear energy, ordered all of Germany’s reactors to be phased out. In China the world’s biggest programme of new nuclear plants was put on hold. 

How much energy does nuclear provide?

Globally, nuclear power produces around 10% of the world’s electricity, making it the second-biggest source of low-carbon energy after hydroelectric power. But that’s a sharp drop from a peak of 18% in the mid-1990s. According to figures collated by Bloomberg, there are 440 nuclear reactors currently in operation, with a combined electrical capacity of 392 gigawatts (GW). Another 50 are under construction, adding around 15% to current capacity. But that’s not even enough to make up for the 25% of reactors due to be shut down in advanced economies by 2025. Nuclear accounts for a bigger slice in advanced economies – 18% rather than 10%, according to the International Energy Agency (IEA), making it the largest low-carbon source of energy. In the UK, for example, about 20% of current electricity capacity is nuclear. However, half of that is due to be retired by 2025, and all but one of the existing fleet of nuclear reactors is due to be taken offstream in the next ten years. Meanwhile, only one new plant, the 3.2 GW Hinkley Point C in Somerset, is being built, replacing just under 40% of current nuclear capacity.

So it’s in decline?

In most of the world, yes, with advanced economies due to lose two-thirds of their nuclear capacity by 2040. Proponents of nuclear power (including the IEA) argue that it is vital to the overall drive for net-zero carbon emissions by mid-century. Despite the impressive growth of solar and wind power, says the IEA, the overall share of clean-energy sources in total electricity supply in 2018, at 36%, was the same as it was 20 years earlier due to the decline in nuclear since the 1980s. “Halting that slide will be vital to stepping up the pace of the decarbonisation of electricity supply,” it says. Advocates argue that nuclear-power plants aid electricity security by keeping power grids stable and limiting impacts from seasonal fluctuations from renewables, and cutting dependence on imported fuels. In other words, nuclear has a vital role to play as reliable “firm generating capacity” during the decarbonising shift to renewables, and winding nuclear down for misguided safety reasons would be folly.

But isn’t nuclear power dangerous?

The debate about that has long been a battle between those concerned more with climate-change warming (nuclear is carbon-free) and those worried about safety. For pro-nuclear environmentalists, the embrace of nuclear power by China and (to a lesser extent so far) India is cause for celebration. Advocates have long argued that, in terms of the number of people killed or harmed, nuclear power is far safer than other forms of power generation. Since its earliest days, nuclear accidents have killed one person every 14 years, proponents say. Indeed, in 2013, Pushker Kharecha and James Hansen calculated that, between 1971 and 2009, nuclear power saved the lives of 1.84 million worldwide thanks to reductions in air pollution.

But what about Fukushima?

The earthquake and tsunami that flooded Japan’s east coast ten years ago killed about 18,500 people. But the destruction of the three reactors of the Fukushima plant – the worst nuclear disaster since Chernobyl in 1986 – killed only one person as a result of radiation exposure. Moreover, a report on Fukushima released last month by the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) concluded that “no adverse health effects among Fukushima residents have been documented that could be directly attributed to radiation exposure”. Future consequences for health “are unlikely to be discernible” and there was “no credible evidence of excess congenital anomalies, stillbirths, pre-term deliveries or low birthweights related to radiation exposure”.

And Chernobyl?

The worst ever nuclear disaster was the result of human errors so “bizarre” that the scenario would have been “thought overambitious by a genuine saboteur”, says Dominic Lawson in The Sunday Times. The Soviet-era accident, which blew a 1,000-ton concrete reactor shield away in a mighty explosion, was the result of an insane experiment in which one of the reactors was made to run at a dangerously low level, the cooling unit disconnected and the safety mechanism switched off. It was feared deaths would run into the hundreds of thousands. In fact, “apart from the heroic Chernobyl emergency team, fewer than 100 deaths have been attributable to increased radiation – and no known birth deformities”, according to UNSCEAR.

So nuclear is safe?

It’s far safer than most people realise, says The Economist. China’s post-Fukushima pause on nuclear didn’t last long: it soon accelerated again and by 2019 produced four times as much as in 2011, with more expansion planned. There’s a strong case for countries such as Britain to follow China’s lead and import its technology. Moreover, modern smaller reactors with lower unit costs are a promising development that can make nuclear cheaper and more flexible. Nuclear power has its drawbacks, but to hasten its decline “is wilfully to hobble the world in the greatest environmental struggle of all”. The lesson of Fukushima is “not to eschew nuclear power, it is to use it wisely”.

