Daily Market Outlook, May 10, 2021

Daily Market Outlook, May 10, 2021 Most Asian stocks and equity futures across Europe and the US traded higher in response to expectations that monetary policy will remain loose for some time, following Friday’s disappointing US payrolls report. Commodity prices continue to surge, led by iron ore, in response to strong demand. Meanwhile oil prices have also risen sharply in response to a cyberattack on the largest oil-products pipeline in the US.Over the weekend, Scotland’s first minister Nicola Sturgeon reiterated her desire to push for a second independence referendum. This follows the outcome of the regional elections, which saw the Scottish National Party (SNP) win the most number of seats (64 out of 129) but fall short of a majority by 1.A key focus of last week’s Bank of England (BoE) policy meeting was the upgrade to GDP growth forecast for this year from 5% to 7.25%, reflecting a much smaller contraction in Q1 than previously assumed. Much of this reflected a quicker lifting of Covid restrictions, providing households with more opportunities to spend a higher proportion of savings balances accumulated over the past year.Today, the UK government is expected to announce a further easing in restrictions across England from the 17th May, largely due to the continuous progress made in rolling out the vaccine and the decline in the rate of infections. In line with the previously published roadmap, the latest relaxation will provide welcome support to those areas of the economy most impacted by restrictions. Notably, pubs and restaurants will be allowed to serve indoors, while large parts of the arts and entertainment sector will also be allowed to resume operating including cinemas, outdoor sports venues and children’s play areas.The rest of the day remains exceptionally quiet in terms of data with just the Eurozone Sentix investor survey for May due. A further increase is expected to 15.0 from 13.1 reflecting an improvement in sentiment due to the continued rollout of the vaccine and an easing in restrictions. There are no data releases in the US; however, Chicago Fed President Evans will discuss the economic outlook during an online event.CFTC DataNet CAD Longs Rise to Highest Since Pre-Pandemic Data cover up to Tuesday May 4 and were released on Friday May 7.The USD net short increased once again, for the third consecutive week according to CFTC data for the week through Tuesday. The aggregate USD short rose by USD1.7bn—about USD750mn less than the average increase in the previous two weeks—to a total of USD12.5bn across the major currencies that we cover in this report. The net USD short now stands at its highest mark since mid-March.The shifts in positioning were mixed in terms of direction across the various currencies with the net CAD long seeing the largest week-to-week increase. At USD840mn, the net long increase took the overall position to USD2.1bn— representing its highest mark since early-2020 and the biggest bullish position in this report after the EUR’s net long of USD12.7bn. The net bet in favour of the CAD was on the back of a 17k increase in long contracts—but shorts also added 7.4k contracts—and likely contributed to the CAD’s majors-leading gain of 0.7% over the week.The aggregate EUR long rose by USD502mn after staying unchanged in the previous week while the USD12.7bn position remains far from its peak of USD31.3bn last August. Its European counterparts, the GBP and CHF saw respective net adjustments of USD818mn and +USD102mn—with sterling positioning and price action holding relatively flat since early-March.The JPY saw the second largest sentiment adjustment of the currencies we cover with a USD834mn reduction in its still quite sizable USD4.7bn net short, which has nevertheless fallen from USD6.7bn in mid-April.Positioning was little changed in the other currencies with the AUD position flipping back to net long on a USD223mn net bullish bet while the net NZD long rose by USD111mn. Positioning in the MXN turned marginally bearish with a USD134mn net bet against it for a net MXN short of USD110mn.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby)EUR/USD: 1.2040 (682M), 1.2200 (384M), 1.2265 (415M)USD/CHF: 0.9075 (320M)EUR/GBP: 0.8770-80 (570M)GBP/USD: 1.3800 (678M), 1.3950 (251M), 1.4000 (200M)AUD/USD: 0.7825 (200M), 0.7850 (220M), 0.7875 (241M), 0.7900 (639M), 0.7950 (628M)USD/CAD: 1.2100 (370M), 1.2150 (425M), 1.2250 (205M)USD/JPY: 108.00 (415M), 109.00-05 (594M), 109.35-50 (1BLN)Technical & Trade ViewsEURUSD Bias: Bearish below 1.2120 bullish aboveEURUSD From a technical and trading perspective, the close through 1.2120 is constructive but bulls must defend 1.21 to set up a test of 1.2240/50. Failure to find sufficient support at 1.21 would suggest a false upside break opening a retest of 1.2050.Flow reports suggest topside congestion through to the 1.2160 level from the highs and then while there maybe some weak stops just beyond stronger offers are likely through the level to the 1.2200 area with weak stops again appearing but very limited and the 1.2250 again seeing the stronger offers through to the 1.2300 level with the market then having the ability to test this year’s highs, downside bids light through to the 1.2000 area and then weak stops on a move through the 1.1920 level opening the market to the 1.1850 area where stronger congestion appears.GBPUSD Bias: Bullish above 1.39 bearish belowGBPUSD From a technical and trading perspective, as 1.3960 now acts as support bulls will target a retest of 1.4230’sFlow reports suggest further offers likely to be into the 1.4000 area with stops likely through the 1.4020 area and opening a stronger move higher, downside bids strong into the 1.3800 with congestion likely to continue through the level and while there may be some stops that congestion is likely to continue through to the 1.3750 level, light bids through the level but increasing again into the 1.3700 level with congestion then continuing through the levelUSDJPY Bias: Bullish above 108 targeting 112USDJPY From a technical and trading perspective, as 107.50 acts as support there is potential for a test of the pivotal 108.50, through here will open another look at 110.Flow reports suggest downside bids into the 107.80 however, a break through the level is likely to see weak stops and breakout stops appearing and the market free to quickly test 107.50 and an old trendline then nothing until closer to the 107.00 area where stronger bids start to appear but the downside opening to Feb levels, topside offers through to the 110.00 level with light congestion through the figure level and weak stops possibly limited and stronger offers likely increasing on a move higher towards the 111.00AUDUSD Bias: Bearish below .7790 bullish aboveAUDUSD From a technical and trading perspective, as .7790 now acts as support bulls will target a retest of prior cycle highs above .80 centsFlow reports suggest topside offers in the 0.7850 area however, while there maybe some offers in the area the market looks to be fairly open through to the 79 cents level and ultimately ranges from the end of Feb, downside bids light through the 0.7700 level with weak stops likely on a move through the 0.7680 before stronger bids around the 0.7650 area and continuing through to the 0.7600 likely increasing in size, any further moves are likely to see strong support into the 0.7550 to calm the situation.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. 73% 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.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-may-10-2021"
via IFTTT

