DAX above 15,000 for 1st time

TAKEAWAYS

•    German benchmark DAX index breaks above 15,000 for the first time
•    Gold breaks back below major $1700 per oz price support
•    USD/JPY tops 110 for first time in a year
•    US stocks close the day lower but finish off the lows
•    Hang Seng higher as China tech stocks sold by Archegos fund rebound
•    US President Biden to announce tax hike plans today
•    CME will launch Bitcoin ‘micro futures’ on May 3 (worth 1/10 BTC)
•    US March consumer confidence blows away expectations (109.7 vs 96.7 exp)
•    German regions to restrict AstraZeneca vaccine to over-55s

BEST CHART
EUR/GBP – Daily Candlesticks

Source: GKFX / MT4 (March 30, 2021)

EUR/GBP has now retraced 78.6% of its huge rally between February and March 2020. The price now looks to be breaking lower in a sign that the 5-year lows near 0.82 will be tested again.

GURU WISDOM

“The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.” – Paul Tudor Jones

MARKETS

*Daily closing price
↘ EUR/USD    1.1719        (-0.37%)
↘ GBP/USD    1.3738        (-0.15%)
↗ USD/JPY    110.36        (+0.53%)
↘ S&P 500    3958.55    (-0.32%)
↗ Hang Seng    28,572.37    (+0.88%)
↘ Gold        1685.26    (-1.56%)
↘ Oil (Brent)    64.03        (-1.46%)
↘ Bitcoin    58,686        (+1.76%)

NEWS

A strong uptrend and blowout consumer confidence data pushed up the US dollar again on Tuesday. With the dollar rising, the other havens like the yen and gold fell out of favour. USD/JPY topped 110 for the first time in a year and gold fell below $1700 per oz in a test of the March low.

Germany’s Dax index struck 15,000 for the first time today, setting a new record high as bank stocks led the way on higher yields and limited fallout from the Archegos hedge fund margin call. The optimism in German stocks comes despite more uncertainty over covid restrictions and the vaccine rollout – with some German states blocking the AstraZeneca vaccine for under-55s. 

Cyclical stocks in general have been doing well in the run up to a speech expected later today from President Biden outlining an infrastructure spending bill that is likely to also involve higher taxes to pay for it. The big one for markets is the capital gains tax possibly rising from 21% to 28%, which could both lower earnings expectations and lower stock market investment. The fear of higher taxes under a Democratic government has been set aside since the election result in November because of the focus on the economic rebound this year after the pandemic. 

DAY AHEAD 

*Times in GMT
01:00 – China Non-Manufacturing PMI(Mar) [52.6 Exp vs. 51.4 Prev]    
01:00 – China NBS Manufacturing PMI(Mar) [51.2 Exp vs. 50.6 Prev]
06:45 – France Consumer Price Index (EU norm) (YoY)(Mar) Prel [1.3 % Exp vs. 0.8 % Prev] 
09:00 – Eurozone Consumer Price Index (YoY)(Mar) Prel [1.3 % Exp vs. 0.9 % Prev]
12:15 - ADP Employment Change (Mar) [550 K Exp vs. 117 K Prev]
N/A - President Biden speech 

Source: TradingWriters.com