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John and Patrick Collison: the nerds who conquered Silicon Valley

“There isn’t much information out there about Stripe,” wrote Michael Arrington on TechCrunch in 2011, when word of a mysterious new payments start-up was doing the rounds of Silicon Valley. But the general vibe was encouraging. “How is it different than PayPal or Google Checkout?” he asked someone who’d seen the product. “It doesn’t suck,” they replied. 

If details were thin on the ground, the one thing everyone knew about Stripe was the remarkable facility of its youthful founders – a pair of Irish brothers then just 21 and 19 – to extract cash from some of the Valley’s most courted investors. In their first venture round, John and Patrick Collison garnered around $2m from Sequoia Capital, Andreessen Horowitz, SV Angel and, most remarkably, PayPal’s founders Elon Musk and Peter Thiel. Then located in Palo Alto “in a small office hidden by hanging leaves that passersby might confuse for a misplaced country cottage”, there was a romantic simplicity about this genial pair from Limerick, noted Fast Company. But they made no bones about their “not-so-humble mission: to become the next PayPal”.

The smartest bets in the tech industry

A decade later, backing the Collisons has “proved to be one of the tech industry’s smartest bets”, says the Financial Times. In its latest funding round, Stripe was valued at $95bn – making it “the most valuable start-up in the US” (surpassing Musk’s rocket company SpaceX) and, indeed, the most valuable private company Silicon Valley has ever produced. Stripe hasn’t displaced PayPal, but it has grown alongside it as the go-to payment provider for fellow online start-ups. “Stripe keeps behind the scenes,” but processes “billions of dollars of payments every year for the likes of Zoom, Deliveroo, Lyft and Instagram”. Its shares have tripled in the past year, boosted by the lockdown ecommerce boom, and there’s excited talk of an imminent float.  

“I often wonder if it’s desirable to grow up somewhere boring because you’re forced to find your own interests,” John (the younger brother) told the FT in 2014. It was certainly a secluded childhood. The brothers grew up in Dromineer: a small village 30 miles outside Limerick, best known for its half-ruined 13th-century castle. But scientific aptitude and a talent for business run in their blood. Both their parents – an electrical engineer who worked for Dell, and a microbiologist – went on to start companies. The boys were self-confessed “nerds”. Patrick won Ireland’s Young Scientist of the Year award at 16 for creating a new programming language, and John later “broke his brother’s record for top grades in Ireland’s school leaving exams”. In 2008, while still in their teens, they sold their first company (which made software for eBay sellers) for $5m. 

Stripping out the clutter

The brothers headed to the US for university – Patrick to MIT and John to Harvard – but dropped out to work on the idea that would become Stripe. “We were really appalled by how hard it was to charge for things online,” John told Fast Company. The idea was to strip out “all the clutter” of merchant accounts, gateways, subscriptions [etc] and offer a streamlined service at “a simple rate”. Their winning pitch to Thiel (who seems to have taken their criticism of PayPal on the nose) was that, by simplifying payments, Stripe would vastly “increase the GDP of the internet”. 

What seems to impress observers most about the Collisons – now worth about $10bn each and living in the San Francisco Bay area – is how at ease they are with themselves. “They’re extremely intelligent,” says former Bank of England governor Mark Carney, who has joined the board. “Very level, very inquisitive about this huge range of subjects… and very funny as well.” “They are careful, disciplined and judicious,” adds Michael Moritz of Sequoia. While some billionaires incline towards the frivolous, he says, the Collisons are “more likely to go to a remote spot… and read”. 

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The charts that matter: the US dollar flexes its muscles

Welcome back.

In this week’s magazine we take a quick look at the effects of the Suez Canal blockage on world trade. We also look at private equity –Max King picks some of the best investment trusts to buy, while Frederic Guirinec says you should also consider some of the listed fund managers too.

