NZD/USD has biggest drop in a year

TAKEAWAYS

•    NZD/USD sees biggest drop in a year as New Zealand government curbs housing bubble
•    US dollar surges to a 2-week high
•    The bull market, which began when US indices bottomed on March 23, 2020 is one year old
•    S&P 500 has just recorded its largest 12-month gain since 1936
•    QQQ the Nasdaq 100 ETF had its biggest one-day inflow since the year 2000
•    Russell 2000 drops below its 50 DMA
•    US 10-year yields fall back 10 1.65%, back to post-FOMC lows
•    Crude oil dives another 6% - Brent crude back to $60 handle
•    European stocks slide as continent returns to lockdown
•    EU blocks Vaccine Exports

BEST CHART
NZD/USD – Daily Candlesticks

 
Source: GKFX / MT4 (March 23, 2021)

NZD/USD fell below critical support from the Jan 18 and Mar 19 lows to hit a fresh 2021 low. The Kiwi has stabilised at the 0.70 round number but a break below a rising trendline connecting the lows from May and October 2020 suggests more downside is possible. 

GURU WISDOM

“The men on the trading floor may not have been to school, but they have Ph.D.’s in man’s ignorance.” - Michael M. Lewis 

MARKETS

*Daily closing price
↘ EUR/USD    1.1852        (-0.66%)
↘ GBP/USD    1.3756        (-0.77%)
↘ USD/JPY    108.61        (-0.20%)
↘ S&P 500    3910.52    (-0.76%)
↘ Hang Seng    28,497.38    (-1.34%)
↘ Gold        1726.97    (-0.67%)
↘ Oil (Brent)    60.31        (-6.67%)
↗ Bitcoin    54,587        (+0.95%)

NEWS

The New Zealand dollar was top faller in FX markets on Tuesday after Prime Minister Jacinda Ardern’s government took new steps to cool the housing market. The removal of mortgage interest as a tax-deductible expense and extending the time on which profits from a housing sale can be taxed to 10 years are predicted to have a ‘chilling’ effect on investment in New Zealand.

The price of oil continued its string of sharp daily losses, taking Brent crude from $70 to $60 per barrel in just over 2 weeks. New lockdowns in Europe, including some the tightest restrictions yeti n Germany are seeing traders step back from ‘reopening trades’ including oil.

Another big rotation trade that has been unravelling is the Russell 2000 index of small cap stocks in America. The index fell below its 50-day moving average on Tuesday. The index is up an eye-watering 122% over the past 12 months. The S&P 500 had its best 12-months since 1936.

DAY AHEAD 

*Times in GMT
07:00 – UK Consumer Price Index (YoY)(Feb) [0.8 % Exp vs. 0.7 % Prev]
08:30 - Germany Markit Manufacturing PMI(Mar) Prel [60.8 Exp vs. 60.7 Prev]
09:30 – UK Markit Services PMI(Mar) Prel  [-51 Exp vs. 49.5 Prev]
12:30 – US Durable Goods Orders(Feb) [0.8 % Exp vs. 3.4 % Prev]
14:00 - Fed's Chair Powell testifies 
15:40 - ECB's President Lagarde speech