Market Quick Take - April 22, 2021 Market Quick Take - April 22, 2021 Market Quick Take - April 22, 2021

Market Quick Take - April 22, 2021

Macro 6 minutes to read
Saxo Strategy Team

Summary:  Sentiment bounced back in the US yesterday after the weakness of the prior two days, with Japan also staging a comeback overnight. Yesterday, the Bank of Canada sharply brought forward its anticipated timeframe for a full economic recovery and tapered asset purchases, the first G10 central bank to do so. Today, the ECB meeting is in focus, with little anticipation of strong signals after yield rises from earlier this week have since been tamed.

What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) – US equities bounced back yesterday after the prior couple of weak sessions, with small caps outperforming large caps and with the all-time highs not far away again – just above 14,000 for the Nasdaq 100 and 4,183 in the S&P 500. We encourage a cautious stance despite the strength as the seasonal headwinds of May and the slightly delayed US tax season could offer headwinds in coming weeks.

STOXX 50 (EU.I) - risk-on came back yesterday led by the most speculative segments of the market and STOXX 50 futures are opening higher on the open and have almost erased the losses from two days ago. The earnings season in Europe continues to deliver better than expected operating earnings and our expectation is that it will underpin momentum in the short-term. A close today above 3,945 would be bullish for European equities.

Bitcoin (BITCOIN_XBTE:xome) and Ethereum (ETHEREUM_XBTE:xome) - Bitcoin and Ethereum are in two very different places, as the former continues to struggle after the traumatic sell-off at the weekend and has remained well south of the key 60k level, trading this morning close to 54k after testing below 53k overnight. The 50k area looks important there for staving off lower levels still. Ethereum, on the other hand, is having a go at the all-time highs again, trading near 2,450 this morning.

EURUSD and AUDUSD – EURUSD is trying to hang on to the 1.2000 level ahead of the ECB meeting today and it was offered a helping hand, as was the AUDUSD, by a revival of risk sentiment yesterday, which helped push the USD back lower. Risk sentiment will likely remain the key driver for both pairs, with EURUSD likely trading with lower beta to shifts in sentiment than the more sensitive AUDUSD. The ECB is not likely to provide a new angle, and EURUSD can consolidate as far back as 1.1850 without erasing the implications of the recent rally off the 1.1700 lows, other points of interest include the 1.1925 area, near the 200-day moving average. For AUDUSD, the reversal on Tuesday was tactically bearish, but only insofar as risk sentiment deteriorates again, as yesterday’s bounce showed – tactical resistance is 0.7750-75, with a close above 0.7800 indicating a focus back on the 0.8000+ highs, and a close below 0.7700 now tilting the price action more bearish, especially if 0.7650 eventually falls as well.

USDCAD The Bank of Canada surprised with its hawkish stance as it became the first central bank to taper asset purchases (from C$4B per week to C$3B) but also brought forward the anticipated achievement of a “full economic recovery” to the second half of 2022 from 2023, which many see as also bringing forward the date of the first rate hike. The Bank also raised growth estimates for this year and slightly lowering them for next year. The boost to CAD was immediate and large, if softened somewhat during the press conference of Governor Macklem, who emphasized that rate hikes will not necessarily arrive immediately with the attainment of key milestones like the 2% sustained inflation. The price action underlines that 1.2600/50 is the key upside break level, while the cycle low of 1.2365 is now the downside focus. The move lower in USDCAD could fizzle and reverse immediately if risk sentiment suddenly deteriorates again and crude oil sells off, but this development could offer sustained support in the CAD crosses (contrast with Australia’s RBA, for example, making AUDCAD downside an interesting angle.

Crude oil futures (OILUKJUN21 & OILUSJUN21) trade defensively amid the risk of another coronavirus flare-up with Asia, especially India, becoming the latest epicenter. An uneven global demand recovery may put into doubt the ability of OPEC+ to proceed with their announced May to July production increases. Despite of these latest developments we see a limited downside risk with Brent crude likely remain stuck in the 60’s for the remainder of this quarter or until vaccine rollouts significantly changes the demand dynamics.

Gold (XAUUSD) at a two-month high is edging closer to the psychological level of $1800, supported by weakness in US dollar and easing Treasury yields, geopolitical developments and fresh momentum after managing to bounce from $1760-65 support area. Total holdings in bullion-backed ETFs have held steady for the past week with longer term trend funds still either holding short or neutral positions at this stage. Next level of resistance beyond $1800 being the February high at $1818. Supported by another strong day for copper, Silver (XAGUSD) managed to reach a five-week high against gold before hitting some resistance at $26.65, the March 18 high.