As promised last week, we’ve got a new video for you. Merryn talks to author, analyst and former presidential adviser Pippa Malmgren on a whole range of topics, including NFTs, the digital fad of the moment the global recovery from the Covid-19 pandemic and about Donald Trump’s bid to create a media empire in his own image, which she predicts will look something like “Game of Thrones – but with more nudity”. Watch the video here. It’s also available as a podcast for those who prefer that format –listen here, or wherever you normally get your podcasts.

And this week’s “Too Embarrassed To Ask” video explains what a “margin call” is –something that’s brought the huge family office called Archegos Capital Management to its knees. You can watch the video here.

Here are the links for this week’s editions of Money Morning and other web stories you may have missed.

• Monday: A big fund just blew up, rattling markets. What does that mean for your money?
• Merryn’s Blog: Young investors could bet on NFTs over traditional investments
• Tuesday: Why you should ignore the pessimists and invest now
• Tuesday web article: What does Joe Biden’s $3trn infrastructure plan mean for your money?
• Wednesday: Why is gold having such a miserable time and when will it turn around?
• Wednesday web article: Deliveroo has hit the market – but it’s not getting the warmest welcome
• Thursday: Why was Deliveroo’s IPO such a disaster? And what should investors do now?
• Thursday web article: The return of the 95% mortgage – what’s available and how much they cost
• Friday: Is bitcoin going mainstream, and should you buy in?

Now for the charts of the week.

The charts that matter

Gold fell further, but then started to make up a bit of ground towards the end of the week. Don’t get too excited, says Dominic Frisby, who reckons it might not bottom out until June.

Gold price chart

(Gold: three months)

The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) continued its climb higher, with a little dip towards the end of the week.

US dollar index chart

(DXY: three months)

Dollar strength showed itself against the Chinese yuan (or renminbi) –when the red line is rising, the dollar is strengthening while the yuan is weakening.

USD/CNY currency chart

(Chinese yuan to the US dollar: since 25 Jun 2019)

The yield on the ten-year US government bond took a pause for breath towards the end of last week, but the trend remains higher.

US Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond perked back up significantly.

Japanese government bond yield chart

(Ten-year Japanese government bond yield: three months)

And the yield on the ten-year German Bund bounced back too, although it’s still in negative territory.

German Bunds yield chart

(Ten-year Bund yield: three months)

Copper’s drop accelerated somewhat.

Copper price chart

(Copper: nine months)

And the closely-related Aussie dollar attempted to rebound from its three-month low, but remains in the doldrums.

AUD/USD currency chart

(Aussie dollar vs US dollar exchange rate: three months)

Cryptocurrency bitcoin clawed back most of its recent losses to head on higher.

Bitcoin price chart

(Bitcoin: three months)

US weekly initial jobless claims rose by 61,000 to 719,000, compared to 658,000 last week (revised down from 684,000). The four-week moving average fell to 719,000, down 10,500 from 729,500 (which was revised down from 736,000) the week before. It’s the lowest level since March 2020, when it was just 225,500.

US weekly initial jobless claims chart

(US initial jobless claims, four-week moving average: since Jan 2020)

The oil price seems to be picking up a little, but remains quite volatile, torn between ongoing production caution on the behalf of Opec+, and concerns about European lockdowns delaying the global recovery further.

Brent crude oil price chart

(Brent crude oil: three months)

Amazon seems to have steadied and is trading in a range.

Amazon share price chart

(Amazon: three months)

And Tesla has come back from its recent dip, perhaps encouraged by Joe Biden’s infrastructure spending spree, of which electric vehicles should be at least one beneficiary.

Tesla share price chart

(Tesla: three months)

Have a great weekend.

from Moneyweek RSS Feed https://moneyweek.com/economy/global-economy/603040/the-charts-that-matter-the-us-dollar-flexes-its-muscles
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Events to Look Out for Next Week

Moving into the new week and new week, attention could continue be on the fresh lockdowns in Europe, the vaccine rollouts, and uncertainties over China relations and on Central banks as from data perspective the calendar is slightly light. The spotlights of the week are some key releases to watch out for in the US and Eurozone, as well as FOMC and  ECB’s meeting minutes and RBA’s meeting.