Dollar Weakness; Payrolls Could Delay Fed Tapering

from Forex News https://www.investing.com/news/forex-news/dollar-weakness-payrolls-could-delay-fed-tapering-2500733
via IFTTT

May 10 – GBP skyrocket, USD down, Crypto and Metals in the spotlight

Market News Today – The overall tone in stocks remained positive through the Asian part of the session, after Wall Street shrugged off the disappointment of the US jobs report on Friday and took solace in the fact that the data will back the Fed’s dovish tone. Many Asian indices move higher, bonds struggled. JPN225 gained  0.4% today, the ASX more than 1% after strong business confidence data. Hang Seng and CSI 300 underperformed and corrected -0.5% and -0.8% respectively against the background of anti-trust efforts and lingering US-China tensions. GER30 and UK100 futures are up 0.3% and 0.4% respectively, alongside gains in US futures.

In FX markets, the US Dollar sank to 2-month low to 90.18. The GBP rallied to a 10-week high after local elections provided a boost to PM Johnson and seemed to fend off demands for another independence referendum in Scotland. Cable is trading at 1.4062 and EURGBP at 08640. EURUSD meanwhile dropped slightly to 1.2150. USDJPY lifted to 108.98 as the Yen weakened across the board. CAD and AUD were supported. The USOIL is traded at $65.36 per barrel, after a key US pipeline was forced shut by a cyber attack (Colonial Pipeline,). Copper skyrocket to 4.869.

Ethereum extended this month’s record run, surging more than 5% to an unprecedented $4,148.88. The second-biggest digital token has rallied 41% so far in May. Bitcoin rallied but remains below 60K after Elon Musk called the dogecoin a “hustle” during his guest-host spot on the “Saturday Night Live” comedy sketch TV show.

