Daily Alert – Friday 19th March 2021: US-China P*ssing Contest; EU Vaccine Omnishambles
The week ends with the US-China talks in Alaska getting off to a bad start with opening remarks from both sides degenerating into what in the world of negotiation is known as a p*ssing contest.
The week started quietly as it often does in the run up to a Fed Funds Rate announcement on Wednesday. The Fed was dovish and did not move the sentiment needle from the all-pervading indecision. On Thursday, equities and oil began to fall as the US 10Y yields continued to soar.
The ECB mentioned for the first time that their Covid stimulus could (read “WOULD”) prove to be insufficient. Meanwhile right now, EU politicians and regulators continued their vaccine roll-out omnishambles by mistaking below-background blood clot rates amongst the vaccinated with an actual problem. Many member states halted their roll out of the vaccine only for the European Medical Agency to say a few days later that all was well. It really is an endless clown show over there in the EU. A clown show where people will die unnecessarily.
The weekly charts show equities and oil down. GOLD is static. The JPY is having only its second up week of the year, driven by Thursday and today’s risk-off sentiment. The EUR drops over the week. I should have taken my own advice to trade it on the weekly chart – the daily has been choppy. The USD is up on the week as the GBP continues sideways.
There was no trade of the week that could be discerned by the mere human mind. I saw nothing all week and I think that was justified.
I did note an interesting report today on commentary from Goldman Sachs – “Goldman Sachs expects OPEC+ output to increase by 2.8mln bpd by August and sees Brent rising to USD 80/bbl in summer (currently USD 63.4/bbl), while it views the recent sell-off as a transient pullback in a large oil price rally and a buying opportunity.
There you have it. Oil is around 7.5% down on the week at the time of writing. This will reverse. My question is, do I enter now, or first thing on Sunday night?
What a week. I need a break. See you on Monday.
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