Monday – 05 April 2021

---

• ISM Services PMI (USD, GMT 14:00) – The ISM-NMI index should rise to 57.5 from 55.3 in February, versus a 17-month high of 58.1 in July, an 11-year low of 41.8 in April, a 13-year high of 61.2 in September of 2018, and an all-time low of 37.8 in November of 2008. Producer sentiment has remained firm into 2021 as businesses scramble to rebuild inventories, with an added lift into March from expanding vaccine availability and two rounds of stimulus distributions in January and March.

Tuesday – 06 April 2021

---

• RBA Rate Statement & Interest Rate (AUD, GMT 04:30) – After unexpectedly extending its QE program following its February board meeting. Governor Lowe warned, however, that the expected recovery is likely to “remain bumpy and uneven” and “remains dependent on the health situation and on significant fiscal and monetary support”. The central scenario is for the Australian economy to expand 3 1/2% this year and “return to its end-2019 level by the middle of this year”. In the meantime the Fed, ECB and RBA in pushing back against market bets that accommodation will need to be trimmed soon. 

Wednesday – 07 April 2021

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• Markit PMI Composite (EUR, GMT 07:55-08:00) – Final composite PMI readings for Germany and the Eurozone for March already look outdated considering that PMI readings confirmed that the jump in the ZEW earlier in  March was not just a reflection of buoyant investor confidence, but actually a reflected improvement at the company level in Germany. At the same time, the PMI in particular flagged supply chain shortages and a marked rise in costs and subsequently prices charged. However, considering the latest virus developments that brought fresh lockdowns the composite PMI readings for the Eurozone remain under contraction.
• Ivey PMI (CAD, GMT 14:00) – A survey of purchasing managers, the Index provides an overview of the state of business conditions in the country. Canada’s July Ivey PMI is expected to improve further as the latest data are supportive of the ultra-accommodative central bank story.
• FOMC Minutes (USD, GMT 18:00) – The report should reiterate that the Fed’s aim is to anchor inflation expectations around 2%, and the new posture makes policy much less pre-emptive about future inflation — as Kaplan stated “we are more willing to be aggressive and less preemptive.” On fiscal policy, they probably repeat that infrastructure spending is an investment “worth making.”

Thursday – 08 April 2021

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• ECB Monetary Policy Meeting Accounts (EUR, GMT 11:30) – The ECB Monetary Policy Meeting Accounts provide information with regards to the policymakers’ rationale behind their decisions. The ECB is expected to remain dovish, with the latest comments from officials clearly highlighting the commitment to the extended monthly purchase volume and signal that ECB may back calls for the program to become part of the ECB’s regular toolkit.
• Jobless Claims (USD, GMT 23:30) – The US initial jobless claims rose 61k to 719k in the week ended March 27. That follows the -107k plunge to 658k (was 684k) in the March 20 week which was the lowest since the pandemic shut the economy a year ago. The report was on the disappointing side relative to the huge improvement in the labor market revealed in Friday’s jobs report.
• Fed Chair Powell speech (USD, GMT 16:00)

Friday – 09 April 2021

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• Consumer Price Index (CNY, GMT 01:30) – Chinese inflation is expected to remain unchanged in March at 0.6% m/m from 1.0% last month, but the headline to decline to  -0.4% y/y.
• Producer  Price Index (CNY, GMT 01:30) – Chinese PPI is expected to grow in March at 1.5% m/m falling from 1.7% last month.
• Producer  Price Index (USD, GMT 12:30) – We expect a 0.5% March PPI headline rise with a 0.2% core price gain, following respective gains of 0.5% and 0.2% in February and a huge 1.3% and 1.2% in January. As expected readings would result in a rise for the y/y headline PPI metric to 3.9% from 2.8% in February.

Click here to access the HotForex Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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NFP – Biggest monthly jobs gain since August 2020

US March nonfarm payrolls report was a blowout! Payrolls climbed 916,000 after the 468,000 (was 379,000) jump in February and the 233,000 (was 166,000) increase in January for net 156,000 in upward revisions. It is the biggest jump since August’s 1.583 million. The unemployment rate fell to 6.0% from 6.2%.

The labour force surged 347,000 following the 50,000 rebound in February. Household employment was up a hefty 609,000 after gaining 208,000 previously. Average hourly earnings dipped -0.1% but following an upwardly revised 0.3% (was 0.2%) jump. The workweek advanced to 34.9 hours from 34.6. The labor force participation rate edged up to 61.5% from 61.4%.

