STATE OF THE MARKETS
Vaccine hopes return to the driver seat. Major indices rebounded on Thursday but on a downward trend with lower highs for the past 4 days, signaling consolidation and profit taking as holidays approach in the next few weeks. US treasuries continue to be bid on safety demands with the 10Y benchmark continue to edge lower and closed below the 0.85% mark.
In a mixed reaction, crude oil futures struggled higher above $42/barrel in early Friday trading, on the hope of vaccine deliveries before Christmas. On another note, Treasury Secretary Steve Mnuchin dropped a bombshell contradicting Feds Jerome Powell that emergency funding will end by Dec 31. Gold continue to edge lower below $1,880/oz but remains well bid above $1,850.
In the FX space, long-term accounts remain unchanged while medium-term adopted more optimism as Kiwi and Sterling passed Yen on demand. Profit taking on the short-term accounts pushed Aussie and Kiwi to the sell side while Euro and Swiss took the driver seat.
G8 CURRENCIES SENTIMENTS
** ST refers to Short-Term which is daily turnover, MT is Medium Term which is
weekly and LT refers to Long-Term which is monthly turnover.
WALL ST MOST ACTIVE
|VOLUME||90 DAYS AVG|
** % Change here refer to price vs previous day price
WALL ST TOP FLOWS
|% CHANGE||FUNDS FLOW $|
** % change here refers to volume vs. 20 days average volume.
TOP 5 BLOCK ORDERS
|CL||41.50 – 41.83||crude oil futures||680||28.3M|
|ZB||173.02 – 174.07||US bond futures||8,990||155,738.3M|
OUR PICK – NZD/CAD
Hope lift kiwi while fear suppress loonie. Market is at a juncture of hope in a tug of war between fear and greed. Vaccine hopes continue to lift kiwi more than it lift loonie as the currency is affected by oil demand that is seen weak during lockdowns. However, kiwi that is affected by milk prices would continue to be in demand regardless. In such a state, we see higher NZD/CAD in the coming weeks. Buy on dip is our preferred strategy while 50% retracement of 2016 high to 2020 low (0.8970) remains pivot, targeting 0.92 and 0.9280 in extension. The pair has not make any pullback this week, so below 0.8970 look for a retest of the 0.8880 area.
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