Treasury supply will be a focal point this week as the $126 bln May refunding is on tap, and includes $58 bln in 3-year notes Tuesday, $41 bln in 10-year notes Wednesday, and $27 bln in 30-year bonds Thursday. Yields plunged on Friday following the jobs miss, but rebounded into the close as the market looked ahead to the upcoming supply. The wi 3-year traded 2 bps richer at 0.315% late Friday, with the wi 10-year fractionally cheaper at 1.590% and the wi 30-year 3.5 bps cheaper at 2.280%. Rates here would be the richest in two months for the 3- and 30-year maturities, and since March for the 10-year. Many of the auctions this year have shown sputtering demand, leading some to worry that demand for Treasuries is diminishing. This week’s auctions will be an interesting test, especially given richer rates alongside uncertainties over inflation, and now the job market.

Today – Virus developments remain encouraging and with central banks still providing support, the recovery remains on track it seems. Today’s data calendar is pretty quiet, but includes UK house price data.

Biggest (FX) Mover @ (07:30 GMT) GBPJPY (+0.92%) rallied from 7-week highs at 153.30 today. Faster MAs remain aligned higher, RSI crossed 70 and still points upwards MACD histogram & signal line aligned higher extending away from 0 line. Stochs rising to test OB zone. H1 ATR 0.218, Daily ATR 0.990.

Click here to access our 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.

from HF Analysis /235526/
via IFTTT

Dollar Up as U.S. Employment Data Disappoints, Focus Turns to Inflation

from Forex News https://www.investing.com/news/forex-news/dollar-up-as-us-employment-data-disappoints-focus-turns-to-inflation-2500689
via IFTTT

Dollar licks wounds after payrolls shock, focus turns to inflation

from Forex News https://www.investing.com/news/economy/dollar-licks-wounds-after-payrolls-shock-focus-turns-to-inflation-2500601
via IFTTT

Key Economic Events and Reports for the Week Ahead

The shocking Non-Farm Payrolls report released on Friday put an end to rumors that the Fed might be wrong about inflation. Job growth in April was less than 300K, no more than a third of what was expected. The dollar dived, yields of long-dated bonds in the United States fell, as the threat of accelerating inflation ebbed. There is a chance for equity markets to continue advance, as low rates and moderate growth prospects are the most favorable environment for a yield search.As it becomes finally clear that no rate hike is expected or priced in before 2023, the markets will likely turn their focus to actions of the Fed peers, such as the ECB or the Bank of England. Considering their less dovish stance on rates, we may start to see development of rumors of early rate hikes in response to economic upturn. To expect that markets would likely need to see signals of economic growth, i.e., strong economic reports. The German ZEW Economic Sentiment Index on Tuesday, and the UK GDP on Wednesday will likely command a spotlight next week. On Tuesday and Thursday, the BoE head Bailey will speak, who may give more details on the Central Bank's plans to raise interest rate or taper QE.The US April CPI and PPI will be released on Wednesday and Thursday. Of course, the employment report plays a key role in predicting Fed's actions, but downbeat inflation print may intensify worries about US recovery momentum given really weak NFP and could potentially drive US long-dated yields lower, adding pressure to USD.On Friday, the main reports of the day will be the ECB meeting minutes and retail sales in the US. Given the weak NFP data, there is a growing risk of further weakening of USD next week especially if the data from other major economies will indicate accelerating economic momentum that may shift expectations of rate hikes to closer to the present time, which will lead to faster growth in real interest rates relative to real rates in the US.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. 73% 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.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/key-economic-events-and-reports-for-the-week-ahead-09052021"
via IFTTT

The return to the old nine-to-five is a matter for business, not government

Different companies are taking different views of how quickly, and how far, they should get back to the old nine-to-five office routine that was the norm before any of us had heard of Covid-19. BP, for example, has said that 25,000 of its staff will be expected to work from home two days a week. HSBC has started shifting staff onto home-working contracts, as has Lloyds. 