Total private payrolls were up 780,000 versus 558,000 (was 465,000) previously (and compares to the 517,000 ADP gain). The service sector added 597,000 versus February’s 602,000 (was 513,000) pop. The goods sector added 183,000 with construction contributing 110,000. Leisure and hospitality payrolls rose 280,000, and there was a 136,000 rise in government jobs.

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Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Has the USD Approached a Turning Point?

There could be a feeling that USD corrective rally has run out of steam. The index bounced off 93.50 level on Thursday as details of Biden spending plan prompted upward corporate earnings revisions, which in turn fueled advance of risk assets, oil made controversial rebound on the OPEC decision and Treasury yields retreated. However, in my view, the main USD uptrend still remains valid:Let’s look at the arguments.The key argument here is the struggling euro. It has the largest weight in the Dollar index. Europe have some serious issues with the vaccination program, and is forced to resort to a rough method of fight - lockdowns. Social restrictions stifle economic activity and cause grievous harm to the economy. It’s hard to imagine that situation will change in the near-term and the idea of that US economy will continue to outperform EU economy in terms of recovery pace will remain dominant in the EURUSD.The second argument is, of course, the growing difference in the level of fiscal stimulus. In the EU, the EU recovery plan is stuck in the German constitutional court, and in the US, the Biden plan is likely to be passed through Congress with minimal changes. Fiscal stimulus will certainly boost corporate performance of companies, in particular, expected revenues, as well as reduce uncertainty, so there is reason to believe that the rotation from European ETFs to American ones will intensify. This will also affect EURUSD.The Fed's position relative to the far end of the yield curve is the third argument for the continued growth of the dollar. The Fed has made it clear that it will not interfere with long-term rates from rising. This week, the 10-year Treasury yields renewed their local maximum high, climbing to the highest level since January 2020:Given the latter, there is no reason for a trend reversal. For the dollar, this is definitely a signal for growth, because, firstly, the attractiveness of Treasuries increases, and secondly, the carry trade becomes more expensive as USD funding becomes more expensive.The ISM US Manufacturing Index rose from 60.8 to 64.7 in March. The new orders component jumped to 68 points, which suggests that US expansion is not only gaining momentum, but will also perform well next month.Next week, we can see the dollar index move to 94.00, and EURUSD to 1.16, especially if today the NFP meets expectations, and the Treasury yields start to rise again next week (most likely scenario).As for the economic calendar, next week will be stingy with events due to the holidays. The Fed meeting minutes and the ECB's PEPP asset purchases will be the main sources of valuable information for the market.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Becalmed FX Markets ahead of NFP

EURUSD, H1

With most of Europe closed for the Easter holiday weekend, forex markets remain becalmed in rather tight ranges ahead of the non-farm payroll data later today at 12:30 GMT. 650,000 new jobs is consensus for the headline with unemployment down to 6.0% from 6.2%, big rises for the hospitality & construction sectors expected, along with a rise in women returning to the work force as the vaccine rollout continues to gain traction.

In FX markets, the USDIndex is currently down at four-day lows around 92.86, today’s pivot point is at 93.02 with s1 and R1 at 92.75 and 93.18 respectively. The EUR holds onto four-day highs at 1.1778, JPY trades round s1 at 110.50, whilst Cable holds over the 1.3800 pivot point at 1.3838, with R1 at 1.3862.  The USDCAD has rallied from S1 at 1.2527 to test today’s pivot point at 1.2562, with the AUD and NZD holding north of 0.7600 and 0.7000 respectively. The USDCHF holds over 0.9400 for a fourth day, but down from yesterday’s high at 9465 to 0.9405.

The largest mover of the major crosses today (at 10:30 GMT) is the CADJPY which is down 0.24% from opening trades which touched R1 at 88.28 to lows under S1 at 87.85. The pair is currently testing back to 88.00. The daily pivot point sits at 88.06, with the H4 20-period moving average at 88.12. The daily pivot point sits at 88.06, with the H1 20-period moving average at 88.12.  In the higher time frame the pair remains well bid in a “consolidating-at-highs” trend ; from a break of the 20-day moving average at the end of January at 81.80, to the current resistance at 88.00.

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Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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