STOXX 600 closes at record high

TAKEAWAYS

•    Europe STOXX 600 index reaches a record high
•    CAC 40 index recovers entire pandemic-driven loss, nears record
•    Dollar turns mixed: GBP/USD closes lower while EUR/USD gains & USD/JPY dips
•    Gold rises for fourth day, tops $1740 per oz
•    Copper price surge leads to gain in mining stocks
•    Bitcoin still stumbling under $60,000
•    Mixed day in Asia with Nikkei falling while Hong Kong stocks popped
•    US bond yields dip as investors begin to doubt whether Biden infrastructure bill will pass
•    IMF raises 2021 growth estimate to 6% from 5.5% prior
•    DAY AHEAD: FOMC minutes, Services PMIs

BEST CHART
CAC40 – Daily Candlesticks

Source: GKFX / MT4 (April 7, 2021)

France’s CAC40 index has now retraced the entire pandemic decline and is testing is previous record high. The breakout is bullish while price remains above the breakout level around 6100.

GURU WISDOM

“Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.” – Larry Hite

MARKETS

*Daily closing price
↗ EUR/USD    1.1875        (+0.54%)
↘ GBP/USD    1.3824        (-0.53%)
↘ USD/JPY    109.74        (-0.39%)
↘ S&P 500    4073.94    (-0.10%)
↗ Hang Seng    28,938.74    (+1.97%)
↗ Gold        1743.86    (+0.90%)
↗ Oil (Brent)    62.64        (+0.79%)
↘ Bitcoin    57,875        (-2.15%)

NEWS

It was a landmark day for European stocks after the Europe STOXX 600 index recovered its pandemic-induced losses from March last year to reach a record high. The narrower Europe STOXX 50 index had already reached a new record two weeks ago. At the same time, France’s CAC 40 index recovered its losses from the onset of the pandemic. Stocks in Germany were first to do so earlier this year so the move is a catchup and shows the investment in global stock markets is becoming broader.

A drop in US Treasury yields weighed on the dollar, which fell against the euro and the yen while the pound bucked the trend. Gold continued to be a beneficiary of a weaker dollar, rising for a fourth day in the lead up to FOMC minutes released later today. Copper was the standout commodity gainer alongside other industrial metals on signs of supply constraint brought on by pandemic-related restrictions.

In today’s FOMC minutes, the market will be looking for any clues that the Federal Reserve is aiming to cap rising bond yields after steep gains this year. At the meeting itself the Fed had projected interest rates to remain near zero through 2023 via its dot plot. The minutes will add more colour to these forecasts and might show how close members are to bringing forward when they expect the next rate hike.

DAY AHEAD 
*Times in GMT
00:00 - IMF Meeting 
08:00 – Eurozone Markit PMI Composite (Mar) [52.5 Exp vs. 52.5 Prev]
08:30 – UK Markit Services PMI (Mar) [56.8 Exp vs. 56.8 Prev]
18:00 - FOMC Minutes

Source: TradingWriters.com