Treasuries have worst quarter in 40 years!

TAKEAWAYS

•    US Treasury bonds total return this quarter -4%, the lowest since 1980
•    Gold jumps back over $1700 but has worst quarter since Q4 2016
•    Bitcoin rose 100% in Q1, Ethereum rose 150% for best quarter ever
•    S&P 500 has best month since November, closes 4th quarter in a row higher
•    Oil surged 25% in first quarter, energy stocks amid biggest risers, up 30% in Q1
•    Biden’s White House proposes $2.2 trillion spending over 10 years, 
•    Biden proposes raising corporation tax from 21% to 28% as expected
•    President Macron puts France in 4-week lockdown
•    DAY AHEAD: OPEC+ Meeting

BEST CHART
XAU/USD – H4 Candlesticks

Source: GKFX / MT4 (March 31, 2021)

XAU/USD rallied strongly off the lows reached in March, lifting back over the key $1700 threshold. It is still early but it could be the beginnings of a double bottom pattern.

GURU WISDOM

“What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.” – William O’Neil

MARKETS

*Daily closing price
↗ EUR/USD    1.1729        (+0.12%)
↗ GBP/USD    1.3787        (+0.35%)
↗ USD/JPY    110.74        (+0.36%)
↗ S&P 500    3972.89    (+0.36%)
↘ Hang Seng    28,366.0    (-0.72%)
↗ Gold        1707.99    (+1.35%)
↘ Oil (Brent)    62.86        (-2.03%)
↗ Bitcoin    59,070        (-0.39%)

NEWS

The US dollar was mixed on the final day of the quarter after ADP employment data slightly missed expectations, denting hopes for a blowout 1 million jobs NFP on Friday that some had been speculating on. EUR/USD brushed off news that France will re-enter lockdown for another 4 weeks.

The prospect of more government debt and the low interest rates needed to sustain it lifted the price of gold, as did a softer dollar. Still, it has been the worst quarter for gold since Q4 2016 as investors dropped havens and bet on higher interest rates. The same bet on inflation and less central bank stimulus saw bonds get slammed this quarter with Treasuries total return (capital gain + coupon) the lowest since 1980.

Oil prices swung lower the day before the OPEC+ meeting today, capping a massive quarterly gain of +25%. It is widely expected that OPEC will maintain its large output cuts amid uncertainty over the oil demand recovery caused by another wave of virus cases and new lockdowns in Europe.

 
The focus on economic growth and government stimulus lifted stock markets on Wednesday, while falling bond yields help tech stocks higher. Tech has underperformed since mid-February but as a sector still rose 2% in Q1 after being down 9% at one point. So far, stocks have seen a muted reaction to the prospect of higher corporation taxes in the US under Biden.

DAY AHEAD 

*Times in GMT
00:30 – Australia Retail Sales s.a. (MoM)(Feb) [-1.1 % Exp vs. -1.1 % Prev]     
01:45 – China Caixin Manufacturing PMI(Mar) [51.3 Exp vs. 50.9 Prev]
06:00 – Germany Retail Sales (YoY)(Feb) [-6.3 % Exp vs. -8.7 % Prev]
10:00 - OPEC Meeting 
14:00 – US ISM Manufacturing PMI(Mar) [61.3 Exp vs. 60.8 Prev]

Source: TradingWriters.com