Doves and hawks’ divergence and growth revisions are key for today’s European Central Bank meeting (IS0L:xetr, TLT:xnas, IEF:xnas). We believe that at today's ECB meeting it will be important to focus on the central bank’s economic forecasts. A stronger-than-expected economic growth is what animates the hawks to say that by the end of this year the PEPP will start to be unwound. An orderly bond market might also support this hawkish stance. Ahead of the ECB meeting Spain will issue 3-, 7-, and 19-year bonds and France will come to the market with 3-, 5-and 7-year OATs.

What is going on?

Grain prices continue to surge higher with the Bloomberg Grains spot index hitting the highest level since 2013. The rally, both in terms of strength and investor participation has been led by corn (CORNJUL21) which broke through $6/bushel yesterday on a combination of cold weather hurting newly planted U.S. crop and declining crop conditions in Brazil. Soybeans (SOYBEANJUL21) reached a seven-year high close to $15/bu while wheat (WHEATJUL21) traded up for a third session. Booming Chinese demand may ease after the government recommended a reduction of corn and soymeal in animal feed. While fundamentals remain bullish the market is overbought and with option expiration on Friday, we may see some additional short-term volatility.

Apple and Alphabet came under bipartisan pressure in a US Senate Antitrust Hearing - for the powers they exercise over the marketplace via their App Store (Apple) and Google Play Store. Spotify participated in the hearing, describing how it paid Apple $500 million for App Store commission fees while competing with Apple’s music streaming service. For more, see coverage from Marketwatch.

Strong earnings this morning from Volvo and Nestle. European companies have come out of the crisis in a good shape and this morning Nestle is reporting organic revenue growth of 7.7% twice of that expected by analysts and driven only by a 1.2% pricing increase and strong uptake in Asia where restaurants have reopened. Volvo reports Q1 operating profit of SEK 11.8bn vs est. SEK 9.4bn on revenue in line with estimates. The Swedish-based carmaker says that the shortage of semiconductors is still impacting production.

What are we watching next?

ECB meeting today – this meeting looks less critical for the ECB than it did at the beginning of this week as sovereign EU yields retreated sharply over the last couple of days. This could render the meeting a non-event, though we should watch for any comments on recent rises in, for example, the Portuguese yield spread versus Germany. More pivotal for the longer cycle is likely the German political situation we wrote about again yesterday, where Green involvement in a new government after the late September election could transform Europe to a new era. As well, the results of the ECB’s comprehensive Strategy Review will be announced at the June meeting.

US President Biden set to officially recognize the Armenian genocide – the move to recognize the systematic ethnic cleansing and killing of Armenians in the Ottoman Empire during the 1915-1917 portion of World War I will anger Turkey and its leader, Recep Erdogan, creating new possible tensions among the two NATO allies.

Earnings reports this week. Q1 earnings have so far been good with S&P 500 showing a 5% revenue surprise and 38% earnings surprise across 83 earnings reports. The biggest revenue surprise has been observed so far in the energy, materials, and financials sectors. Today, our key focus is on earnings from Intel and Snap, with Intel being particularly interesting because of its recent change of strategy mimicking TSMC’s foundry model and because of its decision to ramp up production in the US. Our view is that Intel will benefit over time from national security decisions in the US to limit the country’s dependence on Taiwan for semiconductors. Snap is interesting because it is the first Q1 earnings that will show whether online advertising continues to be robust.

  • Today:Ping An Insurance, Chugai Pharmaceutical, Nidec, Danaher, Union Pacific, Intel, Snap, AT&T, Blackstone Group, HCA Healthcare
  • Friday: Daimler, American Express, Honeywell International

Economic Calendar Highlights for today (times GMT)

  • 1145 – ECB Rate Announcement
  • 1230 – ECB President Lagarde Press Conference
  • 1230 – US Weekly Initial Jobless Claims
  • 1430 – US WEekly Natural Gas Storage Change
  • 2300 – Australia Flash Apr. Services and Manufacturing PMI
  • 2330 – Japan Mar. National CPI
  • 0030 – Japan Flash Apr. Services and Manufacturing PMI

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

Apple Sportify Soundcloud Stitcher


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, 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. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such 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.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

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

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.