Equities are staying close to record highs with the S&P 500 looking to break past the 4200 levels next. In Europe, the Euro Stoxx 50 has also broken above the 4k level for the first time last week and China has gotten in on the rally too. US yields have traded in a more stable fashion - we saw the 10Y and 30Y break below their respective support levels for 1.6% and 2.3% but have since recovered.
The US dollar is continuing its slide in April (across both developed markets and EM) with the EUR breaking above the 1.20 level once again. Even Gold, which has stayed notably quiet and range bound over the last few weeks, has come to life and is threatening to break higher above the 1800 level.Crude oil has been very well supported with both geopolitics and higher demand estimates working in tandem to take WTI back to 63.5 levels now. With things moving smoothly, the OPEC+ is even considering scrapping its ministerial-level meeting this week and having only the monitoring committee meet instead. The plan to increase capacity by about 2 mn barrels per day between May and July this year remains on track for now.Corporate Earnings is back on the calendar with banks kicking off the new season on a very positive note. Despite some names affected by the Archegos deleveraging, there was significantly higher revenue and profits across both the trading and underwriting businesses. There has also been a strong drive to raise capital with JP Morgan raising 13 bn via debt last week and Morgan Stanley announcing a 7.5 bn issue this week. Even in Asia, where the recent Huarong uncertainty has dented sentiment, names like Tencent (USD 4 bn via debt) and Meituan (USD 10 bn via equity and convertible bonds) have been well received by the market.Ahead this week, we have interest rate decisions from China, Indonesia, Canada, the European Central Bank and Russia, with the status quo expected to hold across most of the countries. There are some PMI numbers out in the latter half of the week and we will see how the US corporate earnings and recent labor market momentum hold up through the next few days.
April 20, 2021
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