STATE OF THE MARKETS

Bonds sell-off sent equities lower. Global equities sunk further on Thursday as bond traders continue to sell US treasuries forcing yields to jumped and attracted safe-haven flows. The benchmark US 10Y hit as high as 1.569% and still continue rising as of this writing, when bonds prices fall without support. The higher yield attract risk averse investors to dump stocks and switch to safe-haven bonds which saw Dollar remained in demand.

Crude futures surged higher after OPEC decided to roll over its production cap into April, which saw the black gold settled for $63.83/bl as New York closed. Gold continued its downward trajectory after demand for Dollar forced the precious metal to settle lower around $1,696.80/oz.

Dollar remained in demand across the board and edged higher in the long term accounts. Among the Comdolls, Loonie benefitted from rising oil price and edged higher in demand while Aussie and Kiwi remained supported by the Swiss that had returned to the back seat. The safe-haven Yen had also retreated in the medium term, while Sterling remained bid over Euro. 

OUR PICK – No new pick.

No new pick going into weekend. Our FX risk sentiments suggested that recent equities sell-off is more of a profit taking from long term investors than major fresh selling from short-sellers. The fact that the new US $1.9 stimulus is still being held at bay is a good reason for the equities market to bounce back at some point in our opinion. Risk averse investors would then dump more shares and allocate more to bond to shield their portfolio if yields were attractive enough. We also see mid-risk investors would pick stocks that have strong dividend payout records in trying to beat rising bond yields.

Trade updates: We have closed KR around $33.90 to reduce exposure and see buying on pullback with $32.00 stop. TEVA was stopped-out. Gold did not rebound for a short as we had expected and long was stopped out. We have raised EUR/JPY SL to 128.70 as it’s rise to medium term TP2 but may close for weekend. Crude Oil short term buy reached all targets but medium term sell was stopped-out. MO remain active. Have a great weekend!

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.