A few have gone further. Revolut, the finance app, will not only allow staff to work from their kitchen table, but from a beach bar overlooking the Caribbean for at least a couple of months a year. By contrast, Amazon says it plans to return to an “office-centric” culture as soon as possible. Google has been accelerating plans to reopen its offices and has said it expects staff to “live within commuting distance” of their workplace. The boss of Goldman Sachs has described working from home as an “aberration” and one that should be brought to an end as soon as possible. 

The government is there to help…

It is perfectly legitimate for companies to take different approaches. What they could do without is official “guidance” on the question from the government. But it looks like that’s what they’re going to get. Its “Flexible Working Task Force” is set to recommend that staff should be allowed to work from home at least part of the week. That might soon become a legal right. The unions are campaigning for it to become part of employment law. This is a mistake. 

Firstly, we are still waiting for the evidence. We have just been through a year-long, forced experiment in working from home. In the short term, it has gone surprisingly well. Most white-collar workers have managed to get their jobs done and there is even some evidence that productivity and job satisfaction may have increased. If that can be maintained while companies cut back on the expense of an office, then it may well be an improvement. And yet, working from home during a pandemic is a different prospect to being permanently perched on the end of your kitchen table. Staff may feel differently when half or more of the workforce is heading back to the office. We will see. In reality, it is far too early to draw any real conclusions on whether it works or not.

Secondly, we still don’t know what the impact will be on city centres and on the suburbs as well. Official reports fret about what will happen to all those office blocks and the jobs in the sandwich bars that surround them. But it may well turn out that office rents fall dramatically and businesses decide it is more attractive to rent space again. Alternatively, it might be so easy to turn that space into housing that prices go up and up, making offices ever less attractive. We will find out over the next year or so. The important point is that most companies will let that settle down before making any long-term decisions. It would certainly be a mistake to rush to a judgement. 

… but it’s help we could live without

Finally, official guidance won’t reflect the reality experienced by the bulk of the economy. A commission appointed to examine the issue will largely be driven by the views of the public sector, big corporations and the trade unions, and the think tanks they fund. But it will ignore small businesses and entrepreneurs, few of whom have the right contacts, or the time, to lobby ministers and officials. But they are the people who will matter most. It is the millions of people working for small and micro enterprises who will determine whether working from home is part of a new mainstream, or reverts to something restricted to a few freelancers. And it is those businesses that will struggle to meet the cost if the right to work from home is made mandatory in law. 

The market is perfectly capable of figuring out who can work from home, who can hot-desk, and who needs to spend 50 hours a week at their desk on the 30th floor. One thing is certain: the answer that businesses and their employees come up with by themselves will be far better than anything mandated by the government. 

from Moneyweek RSS Feed https://moneyweek.com/economy/uk-economy/603194/the-return-to-the-old-nine-to-five-is-a-matter-for-business-not
via IFTTT

Brazil real hits four-month high as global banks turn hawkish on interest rates

from Forex News https://www.investing.com/news/economy/brazil-real-hits-fourmonth-high-as-global-banks-turn-hawkish-on-interest-rates-2498614
via IFTTT

Fed: Still no Major Risk for Stability from Elevated Equity Markets Valuations

Rising asset prices pose an increasing threat to financial system, the Federal Reserve warned in its semi-annual financial stability report on Thursday.Governing Board Member Lael Brainard said the situation requires monitoring and stressed the importance of keeping the system safe. Investors have bought up stocks, corporate bonds and cryptocurrencies, and have poured billions into so-called SPACs and traditional IPOs.Fed Chairman Jerome Powell and other Fed members were repeatedly asked if they were worried about rising prices, to which Powell said that as long as interest rates remain low, current asset valuations are justified. However, the Fed notes that there is a danger if the market sentiment changes.The combination of high valuations with very high levels of corporate debt warrants attention because this may intensify sell-off during decline.The report also notes particular vulnerability of pandemic-sensitive sectors such as energy, travel and hospitality. The Fed also sees potential threats from the money market and open-ended funds.Overall, the Fed rated the current state of the financial system as good, noting that household balance sheets are in good shape and corporations are supported by an improving economy and low interest rates.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. 73% 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.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/fed-still-no-major-risk-for-stability-from-elevated-equity-markets-valuations"
via IFTTT

Is Britain’s “green revolution” realistically achievable?

What has the government announced?

