Oil price drops after AZ vaccine suspensions

TAKEAWAYS

•    EUR/USD holds above 1.19 despite higher ECB asset purchases
•    GBP/USD under 1.39 in lead up to BOE meeting this week
•    Dow Jones hits sixth successive record high
•    US 10-year Treasuries edged down from 13-month highs made on Friday
•    Bitcoin drops back from $60k on talk of a whale preparing to dump BTC
•    Gold climbs despite dollar strength ahead of FOMC meeting this week
•    Oil price extends last week’s decline amid vaccine concerns in Europe
•    Airline stocks gained after reports of rising bookings in February
•    Germany & Spain suspend AstraZeneca vaccine over blood clot fears

BEST CHART
NZD/USD – Weekly Candlesticks

Source: GKFX / MT4 (March 16, 2021)

NZD/USD saw a sharp reversal from former longer-term resistance under 0.745 but has now steadied. A break below the tweezer bottom at 0.71 could open up a much larger retracement of the rally that began in March last year. 

GURU WISDOM

“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.”
— Warren Buffett

MARKETS

*Daily closing price
↘ EUR/USD    1.1930        (-0.17%)
↘ GBP/USD    1.3900        (-0.22%)
↗ USD/JPY    109.15        (+0.04%)
↗ S&P 500    3968.94    (+0.65%)
↗ Hang Seng    28,833.76    (+0.33%)
↗ Gold        1731.82    (+0.37%)
↘ Oil (Brent)    68.77        (-1.02%)
↘ Bitcoin    56,600        (-4.08%)

NEWS

News that more major European countries are suspending the covid-19 vaccine created by Oxford University and AstraZeneca has caused some unease in oil markets. The oil price has been coming off the big $70 level in Brent crude that was hit last week over concerns that a third wave of the coronavirus in Europe that could dislodge the recovery in oil demand.

The price of gold edged up for a second day in the face of a strong US dollar. The sell-off that has seen the yellow metal lose 10% year-to-date has steadied near $1700 per oz. There is a chance that the Fed’s Jerome Powell sounds the alarm over rising yields at the FOMC meeting this week, which could ease the bond market selloff and help precious metals.

The US dollar edged up at the start of the week in light trading across FX markets before a big week of central bank meetings. US retail sales data will be the near-term catalyst for whether the buck can maintain the strength leading into Wednesday’s Fed decision.

Bitcoin saw heavy losses after reaching over $61,000 on Sunday amid chatter over a large transaction of 19,000 BTC on the blockchain that suggests a whale (a Bitcoin trader that holds more than 1000 BTC) is about to sell.

DAY AHEAD 

*Times in GMT
04:05 - BoJ's Governor Kuroda speech 
04:30 – Japan Industrial Production (YoY)(Jan) 
10:00 – Germany ZEW Survey – Economic Sentiment (Mar) 
12:30 – US Retail Sales (MoM)(Feb)