Video Analysis
Stock Indices rising, dollar falling, risk is on!
In Retrospect

Stock Indices rising, dollar falling, risk is on!

by Ricardo Evangelista - 16 Apr 2021

American retail sales for March came up above expectations, showing the fastest growth of the last 10 months, while new fillings for unemployment benefits fell by almost 200,000 comparatively to the previous week. The impact of these positive figures reverberated across stock markets, with global equities hitting fresh highs maximums as investors moved to price-in the vitality of the US economic recovery. The US dollar also reacted positively to the data; however, the gains were limited.

After a period when inflation fears drove a bond sell-off and a stronger greenback, investors are now taking more seriously the Fed’s commitment to keep its current dovish stance; a change of perspective that limits the scope for further gains for the American currency. On Wednesday, a leading cryptocurrency exchange went public via a direct stock listing.

The offering was considered a success, with investors valuing the firm at 65.4 billion dollars by the end of the first day of trading, very close to the value of the parent company of the Main American Stock Exchange. Meanwhile, Russian assets have been felling the impact of the latest round of US sanctions. The news triggered a selloff in Russian assets, with the Rouble dropping 2.2 per cent to the dollar during early Thursday trading, while bond prices also dropped which caused a rise in yields, while the Moex, Moscow’s benchmark stock index was down by 0.6 per cent. Looking ahead to the next 7 days: on Tuesday we have the interest rate decision of the PBC in China.

On Wednesday we will keep an eye on the UK’s inflation data, while on Thursday the ECB will issue its rates decisions and policy statements – no major surprises are expected but it’s always interesting to look for clues by reading in between the lines. Finally, also in Europe, we’ll have the release of EU PMI data on Friday, which could have some impact on the euro.

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