Market Commentary – March 29, 2021

Kevin Jock

29th March 2021

    Praying for high tides in hopes to assist rescue teams in dislodging the 220,000 tonne Ever Given container ship. If last-ditch efforts fail, Egyptian President el-Sisi has ordered the vessel be unloaded, a time-consuming task, with implications this whole fiasco in the Suez Canal drag on for weeks. A rebound in Friday’s sessions capped the week’s end higher for both brent and crude. Some good news Monday open as headlines suggest the cargo ship has partially refloated.

    Meanwhile, a late session surge saw Wall Street end in positive territory ahead of President Biden’s anticipated unveiling of his $3tn economic recovery package in Pittsburgh, Pennsylvania this week Wednesday. A $20bn fire sale by former Tiger Cub of Tiger Management, Bill Hwang initially spooked markets as his family office, Archegos Capital Management was the centre of one of the greatest margins calls of all time. Forced to liquidate substantial holdings in Chinese tech giants and U.S. media conglomerates.

    European markets tagged along America’s late surge as the German Dax outperforms posting 4 consecutive weeks of gains. Despite the bloc being embroiled in slower than scheduled vaccination schedules and a third COIVID-19 wave, talks of U.S. stimulus alleviated rising risk. Elsewhere, the FTSE100 higher ahead of England easing lockdowns on Monday. Gatherings sizes are set to increase and stay at home orders replaced by health guidelines.

    Cautious start to the week for the S&P200 and Nikkei, both retreating intra-day whilst the Hang Seng bucked the trend up 0.6% thus far. Currencies across the board gained against the greenback on Friday, gold continues to range around the $1,730 level and bitcoin rebounds back above $55,000.


Figure 1 (Source: IS Prime) USDCNH Daily : China’s yuan hits an interim peak suffering it’s worst sell off since March 2020. The PBOC last Wednesday has come to terms to allow the exchange rate more flexibility after 8-months of relentless advance.

  • The monthly increase in US wholesale inventories in February this year decreased again to 0.5%, which was lower than market expectations and rose by 0.8%; it rose by 1.8% year-on-year.
  • The US merchandise trade deficit in February this year was further increased from US$84.58 billion to US$86.72 billion, which was a record high and also exceeded market expectations for a deficit of US$86 billion.
  • Personal Consumption Expenditure (PCE), which accounts for more than two-thirds of US economic activity, fell by 1% on a month-to-month basis in February this year, which is ten months low. It was the most hurt, and it was worse than market expectations and fell by 0.7%.
  • In February of this year, the US Personal Consumption Expenditure (PCE) price index further decreased slightly to 0.2% month-on-month; the year-on-year increased from 1.4% to 1.6%, which was in line with market expectations.

Headliner to Watch

  • Daylight Saving Change across EU and UK. Clocks are moved forward by 1 hour.
  • Japan’s unemployment rate anticipated to edge higher from 2.9% to 3.0% meanwhile retail sales to contract for 3 consecutive months as state of emergency hits businesses.
  • FOMC Member Waller will participate in a virtual online discussion panel about the Fed’s independence hosted by the Peterson Institute.

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Antony Tan
Ben Li
Kevin Jock