Market Commentary – March 26, 2021

Kevin Jock

26th March 2021

    Suez Canal blockage saga continues for a 3rd day with rescuers warning it could take weeks before container ship Ever Given is cleared. Figures thus far detail $9.6bn worth of daily marine trade alongside 185 shipping vessels in limbo. Despite international supply worries pushing crude oil above $60, the move proved temporary with Europe’s worsening coronavirus situation clouding short-term global demand outlook as prices reverted to $58.

    Lacklustre demand for 7-year treasury bill spooked Wall Street only for benchmarks to recovery later in the session as President Biden boasted America’s vaccination achievements with plans to double the existing target to 200 million administered by April’s end. During the press conference Biden’s pledge to outspend China on innovation and infrastructure stoked already volatile geo-political tensions. Especially as China slapped retaliatory sanctions on the U.K. over Downing Street’s claim over Uyghur abuse. Among blue-chip’s U.S. banks outperformed following the Federal Reserve’s plan to discard pandemic-era limits on dividends.

    Despite being mired in vaccination disputes overshadowing the bloc’s road to recovery, European markets followed Wall Street’s lead higher. Likewise, Asia followed through overnight momentum as benchmarks rallied on open. Though among investors there is concern over the horizon by China’s fresh drive to deleverage. More recently, resulting in a major Chinese property firm being downgrade by Moody’s as investor risk-appetite pare off in a debt-laden sector.

    Though intra-day volatility was prevalent in the U.S. dollar, the index was mostly unchanged among majors. Gold continues to fluctuate between a tight range $1,720 – $1,750 whilst a collapse in bitcoin’s rollover futures saw the asset slump to $52,000.


Figure 1 (Source: IS Prime) AUS200 Daily : Australia’s SP200 remains in a tight range between 6,600 – 6,900 for the past 2 months.

Headliner to Review

  • The final GDP of the United States in 2020 is confirmed to shrink by 3.5% year-on-year, compared with an increase of 2.2% in the previous year. It was the first decline since 2009 and the decline is the worst since World War II in 1946.
  • The number of people claiming unemployment benefits for the first time in the United States for the week ended March 20 decreased from -56,000 to -97,000 to a total of 684,000, the lowest since March 13 last year, which was far less than market expectations of 730,000 people.
  • The Kansas Manufacturing Activity Index in the United States in March this year rose for four consecutive months, from the previous value of 24 to 26, which was in line with market expectations, reflecting the continued acceleration of the growth rate of manufacturing activities in the tenth district of the United States.
  • In the UK, the CBI retail sales gap in March this year unexpectedly maintained the previous value of -45, and the market expected to continue to -37. However, the expected difference in retail sales in April has rebounded for several months, from the previous value of -62 to 17.

Headliner to Watch

  • Euro Summit is scheduled today where head’s of states from EU nations discuss how to strengthen their international role. However, if the EU Economic Summit, was any indication, the summit may simply devolve into a splat among leaders over vaccine disputes.

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Antony Tan
Ben Li
Kevin Jock