Market Quick Take - August 2, 2021 Market Quick Take - August 2, 2021 Market Quick Take - August 2, 2021

Market Quick Take - August 2, 2021

Macro 6 minutes to read
Saxo Be Invested
Saxo Strategy Team

Summary:  Asian stocks, as well as U.S. futures rose in Asia as some concerns over China's regulatory crackdown eased and progress on a U.S. infrastructure plan helped sentiment. In addition, a Covid-19 spike in China has raised some growth concerns spurring bets on monetary easing driving lower both Chinese and U.S. Treasury yields overnight. The dollar trades steady following an end of week squeeze on recently established longs. Crude oil trades lower on China growth and Delta worries while gold remains stuck despite strong tailwinds from lower yields and dollar. Focus on Friday's U.S. job report and further news from China after July Manufacturing weakened amid export weakness and supply disruptions.

What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) – US equity futures are starting the week on a positive note with Nasdaq 100 futures up 0.5% driven by strong earnings across the board and positive sentiment coming out of Square’s $29bn acquisition of Afterpay, and of course the lower US 10-year yield which is compressing real yields and supporting valuations. S&P 500 futures are also following Nasdaq 100 up higher highlighting that today’s rally is broad-based.

Bitcoin (BITCOIN_XBTE:xome) and Ethereum (ETHEREUM_XBTE:xome) - Bitcoin is falling below 40,000 this morning as regulatory pressures continue to darken the news sentiment. The latest worries for crypto traders are a new bill in the US Congress aiming to tax crypto profits to fund the US infrastructure deal and a new bill that aims to require US firms in the crypto industry to send a form 1099 to their customers; in the case a customers choose to remain anonymous it will per definition be regarded as US tax evasion.

AUDUSD – despite weaker than expected Chinese PMI figures AUDUSD is not extending its declines from last week showing the market is not selling commodity currencies on weak news despite CFTC data shows that the non-commercial futures positions increased their net short position for the fifth straight week. Maybe traders are betting that China will soon swing into stimulus and revert some of that recent negative sentiment over the economy and its markets.

Arabica coffee (COFFEENYSEP21) continues to see the biggest price swings since 2014 after weather worries in Brazil, the world’s largest producer and exporter of coffee, last week sent prices to a 2014 high at $2.15/lb, before dropping to $1.80 on Friday after reports the recent cold spell may have been less devastating than expected. It is still too early to estimate production losses, as more cold weather may emerge, and with that in mind we expect continued volatility with some underlying support emerging soon.

Gold (XAUUSD) remains stuck close to $1800 following an end of week roller-coaster which saw the metal reverse sharply lower after once again finding resistance above the 200-day moving average, currently at $1820. These developments have created a double top which has led to fresh tactical short selling. Having just returned from my summer holiday, the first thing that springs to mind is golds continued inability to respond positively to the July collapse in US 10-year real yields to a record low. Overall, the metal remains stuck in a 50-dollar range with a continued recovery in silver (XAGUSD) from a recent six-month low against gold needed to support precious metals in general. Focus on Friday’s U.S. job report.

Crude oil futures have given back some of last week's gains overnight in response to weaker China data and continued worried about the spreading of the delta coronavirus variant. The market meanwhile is also watching rising tensions between the U.S. and Iran as Washington on Sunday warned about an “appropriate response” after blaming Tehran for last week’s drone attack on an Israel-linked oil tanker. Brent crude oil has settled into a range around $75 with Delta demand worries offsetting the current tight supply outlook. Focus on Iran developments and EIA’s weekly stock report with Cushing levels currently trailing the five-year average by close to 30%.

US Govt Bonds (SHY:xnas, TLT:xnas, IEF:xnas) - The US 10-year yield is trading below 1.23% this morning continuing its push lower as investors demand safe assets driven by increased worries over the economy driven by a Chinese economy slowing down (PMI figures disappointed today). New data is also showing that Japan’s GPIF (public pension fund) has reduced its US Treasury holdings to 35% down from 47% previously highlighting that foreign investors are increasingly worried about the real yields offered by US bonds.

What is going on?

Bullard leans more hawkish than Powell in recent speech. On Friday Federal Reserve Bank of St. Louis President James Bullard said Federal Reserve policy makers should begin tapering of asset purchases in the fall and wind up the process by March 2022 in light of U.S. inflation running much higher than expected. Furthermore, he said “My preference would be to get a decision in September and start sometime after that”.

Square is buying Afterpay in $29bn acquisition. The Australian-based Afterpay is the most successful story within the buy now and pay after industry, with revenue growing 93% in 2020. With today’s acquisition announcement Afterpay gets a takeover value to revenue metric of 42x which is most likely the highest in modern equity markets for an acquisition of this size.

Protests in South Africa cloud the outlook, shake the Rand. Violent protests against the jailing of former South African president Jacob Zuma have resulted in several deaths, road closures and widespread business closures as more than 200 shopping centres were looted in what current president Ramaphosa described as “opportunistic looting”. AT the same time, the country is in the midst of a fresh and deadly Covid resurgence.

What are we watching next?

SEC blocking of Chinese IPOs. The US regulators are scrutinizing Chinese IPOs and blocking them until demanding better risk disclosures are met. This is another step in the ongoing tensions between the US and China and follows China’s own crackdown on for-profit education companies and technology firms relying on user data. The news has got Chinese-listed technology firms to rally today.

Earnings to watch this week. The Q2 earnings season has so far been strong with few signs of companies being hit by rising commodity prices. However, some companies such as Unilever are out saying that it is beginning to impact margins and thus the rising commodity prices could be a theme to watch for Q3 or Q4. This week almost 200 companies are reporting earnings with the most important listed below:

  • Today: Heineken, HSBC, Mitsubishi UFJ, AXA, Ferrari
  • Tuesday: Amgen, Alibaba, Eli Lilly, Fidelity National Information, BP, ConocoPhillips, BMW, Infineon Technologies, Activision Blizzard
  • Wednesday: Toyota Motor, Sony, General Motors, Booking, Uber, CVS Health, Sampo, Siemens Energy, Intesa Sanpaolo, SoftBank, JDE Peet’s, Roku, Etsy
  • Thursday: Zoetis, Siemens, Merck, Deutsche Post, Becton Dickinson, Cigna, Duke Energy, Square, Illumina, Novo Nordisk, Moderna, Adidas, Credit Agricole, Zalando, Continental, Semiconductor Manufacturing, Nintendo, Glencore, Regeneron Pharmaceuticals, Cloudflare
  • Friday: Allianz, NTT, AP Moller – Maersk,
  • Saturday: Berkshire Hathaway

Economic Calendar Highlights for today (times GMT)

  • 0800 – Markit Eurozone Manufacturing
  • 1400 – US Construction Spending
  • 1400 – US ISM Manufacturing

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

Apple Sportify Soundcloud Stitcher

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • 350x200 peter

    Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • 350x200 althea

    Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • 350x200 peter

    Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • 350x200 charu (1)

    FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • 350x200 ole

    Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article


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.