European stocks have worst day of 2021

TAKEAWAYS

•    FTSE 100 drops 2%, Euro STOXX 600 index sees biggest daily drop since December
•    Dow Jones falls back under 34,000
•    GBP/USD falls back from 1.40 handle
•    Gold price bounces after Monday dip
•    WTI crude oil slid back under $62 before rebounding after API data
•    Lumber futures break 16-day winning streak
•    Netflix stock slumps -11% after big subscribers miss and weak guidance
•    Dogecoin fell -20% in catch-down move to weekend crypto market drop
•    Indian Prime Minister Modi says new lockdowns “last resort” as covid deaths jump
•    Green Party takes lead in German election poll
•    EU drug regulator finds link between J&J covid vaccine and blood clots, still recommends

WISDOM

"Every once in a while, the market does something so stupid it takes your breath away." – Jim Cramer

MARKETS

*Daily closing price
↗ EUR/USD    1.2035        (+0.02%)
↘ GBP/USD    1.3708        (-0.32%)
↘ USD/JPY    109.65        (-0.06%)
↘ S&P 500    4134.94    (-0.68%)
↗ Gold        1779.05    (+0.55%)
↘ Oil (Brent)    66.31        (-1.10%)
↗ Bitcoin    57,051        (+2.54%)

CALENDAR

*Times in GMT
01:30 – Australia Retail Sales s.a. (MoM)(Mar) Prel  [1 % Exp vs. -0.8 % Prev] 
06:00 – UK Consumer Price Index (YoY)(Mar) [0.8 % Exp vs. 0.4 % Prev] 
10:30 – UK BoE's Governor Bailey speech 
12:30 – Canada Consumer Price Index (YoY)(Mar) [2.3 % Exp vs. 1.1 % Prev] 
14:00 - BoC Interest Rate Decision [0.25 % Exp vs. 0.25 % Prev]

BEST CHART

Wall Street 30 – 4hr Candlesticks

 
Source: GKFX Prime / Metatrader 4 

WS30 has swung back underneath the big 34,000 round number and also broken a rising trendline connecting lows since April 1. The uptrend is still in play but the breakdown through support indicates a bigger correction.

NEWS

The mood in stock markets turned a little darker on Tuesday with shares in Europe leading the declines amid a turn away from ‘cyclical stocks’ concentrated in the region. Tobacco stocks were among the biggest fallers on talk of new US regulations to limit nicotine in cigarettes. So-called ‘Reopening stocks’ led losses on the Dow Jones, which fell 250 point back under the 34,000 level.

It was noteworthy that the weakness came as BlackRock CIO Rick Rieder said in a TV interview that the “Fed is overdoing it” and “the system has too much liquidity”.

The risk-off sentiment saw renewed demand for the US dollar, which bounced off 7-week lows. GBP/USD was among the biggest decliners as forex traders sold Sterling at 1.40 resistance.

USD/CAD will be the focus on Wednesday as the Bank of Canada decides its next monetary policy move. The consensus view is that the BoC meeting will see a ‘dovish taper’ – meaning the central bank will speak of plans to taper its QE program, while emphasising the risks to the economy from the latest wave of covid cases. The Canadian Capital City of Toronto has entered a temporary period of martial law, with police given new powers to enforce a state-wide lockdown.

SOURCES

https://www.fxstreet.com/economic-calendar
https://www.investing.com/crypto/bitcoin/btc-usd
https://www.forexlive.com/centralbank/!/bank-of-canada-preview-its-taper-time-but-outlook-gap-estimate-is-key-20210420
https://www.cnbc.com/2021/04/20/netflix-nflx-q1-2021-earnings.html