Last month, in the run-up to Joe Biden’s Earth Day climate summit, Boris Johnson announced a new legally binding pledge committing the UK to cut emissions of greenhouse gases by 78% by 2035, compared with 1990 levels. The UK already has a legally mandated target of reaching net-zero emissions of greenhouse gases (principally carbon dioxide) by 2050. This was introduced by Theresa May’s government just before she left office in 2019. The country also already has a commitment to cut emissions by 68% by 2030, compared with 1990 levels (we’ve already done 49%). The new pledge gives the UK five more years to hit a higher target, so it might appear to be a natural milestone on progress to net zero. But in reality it’s a significant acceleration and major change.

How so?

Because it means that the government is “front-loading” the bigger slice (58%) of its remaining emissions cuts in the years before 2035, rather than putting off the toughest work until the 2035-2050 period. Some climate scientists argue that the whole idea of a “net zero” target by 2050 is a mirage that rests on unproven (and not-yet-invented) carbon removal and battery storage technologies – and that the concept is counterproductive if it encourages the world to carry on emitting in the belief that technology will save us eventually. The UK’s tough target, necessitating even earlier action, means that this argument loses some of its force, assuming that the target-setting is actually backed up by actions. And crucially, for the first time the UK’s pledge includes emissions from international aviation and shipping – areas which have previously not been included, in part because their cross-border nature makes it hard to allot them to nation states.

How does that compare internationally?

According to Johnson, who is keen to grab the opportunity for global leadership presented by the UK’s hosting of the COP26 climate summit later this year, it is “the most ambitious target to cut emissions in the world”. Currently, the EU is committed to a 55% cut by 2030. In the US, Joe Biden has just doubled the Obama-era target, committing the US to a 52% cut by 2030 (up from 25%). And many other countries are making similar pledges. Japan’s target is 46%, Canada’s is 40%. China is committed to net zero by 2060, and peak emissions by 2030, and President Xi Jinping recently committed the country (by far the world’s largest emitter) to slashing its use of coal in the second half of this decade. Even Brazil’s president, Jair Bolsonaro, who once vowed to follow Donald Trump in pulling his country out of the Paris climate accord, has now brought forward its net-zero goal by ten years to 2050. If all these pledges were met, there’s a chance of achieving the global 45% fall in emissions by 2030 that scientists say is needed to avoid the 1.5˚C of warming that the Paris accord is aimed at preventing.  

Is the UK target achievable?

Britain risks getting too far ahead of the global consensus in terms of what’s achievable by when. In recent decades, says John Rentoul in The Independent, the UK has already made great progress thanks to its “dash for gas” and the expansion of offshore wind power. But that very success has led to “wishful thinking about economies of scale” and underestimates of costs. In particular, decarbonising home heating – along with heavy industry, transport and food production – is going to be more difficult and more expensive than shifting the UK energy production system away from coal and into renewables. And the remarkable political consensus on the subject will surely fracture as the bills come in. “Everyone agrees with green policies until they start to cost more than 5p for an occasional plastic bag.”

How much will it cost?

Estimates in the UK range from the Treasury’s 2019 estimate of about £1trn (over several decades) to claims by sceptical campaigners of a figure around three times that. The Climate Change Committee (CCC), the independent body that advises the government, now forecasts the overall cost will be around 0.5% of GDP by 2050 – a fall from its original estimate of 1%-2%. Consumers may face higher costs for electric cars, taxes to fund the necessary infrastructure, and potentially higher prices in carbon-intensive sectors such as cement and steel. But the big “missing bit”, says the CCC’s ex-chair Adair Turner, is buildings and domestic heating. “Once you electrify residential heat, people will pay less in some cases. But there are non-trivial capital costs” for millions of households.

“Non-trivial” sounds ominous?

Nearly a third of the UK’s greenhouse gas emissions is produced by central heating, and gas boilers heat about 85% of UK homes. Under the government’s plans, new homes can’t be fitted with gas boilers from 2025, and existing boilers must not be replaced from the mid-2030s. Costs to households in terms of spending on new heating pumps, plus insulation and other energy improvements, could easily run to tens of thousands of pounds, says Ross Clark in The Spectator. That’s especially true if the new target means the government adopts the CCC’s proposal to ban the sale of homes by 2028 unless they achieve a “C” rating in an Energy Performance Certificate. At present, just ten million of Britain’s 29 million homes qualify. 

