Market Commentary – April 27, 2021

Kevin Jock

27th April 2021

    Mixed start during Asia with Australia’s S&P200 and Japan’s Nikkei losing ground from open whilst the Hang Seng gains 0.3% with travel bubble opportunities opening up. The BOJ kept monetary policy endeavours unchanged, however have signalled giving up the 2% inflation target amid renew state of emergency measures. The Hong Kong – Singapore quarantine free travel bubble is set to launch on May 26th with one flight each direction per day. Australian and New Zealand will observe with keen eyes as they too initiate discussions with Hong Kong on future travel amenities.

    Strong corporate earnings fuelled Wall Street’s advance ahead of the FOMC meeting on Wednesday. The S&P notched to record highs and the Nasdaq outperformed gaining 0.8% for the day. Despite companies releasing rosier outlooks for 2021, the Fed is expected to reassure investors that conditions do not warrant a withdrawal of monetary easing. Elsewhere, the White House has announced on Monday to distribute 60m doses of AstraZeneca’s vaccine to India to offer support in combatting COVID.

    In Europe, whilst intra-day volatility was mute, benchmarks managed to etch out another day of gains. Italy eased restrictions on Monday with France contemplating the same scheduled for next month. The US and EU are in discussions of an open travel bubble to boost domestic tourism as EC President Ursula von der Leyen signalled vaccinated Americans should be able to travel to the bloc this summer.

    Crude oil fluctuates between $60.50 – $62.50 as investors digest Brazil and India’s surge in coronavirus cases. The U.S. dollar index continues to lose ground against majors, gold rose to $1,780 and bitcoin bounces back to $54,700 with JP Morgan preparing to offer a bitcoin fund to wealthy investors.


Figure 1 (Source: IS Prime) USDCAD Daily : Canadian loonie settles at mutli-year highs as the Fed cements accommodative stance till 2023.

Headliner to Review

  • Business confidence in Germany waned from expectations as the ifo index settles at 96.8 whilst 97.8 was expected. The figure largely a result of the third wave of COVID-19 infection and headlines of distribution issue.
  • US core durable met expectations, expanding at 1.6% whilst normal durable fell short at 0.5%. The disappoint figure for the latter arises from chip shortages within the U.S.
  • The BOJ stood pat on monetary policy as expected with a downgrade in inflation expectations.

Headliner to Watch

  • Consumer confidence in the U.S expected to increase from 109.7 to 113.1
  • Australia set to post consecutive strong inflationary data with quarterly CPI at 0.9% following surged in employment figures, higher fuel cost and rising house prices.

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Antony Tan
Ben Li
Kevin Jock