Market Quick Take - March 10, 2021 Market Quick Take - March 10, 2021 Market Quick Take - March 10, 2021

Market Quick Take - March 10, 2021

Macro 4 minutes to read
Saxo Strategy Team

Summary:  US equity markets came roaring back yesterday and rallied across the board, although it was the recently beleaguered speculative stocks that rallied the most. A solid rally in the treasury market after a strong 3-year auction may have been a key driver. The good cheer was largely shrugged off in Asia, and the USD stayed firm while the oil market correction lower deepened.

What is our trading focus?

Nasdaq 100 (USNAS100.Iand S&P 500 (US500.I)like a spring that had been pulled too hard everything snapped back yesterday in terms of risk including US equities with Nasdaq 100 futures rallying 4% taking out the previous trading day high. Yesterday’s price action highlights the increased sensitivity to US interest rate levels and changes, but also the fragility in positioning leading to large intraday volatility in US equity indices over the past couple of weeks. China PPI figures overnight surprised to the upside and the US CPI scheduled for release later today is the key intraday risk for US equities as a surprise to the upside could take US interest rates higher again and equities lower.

Bitcoin (BITCOIN_XBTE:xome) and Ethereum (ETHEREUM_XBTE:xome) - cryptocurrencies topped out at new local highs over night, but Bitcoin traded back below 54,000 this morning and Ethereum is struggling to maintain the 1,800 level after nearly punching to 1,900 overnight. In the US,lawmakers introduced a bill to clarify crypto regulations (more below).

USDJPY– the USDJPY pairfinally found resistance yesterday after trading north of 109.00, correcting below 108.50 at one point yesterday in the wake of a strong US 3-year treasury note auction that brought US yields all across the curve lower. The pair rebound overnight and is likely to remain sensitive to the direction of US yields over tonight’s 10-year and tomorrow’s 30-year treasury auctions. The next key chart point is the 110 area, whichprovided resistance on multiple occasions in 2020 and is roughly the area of the broad, descending channel for USDJPY that began as far back as 2017.

AUDUSDyesterday’s action emphasized once again that it is far more important lately to track the moves in commodity prices than general risk sentiment, as the AUD largely shrugged off the rally in risk sentiment in the US as iron ore prices suffered a very large mark down of some 6% in the Chinese futures market overnight (iron ore is Australia’s largest export). As noted recently, the 0.7620 area recent lows are an important Fibonacci support, and the next levels are the pivot low of near 0.7565 and then the prior major top on the way up just above 0.7414, followed by the 61.8% Fibo retracement of the rally wave from the early November low near 0.7380.

Crude oil (OILUKMAY21 & OILUSAPR21) continues to trade lower following Monday's firm rejection above $70/b, potentially the first sign of a market that has reached its potential given current fundamentals. A drop in open interest during the latest run up in prices could indicate a focus switch to profit taking from continued buying. Adding to the unease was an industry report showing crude oil inventories jumped 12.8 million barrels last week. A survey ahead of today’s EIA report only points to a 2.5-million-barrel increase. Staying with the EIA, in their latest Short-term energy outlook,they raised their 202non-OPEC supply growth while adjusting global demand a tad lower. In Brent support at $65.80 needs to hold in order to avoid removing the OPEC+ rollover rally. 

Gold (XAUUSD)maintains its focus on yields and the dollar and as a result traded higher yesterday as both dropped, thereby confirming the importance of theband of support between $1670 and $1690So far, however the recovery has been muted with continued focus on the bond market which awaits an important 10-year Treasury bond auction today (see below). Inflation remains gold’s best friend and the market was given another dose overnight after Chinese factory costs (PPI) rose to the highest since November 2018, this just before the year-on-year rise in crude oil look set to hit 250% in April. 

What is going on?

US lawmakers introduce bill to clarify crypto regulations, with input from the SEC, CFTC and others. The stated purpose of this bipartisan bill, titled the “Eliminate Barriers to Innovation Act of 2021”, would be to clarify jurisdiction for federal agencies over the crypto space and to gather input from industry and other experts, with the aim of establishing acomprehensive regulatory framework for digital assetsA working group will be created within 90 days if the bill passes.

Solid 3-year US Treasury auction paves the way for 10-year Treasury bond auction today (TLT, IEF).Yesterday’s auction for 3-year Treasuries attracted the highest demand since June 2018however, indirect bidders declined showing that foreign demand is still laggingThe drop in foreign demand is particularly concerning ahead of the $38 billion 10-year auction today, as indirect bidders’ demand remain key to support prices in long-term Treasury auctions. For the first time in nearly fivesessions the 10-year Treasury yield dropped and closed the day at 1.53%. Today, US CPI numbers will be released ahead of the key 10-year auction.

China PPI out at 1.7% year-on-year versus 1.5% expected and vs. +0.3% YoY in Jan. - this price series tracks closely, in directional terms, with the change in oil price, which is approximately unchanged for the Brent benchmark year on year by end of February. The year-on-yearcomparisons will shift dramatically higher for Brent in March and especially April due to the basing effects of the collapse in crude prices last year in the spring. The six month change in the yearly China PPI is currently at 3.7%-pts which is the highest acceleration in Chinese producer prices since early 2017 which was the last time the world economy experienced a jolt of inflation.

What are we watching next?

US Treasury auctions today and tomorrow-as we have noted recently, equity markets now appear hyper-sensitive to developments in the treasury market after the steep rise of yields over the last couple of weeks and especially after the disorderly 7-year treasury auction on Feb 25 touched off a firestorm of volatility. Much of yesterday’s almost frantic rally was linked to a strong 3-year treasury auction (noted above), but arguably the longer maturity auctions are more interesting, due to the longer-term uncertainties for bond investors in an environment of possibly risinginflation. A10-year Treasury auction is up today and a 30-year T-Bond auction on Thursday.

Earnings releases to watch this week:

Today’s focus is on earnings from Adidas and Inditex representinga good insight on European retailing. Adidas is beating on Q4 revenue by a small margin but disappoints slightly on gross margincoming in lower than expected. Especially emerging markets revenue was much better than expected giving a glimpse of what to expect for Adidas when the rest of the world economy opens.Inditex has also reported in European pre-market with revenue disappointing a lot in Q4 and even worse negative surprise against expectations on EBIT.

  • Today: AdidasGeberit, Oracle, Franco-Nevada, Inditex, Legal & General Group

  • Thursday: Pinduoduo, Jardine, Matheson, MTR Corp, Jardine Strategic, China Unicom Hong Kong, Sunac China, Swire Properties, Hannover Rueck, JD.comDocuSignStoneCo,GoodRx, Wheaton Precious Metals, Assicurazioni Generali

  • Friday: China Mengniu Dairy, EssilorLuxottica, Fortum, AIA Group


Economic Calendar Highlights for today (times GMT)

1330 – US Feb. CPI
1500 – Bank of Canada Rate Decision
1530 – US Weekly DoE Crude Oil and Product Inventories
1800 - US 10-year Treasury Auction
0001 – UK Feb. RICS House Price Balance

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.