What are the politics of this?

Some commentators, such as the Financial Times’ Martin Sandbu, believe this is all easily do-able with existing technology and that success will feel like “day-to-day living going on much as it did before”. But revolutions famously devour their own children, says Allister Heath in The Daily Telegraph. It’s not inconceivable that, in a few years’ time, a Brexit-style popular backlash against Johnson’s environmental revolution will see him swept from power. “Consumers won’t tolerate a green poll tax of £20,000 per home.” 

from Moneyweek RSS Feed https://moneyweek.com/economy/uk-economy/603212/is-britains-green-revolution-realistic
via IFTTT

The charts that matter: Amazon hits a bump in the road

Welcome back.

This week’s magazine focuses on Big Tech. The speed at which it has taken over our lives is astonishing, and the amount of data we willingly hand over to the world’s biggest companies defies belief. Sure, we’re getting some fantastically convenient technology in return, but, if you stop to think about it for a little while, the power we’ve relinquished over our lives is quite frightening. Our every move –almost our every thought –can be taken down and may be used in evidence against us. Dominic Frisby takes a look at just what’s possible and asks if Big Tech is morphing into Big Brother. Of course, all this is very profitable, and Dominic also picks some of the sector’s best stocks for your consideration.

In the podcast this week, Merryn talks to Gabrielle Boyle, manager of the Trojan Global Equity fund. Gabrielle explains her investment philosophy, why sustainability and diversity make good business sense, and makes a plea for more women to enter the fund management business. Listen to what she has to say here.

This week’s “Too Embarrassed To Ask” video takes a look at Ponzi schemes, perhaps the best-known of the many financial scams people seem to get into, and explains what they are and how they work. Watch that here.

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

• Tuesday Money Morning: What is hyperinflation and could it happen here?
• Web article: The UK is sitting on its biggest debt pile since WW2. Should you be worried?
• Wednesday Money Morning: Copper has hit a ten-year high, but this could just be the start of a huge bull market
• Web article: Cryptocurrency ether has hit an all-time high. Why? And will the bull market last?
• Thursday Money Morning: Big Tech on steroids: why the 2020s will be the “decade of the DAO”
• Web article: How will India’s Covid crisis affect the global economy?
• Friday Money Morning: Could you end up paying inheritance tax on your family home?

Now for the charts of the week.

The charts that matter

Gold perked up again, continuing its rally after early March’s low.

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) bounced a little after its recent falls.

US dollar index chart

(DXY: three months)

The Chinese yuan (or renminbi) seemed to be treading water against the US dollar (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 downward drift in the yield on the ten-year US government bond resumed.

US Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond also resumed its decline.

Japanese government bond yield chart

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

The yield on the ten-year German Bund, found the approach to zero a little too rich for its liking, and dropped back.

German Bund yield chart

(Ten-year Bund yield: three months)

There was no stopping Copper’s resumption of its bull market, something that’s likely to continue, as Dominic explained on Tuesday.

Copper price chart

(Copper: nine months)

The closely-related Aussie dollar hasn’t followed the red metal up quite so strongly, however.

AUD/USD currency chart

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

Cryptocurrency bitcoin trod water, in contrast to ether, the second-biggest cryptocurrency, which hit an all time high, as Saloni wrote about this week.

Bitcoin price chart

(Bitcoin: three months)

US weekly initial jobless claims continued their decline – down 92,000 to 498,000, compared to 590,000 last week (revised up from 553,000). It’s the lowest number of claims since March 2020. The four-week moving average fell to 560,000, down 61,000 from 621,000 (which was revised down from 611,750) the week before.

US weekly jobless claims

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

The oil price continued to climb.

Brent crude oil price chart

(Brent crude oil: three months)

Amazon hit its highest price for six months or so, but then sold off sharply, despite posting better than expected results. A blip, or a re-start of the “great rotation” out of growth and back to value?

Amazon share price chart

(Amazon: three months)

Tesla continued to fall, too.

