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Dollar jumps after Fed minutes

 

 

TAKEAWAYS

 


•    GBP/USD tumbles after UK advises under-30s to seek alternative vaccine to AstraZeneca 
•    US dollar rebounds in risk-off tone after Fed minutes, gold price dips
•    S&P 500 rose slightly as rotation back into mega cap tech continued in US stock market
•    Block sale afterhours of $9M ASO stock raises fears of another hedge fund blow-up
•    FOMC Minutes maintain Fed’s dovish and ‘patient’ stance
•    Crude oil gains ground after inventories draw but WTI falls short of $60 per barrel
•    Bitcoin falls to $56k, still stumbling under $60k, 
•    Canada state of Ontario to go into 4-week lockdown
•    DAY AHEAD: ECB minutes 

 

BEST CHART
EUR/USD – Daily Candlesticks

 


 
Source: GKFX / MT4 (April 7, 2021)

EUR/USD has formed a ‘shooting star’ bearish reversal candle on the daily candlestick chart. The pattern occurred at previous resistance, the 200-day moving average, the 38.2% Fibonacci retracement of the decline since February 25 and the 1.19 level. 

 


GURU WISDOM

 


“If you personalize losses, you can’t trade.” – Bruce Kovner

 


MARKETS

 


*Daily closing price
↘ EUR/USD    1.1869        (-0.05%)
↘ GBP/USD    1.3739        (-0.61%)
↗ USD/JPY    109.85        (+0.10%)
↗ S&P 500    4079.95    (+0.15%)
↘ Hang Seng    28,833.76    (-1.24%)
↘ Gold        1737.71    (-0.34%)
↗ Oil (Brent)    62.94        (+0.32%)
↘ Bitcoin    56,280        (-2.95%)

 


NEWS

 


FOMC minutes had no big surprises but the timing of release matched a rise in the US dollar, while leaving stock market little changed. There was no sign of dissent among Fed officials with most seemingly onboard with the idea of waiting for higher actual inflation before tightening policy rather than basing any action on inflation forecasts.

 

A couple of Fed officials raised concerns that their ultra-lose policy could lead to “excessive risk-taking and the build-up of financial imbalances.” Interestingly we may hear more on that in the hours ahead after reports of another large ‘block sale’ of stock – this time in ‘Academy Sports & Outdoors’ (ASO) – suggesting another Archegos-style over-leveraged fund blow-up.

 

If another family office or hedge fund is in trouble, the wider ramifications could be greater this time around over fears of contagion that lead to more margin calls and forced selling. Any risk-off tone would likely see the dollar gain as a haven and stocks turn lower.

 

Elsewhere the British pound was among the top G10 forex decliners on news that the UK health agency is recommending under-30s find an alternative to the AstraZeneca covid-19 vaccine, while the European Medical Agency linked it to deadly blood clots. The changed recommendation will likely hamper the UK vaccine rollout and could result in government-forced restrictions staying in place longer and slow the UK economic recovery.

 

 

DAY AHEAD 

 


*Times in GMT
06:00 – Germany Factory Orders s.a. (MoM) (Feb) [1.2 % Exp vs. 1.4 % Prev] 
11:30 - ECB Monetary Policy Meeting Accounts 
12:30 – US Initial Jobless Claims (Apr 2) [680 K Exp vs. 719 K Prev]
16:00 - Fed's Chair Powell speech

Source: TradingWriters.com
 

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