Market Update 17 May 2021
Markets are off the extremes looking for direction. Will Risk off gain short to medium term traction or will the trend prevail?
Stimulus and the Feds balance sheet supports the latter while common sense – if existing in the markets – seem to support the former.
Indexes could recover off the Thursday Morning lows but for now lack the strength to reach new highs, the USD Index fell in line with 10 year rates but remains above the 90 support level.
Chinese Retail Sales disappointed massively but did not have a huge impact on market sentiment.
Bitcoin sold off massively after Elon Musk announced. Tesla would no longer accept the crypto currency due to environmental concerns. It seems strange that he continues to announce this kind of market moving news via Twitter.
German Bunds trade at the highest level in 2 years at only -0.1%.
Next key event is the Japanese GDP during the night and the EU GDP tomorrow.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.