Tesla share price chart

(Tesla: three months)

Have a great weekend.

Ben

from Moneyweek RSS Feed https://moneyweek.com/economy/global-economy/603218/the-charts-that-matter-amazon-hits-a-bump-in-the-road
via IFTTT

Anthony Tan: the Malaysian business scion taking on Uber

Parental relationships can be important when starting new businesses. Rarely more so than in the case of Anthony Tan – originator of the Asian “super-app” Grab, which having proved “an Uber killer” in its home markets is now readying for a $35bn-$40bn Wall Street float in the largest special purpose acquisition company (SPAC) deal yet seen. 

Tan’s mother was one of the first investors in Grab’s Malaysian forerunner MyTeksi – the online taxi-booking service founded by the youthful entrepreneur in 2012, says the BBC. She was also pivotal to the app’s acceptance among institutional investors. “We saw how he spent time with his mum, how he talked to her, and how much respect he gave her,” says Kee Lock Chua of Vertex Ventures. “That told us he had strong character and conviction. Besides the solid idea, that helped us make the decision to invest in the business.” Chua’s firm paid $11m for a 22% stake in Grab: by the time he exited seven years later, it was worth “more than ten times that amount” – a measure of the company’s mushrooming growth as it expanded beyond taxis into food delivery, insurance, payments and lending across eight countries to become Southeast Asia’s most valuable start-up.  

“The eye-popping numbers give a sense that Tan is blazing a trail for the entire region,” says the Financial Times. That is “very much in character”. Born into one of Malaysia’s wealthiest families, Harvard-educated Tan, now 39, has always been “unabashedly ambitious”, proclaiming just two years after founding the company that “if we get this right, we can literally go into the history books”. According to a lawyer whose firm works for Grab, “Anthony always wants to be number one”. He’s also spiritually driven, citing Jesus Christ as a business hero and describing his job as a “mission” to serve Southeast Asians’ needs. 

It could all have been very different, notes a Harvard Business School profile. As a scion of the family behind Tan Chong Motor, one of Malaysia’s biggest car distributors, Tan was expected to join the family business. But he was bitten by the entrepreneurial bug while at Harvard. Challenged by a classmate, he came up with a plan to revamp the Malaysian taxi market. 

Only connect

It’s perhaps Tan’s unique mix of connections – he was “heavily influenced” by meetings with tech founders such as YouTube’s Steve Chen, and “lean start-up” gurus – that has done most to fuel Grab’s growth, says the FT. Supporters say it took someone like him “to navigate Southeast Asia’s interlinked world of politics and business”. But he’s never lost touch with street life. Now married and living in Singapore, he can often be seen eating cai fan (a cheap rice dish) in shopping malls. That familiarity with business on the ground helped in the epic battle to oust Uber. While the latter was seen as a competitive threat by local cab drivers, Grab was perceived as an ally. Thus when Tan decided to leverage Grab’s customer-base and offer financial services, it was viewed more as a helpful evolution than a power grab, says the BBC.  

That said, the risks to Grab are mounting. There’s a danger that local governments will emulate China’s crackdown on e-commerce giants getting into digital banking. More imminently, he faces the challenge of debuting on Wall Street “just as institutional enthusiasm for SPACs is waning and short-sellers are circling”, says the Financial Times. “Anthony is a street fighter,” says a former employee. He may need to be.

from Moneyweek RSS Feed https://moneyweek.com/economy/people/603207/anthony-tan-the-malaysian-business-scion-taking-on-uber
via IFTTT

Scotland's crucial election on knife edge as pro-independence party heads for win

from Forex News https://www.investing.com/news/forex-news/scotlands-crucial-election-on-knife-edge-as-proindependence-party-heads-for-win-2500105
via IFTTT

Troy's Gabrielle Boyle: for global companies, sustainability is just good business

Merryn talks to to Gabrielle Boyle of Troy Asset Management about the top quality global companies in her portfolio, and why those firms that invest in sustainability, diversity and a better future will have a competitive advantage over those that don't.

from Moneyweek RSS Feed https://moneyweek.com/investments/investment-strategy/603215/troys-gabrielle-boyle-global-companies-sustainability-is-good-business
via IFTTT