Dow hits record high, gold drops

TAKEAWAYS

•    Dollar gains, EUR/USD, GBP/USD rollover as US yields rise
•    10Y US Treasury yields rise back over 1.7%
•    Gold price swings lower by 1% after a week of sideways action
•    Boeing leads Dow Jones to a record close but small caps lead Russell 2000 losses
•    Banks drag on S&P 500 amid contagion fears after Archegos default
•    Oil price drops as cargo ship freed from Suez Canal but turns around for daily gain 
•    Biden will explain funding of his $3 trillion infrastructure bill on Wednesday (taxes?)
•    Canada reportedly mulls stopping AstraZeneca vaccine for under-55s

BEST CHART
GBP/JPY – H4 Candlesticks

Source: GKFX / MT4 (March 29, 2021)

GBP/JPY broke below a steep rising trendline, suggesting a change in trend - and is now back at overhead supply created by the previous high near 152. 

GURU WISDOM

“A lot of people get so enmeshed in the markets that they lose their perspective. Working longer does not necessarily equate with working smarter. In fact, sometimes is the other way around.” – Martin Schwartz

MARKETS

*Daily closing price
↘ EUR/USD    1.1766        (-0.19%)
↘ GBP/USD    1.3762        (-0.21%)
↗ USD/JPY    109.83        (+0.04%)
↗ S&P 500    3971.09    (-0.09%)
↘ Hang Seng    28,322.0    (-0.05%)
↘ Gold        1712.08    (-1.10%)
↗ Oil (Brent)    65.01        (+1.03%)
↘ Bitcoin    56,600        (-4.08%)

NEWS

Traders bought dollars as they looked ahead to non-farm payrolls data later this week on a light day of economic data. GBP/USD reversed early gains to trade back under 1.38, which had been support and now looks to be resistance.

Gold was adversely affected by more dollar strength and higher bond yields whereby the US 10-year Treasury yield rose back over 1.7%. Gold fell over $20 (1.2%) – making an intraday low at $1706 – its lowest since March 12.

The Dow Jones hit a record close on Monday, led higher by Boeing after a jump in new plane orders. Bank stocks tugged on the S&P 500, which fell slightly on the day amid fear of a wider contagion in the financial sector from the Archegos hedge fund margin calls. So far, the spillover from the fund’s default has been limited to its own prime brokers, including Nomura and Credit Suisse, which saw big losses on Monday.

The price of oil finished higher in a volatile day as traders reacted to the release of extra oil supply now that the ‘Even Given’ massive container ship has been freed from the Suez Canal – but also the prospect that OPEC could choose to delay increasing production at its meeting on Thursday.

DAY AHEAD 

*Times in GMT
09:00 – Eurozone Consumer Confidence (Mar) [-10.8 Exp vs. -10.8 Prev]
12:00 – Germany Harmonized Index of Consumer Prices (YoY)(Mar) Prel [2 % Exp vs. 1.6 % Prev]
13:00 - S&P/Case-Shiller Home Price Indices (YoY)(Jan) [11 % Exp vs. 10.1 % Prev]

Source: TradingWriters.com