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Crypto markets traded moderately lighter, with the total market capitalization again retreating below two trillion dollars. Bitcoin prices were down by around three per cent on a weekly basis, while Ethereum at its current levels above $2k maintains a weekly gain of roughly five per cent. Despite the retracement, Ripple is still up by more than 60 per cent compared to the previous week as the value reached above one dollar for the first time in more than three years.
Sentiment in the stock markets remains quite mixed. While US indices like the US 500 continue to see upwards momentum and the China A50 strongly rebounded by Thursday, other indices like the Japan 225 or the Spain 35 are still trading in the red.
On Thursday the EU publishes its PPI for February and in the US the weekly Federal Reserve Bank statistics as well as weekly jobless claims will be released. Some analysts hope that new claims will fall again below the 700 thousand mark after reaching 719 thousand in the previous reporting week. Later in the Asian-Pacific trading session the Chinese CPI and PPI numbers for March and building approval data from Australia can be expected.
The intraday weakness of the dollar allowed the EUR/USD rate to recover at times to rates above 1.19 on Wednesday only for the EUR/USD pair to close almost unchanged at the end of the day around the 1.187 mark despite the euro gaining against most other majors like the pound sterling (GBP) or the Japanese yen (JPY).
The PMI composite for the euro zone was overall positive on Wednesday reaching a level of 53.2, while the services PMI also improved to 49.6, which indicates only slightly negative purchase managers’ expectations as numbers above 50 are to be counted as positive.
Meanwhile the US trade balance deficit widened further than expected in February, reaching $71.1 billion after $68.2 billion in the previous month.
Gold prices tested again the high from Tuesday by Thursday morning and since the low from last week gold is trading up by almost four per cent up. Silver prices also made further advances, while platinum and palladium prices remain subdued after the losses on Wednesday.
Declining yields on US Treasury Notes, such as the 10-year benchmark falling again below 1.7% could be seen as positive for the precious metal as in theory higher yields mean also higher opportunity costs of holding gold that does not yield any interest. Other factors potentially affecting gold prices could be the estimates of inflation. Recent minutes from the last FOMC meeting show that there are different opinions among the members of how inflation will play out, with some expecting that the inflation will again reduce more than expected.
As gold is predominantly traded in US dollar, fundamentals affecting the greenback, such as the scheduled speech by the chairman of the Fed or industrial production and retail sales data due next week can have an impact also on the price of such commodities.
Oil prices ended the day only marginally higher after rebounding from the intraday low. Prices were under pressure around the weekly data release by the Energy Information Administration (EIA). While crude oil inventories according to this data were down by 3.5 million barrels over the past reporting week, gasoline and distillate inventories increased more significantly with 4 million barrels and 1.5 million barrels respectively.
Some analysts see the push to return back to normal as a factor affecting demand for energy commodities. A metric sometimes used by analysts was the TSA checkpoint travel number statistic. Over the past weeks the number of travellers has been relatively steadily improving with as of the 06.04.2021 the seven days average reaching levels only 37 per cent below the same time in 2019, while only a month ago the number of travellers was down by more than 50 per cent compared to 2019.
The US 500 and US Tech 100 index made further advances higher on Wednesday with the US 500 reaching a new all-time high, while the US Tech 100 index was trading by Thursday morning less than two per cent away from its previous all-time high last reached in February. Other indices showed mixed results with the US 30 index almost unchanged still below the record high on Monday, while the small-caps index US 2000 trailed lower.
Stocks that sold off last week due to the forced liquidation of Archegos, whose margin call also caused sizable losses for some banks including Credit Suisse, continued to face pressure with ViacomCBS (-0.90%) and GSX Techedu (-5.47%).
Tesla (-2.78%) closed lower after reports of delayed deliveries of its pricier Model S and X vehicles which might be delayed by up to 14 weeks or until July respectively. Recent SEC filings on the number of delivered vehicles showed that the company managed to improve yet again its total quarterly deliveries but failed to produce a single Model S/X car in the quarter that could be counted in the statistic.
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