Market Commentary – April 13,2021

Kevin Jock

13th April 2021

    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.

Crude Oil-Apr-13-2021-07-32-05-34-AM

Figure 1 (Source: IS Prime) Crude oil Daily : Crude’s consolidation tightens as speculators await further color with the global economy standing at an inflection point.

Headliner to Review

  • Bank of Canada’s business outlook survey indicator rose higher from 1.3 to 2.87. Overall business continues to improve with surveyed owners being less uncertain about their outlook in relation to COVID-19. However, the recovery thus far remains uneven with the service still impacted from social distancing measures.
  • China’s trade balance falls far beyond expectations. Expected to be at 330B, actual released figures at 88B. Exports roses 30.6% compared to 154.9% last month, whilst imported jumped 38.1% with meat being the largest category imported.

Headliner to Watch

  • U.S. inflation data set to be released today expected to edge higher from 0.4% to 0.5%. With further stimulus on the way, some economist expect annual price pressures to reach 3% in the long term.
  • No surprises expected from the RNBZ with the cash rate set to stay at 0.25%. After government measures, housing demand has rounded the peak recently with the central bank in wait-and-see mode.

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Antony Tan
Ben Li
Kevin Jock