Details Cookies
Important margin product information

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Market Quick Take - January 15, 2021 Market Quick Take - January 15, 2021 Market Quick Take - January 15, 2021

Market Quick Take - January 15, 2021

Macro 4 minutes to read
Saxo Be Invested
Saxo Strategy Team

Summary:  Stock markets retreated in Asia on Friday along with yields, while the dollar climbed on worries that President-elect Joe Biden's could face stiff resistance in Congress over his $1.9 trillion Covid-19 relief plan. Breakeven yields and gold both climbed after Fed chair Powell said policy makers won't raise interest rates unless they see troubling signs of inflation. All this while the pandemic rages on with the global death toll reaching 2 million.

What is our trading focus?

  • Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - despite Biden’s $1.9trn stimulus plan and Powell’s dovish comments, US equities rolled over yesterday with S&P 500 futures trading this morning around the 3,773 level with the 3,768 being the key support level to the downside. The narrative building is that the stimulus is fine in size, but the plan is not likely to get passed in its current form and thus a slimmer plan is more likely.

  • Bitcoin (BITCOIN_XBTE:xome) and Ethereum (ETHEREUM_XBTE:xome) - Bitcoin rallied hard yesterday taking the crypto asset above 40,000 again although only for a brief period before descending to close at around 38,800, a 14% comeback from Monday’s close price. Volatility remains extremely elevated, and we urge all investors to exercise caution in their risk taking in crypto assets. Bitcoin is down in today’s session and yesterday’s open at 37,283 is likely an important support level today.

  • USDJPY – remains very sensitive to moves in US yields as the pair dropped back below 104.00 after Fed chair Powell said policy makers won’t raise interest rates unless they see troubling signs of inflation. They key upside level, though, for any more notable move in USDJPY, which has traded in a choppy, but very persistent downward sloping channel for months, is the 104.50 area. Support at 103.50 followed by 103.30.

  • Yield curve resumes steepening as Powell excludes early tapering and downplays inflation (10YUSTNOTEMAR21, TLT, IEF). At yesterday’s Princeton Economics Webinar, Powell has killed any discussion concerning tapering. Not only he said that talking about tapering is premature, but he downplayed the inflation that forecasters are expecting this year. To drive U.S. Treasuries today and next week will be news concerning Biden’s $1.9 trillion Stimulus plan.

  • ECB minutes boost European sovereigns as it mentions the possibility of another rate cut in case of further economic deterioration (BUNDMAR21, 10YOATMAR21). Even though Italy has entered into another government crisis, EU sovereigns are faring quite well due to the ECB support. In last month’s report, the ECB discussed about the fundamental role of the bond purchasing program and the fact that it can be adjusted to prevent tightening of economic conditions. To boost prices in the European sovereign space is the mention that the central banks might cut further the benchmark rate.

  • Gold (XAUUSD) and especially silver (XAGUSD) received a boost after Fed Chair Powell said that rates will not be raised anytime soon and not before troubling signs of inflation starts to emerge. These remarks helped send 10-year breakevens (inflation) higher while real yields dropped back below –1%. The gold-silver ratio briefly slumped as silver received a bid from President-elect Joe Biden’s $1.9 trillion stimulus plan. Overall, however the continued dollar strength is preventing both metals from recovering in earnest following the recent yield-spike-led weakness. HG Copper (COPPERUSMAR21) opened strongly in Asia on U.S. stimulus news but has since turned lower as the market consider whether most of the price supportive news have now been priced in.

What is going on?

  • The incoming Biden administration has released a $1.9 trillion Covid-19 relief plan - to deal with the impact of Covid-19. The market broadly expected this size proposal which among others included spending for school reopenings, testing and vaccinations, $1400 stimulus checks, paid sick leave, and a $15/hour minimum wage. The subdued market reaction was due to uncertainty about how amenable key individual Democrat and independent senators are to Biden’s stimulus and other initiatives. This is also an issue in the House, given that the incoming Democratic majority in the House will be slimmer than it was over the last two years of Trump’s presidency.

  • CDU frontrunner could spell a change in EU policy – Friedrich Merz is being highlighted as the potential successor to Angela Merkel as the new party leader of CDU. He views on the EU was more conservative and less pro EU compared to Merkel which means that the “frugal nations” could get another ally and basically increase tensions between northern and southern countries. But it might also weaken Germany’s willingness to foot the bill during the next crisis and slow down the integration process.

  • Quant from Research Affiliates writes note on potential Bitcoin manipulation Alex Pickard has written the note Bitcoin: Magic Internet Money which explains his journey from buying the first coin in 2013 before making so much money that he left Research Affiliates to mine Bitcoins, before returning to his former employer. He now writes about his experience and talks about that the market is most likely manipulated.

What are we watching next?

  • Italian Conte looking for support before parliament meeting on Monday – There are little alternative for the Italian government: it’s either a new majority, a technical government or early elections. Conte is doing everything he can to avoid the latter and to form a new majority. There are news that he has secured already support from members from Berlusconi’s Forza Italia Party and even from some senators belonging to the small party that caused the government to fall in the first place. The news should boost sentiment in the BTP which from the market opening are tightening.

  • US public unrest risks ahead of US inauguration next Wednesday? - US lawmakers have issued warnings that groups plan to protest the result of the 2020 election in the US capital and at all state capitals this weekend and some groups have encouraged carrying firearms to demonstrations. Hopefully, none of this occurs, but some measure of caution is warranted after the events of last week. For short-term traders it might be a good idea to think about how much exposure to carry into the weekend.

  • Vaccine impact on Israeli Covid-19 infections – Israel has now vaccinated 24% of the population with most people only getting the first dose, but the country has also started giving the second shot and the country has said that it is beginning to see the positive impact from vaccination. The coming weeks will provide the market with an idea of the positive impact from vaccinations which is directly linked to future economic growth and our reflation trade.

  • Q4 2021 earnings season starts this. Q3 2020 earnings season was the big comeback for corporate earnings and the market expect the momentum to continue in the Q4 earnings season. Delta Air Lines surprised to the upside on Q4 revenue yesterday and guided positive cash flows during sometime in Spring lifting the shares. Today is the most important day this week with JPMorgan Chase, Citigroup, and Wells Fargo reporting Q4 earnings and more importantly provide the market with an update on loan losses and the US economy.

Economic Calendar Highlights for today (times GMT)

  • 1000 – Eurozone Trade Balance (Dec)
  • 1330 – US PPI (Dec)
  • 1330 – US Empire Manufacturing Index (Jan)
  • 1330 – US Retail Sales (Dec)
  • 1415 – US Capacity Utilization (Dec)
  • 1500 – US University of Michigan Consumer Sentiment (Jan P)
  • During the day – IEA's January Oil Market Report

Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.