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Gold under 1700, Nasdaq -ve for 2021

 

 

TAKEAWAYS


•    Bond yields rise again – US 10year back over 1.5%
•    The dollar jumps – with massive move over 108 in USD/JPY
•    Gold price sinks under $1700 per oz for first time since June
•    The Nasdaq drops again on Thursday taking it into negative territory for 2021
•    Oil price rises 4% after OPEC meeting
•    OPEC decides to keep output steady, despite improving demand outlook
•    Bitcoin drops back below $50,000 amid risk off market mood
•    Senate votes to start a debate on Biden stimulus bill
•    DAY AHEAD: US non-farm payrolls


BEST CHART
USD/JPY – Daily Candlesticks

 


 
Source: GKFX / MT4 (March 5, 2021)

 

USD/JPY has seen an acceleration of its uptrend, moving out of the top of its rising channel and has now surpassed its July 2020 peak near 108. A short-term pullback is due but the steepness of the move increases the chance of a move higher to test 110.


GURU WISDOM


"I don't look to jump over seven-foot bars; I look around for one-foot bars that I can step over." — Warren Buffett

 


MARKETS


*Daily closing price
↘ EUR/USD    1.1973        (-0.74%)
↘ GBP/USD    1.3899        (-0.39%)
↗ USD/JPY    107.97        (+0.92%)
↘ S&P 500    3768.47    (-1.34%)
↘ Gold        1,697.43    (-0.79%)
↗ Oil (Brent)    66.97        (+4.53%)
↘ Bitcoin    48,222        (-4.37%)

 

NEWS


There was a lot of speculation about what Fed Chair Powell would say on Thursday and a lot of it proved unfounded. There was no comment on bond market volatility with Powell admitting he would be concerned by disorderly conditions in markets but not acknowledging such a scenario exits currently. That in effect gave the green light for ‘bond vigilantes’ to keep selling bonds and pushing yields higher because the Fed would not step in their way by easing policy or adding a new tool like the ‘operation twist’.

The dollar gained on Powell’s comments while gold turned lower and equites legged lower. It was tech stocks that again took the brunt of the selling, with the Nasdaq index turning negative for the year and the Nasdaq 100 index completing a head and shoulders reversal pattern.

Oil was the big gainer of the day after OPEC decision to leave output unchanged given the uncertainty of the economic situation. Oil prices have risen substantially on expectation of improved demand this year but OPEC are taking a cautious approach, delaying a decision to rise output to meet the expected demand.

The big event for day is the US jobs report. A strong number could add to already big gains in the dollar while a miss could be a trigger for profit-taking in the dollar.

 

DAY AHEAD 


*Times in GMT
13:30 – US Nonfarm Payrolls(Feb) [182 K Exp vs. 49 K Prev]
13:30 – US Average Hourly Earnings (MoM)(Feb) [0.2 % Exp vs. 0.2 % Prev]