Original insights into market moving news

[PODCAST] European Open Rundown 21st April 2021

  • Asian equity markets mostly slumped as the negative mood rolled over from the US where major indices extended on declines
  • Underperformance in the US was seen in energy and financials amid lower oil prices and yields
  • The Japanese government is reportedly to declare an emergency in Tokyo, Osaka and Hyogo due to COVID-19
  • Netflix shares slumped around 10% after hours with subscriber additions significantly below forecasts
  • In FX, the DXY gained a firmer footing on a 91.00 handle, EUR/USD maintains 1.20 status and GBP/USD sits south of 1.40
  • Looking ahead, highlights include UK & Canadian inflation, BoC rate decision, DoEs, BoE's Ramsden, Bailey, supply from the UK, Germany & the US


US CDC reported total COVID-19 cases rose to 31.54mln from 31.48mln the day before and deaths rose by 456 to a total 564,813. (Newswires)

The US Gov’t could use its leverage over a key NIH patent use to stabilise vaccine spike proteins to encourage companies to share their knowledge and increase global COVID-19 vaccine access, according to NIH’s Graham; additionally, research indicates that if the US Gov’t were to sue Moderna (MRNA), as they have not licensed the patent, they could owe USD 1bln for just sales to end-2021. (FT)

EMA expects to provide an update on the AstraZeneca (AZN LN) vaccine later this week. In other news, Johnson & Johnson’s (JNJ) COVID-19 vaccine rollout is to resume in Europe following the recent EMA review, while Italy’s Health Ministry recommended the Johnson & Johnson vaccine to be used for people aged 60 and above. (Newswires)

Dutch PM Rutte said the coronavirus lockdown can be eased slightly and that the night-time curfew will be lifted on April 28th, with outdoor bar and restaurant service to be allowed from April 28th. (Newswires)

Japan's government is to declare an emergency in Tokyo, Osaka and Hyogo due to COVID-19 in which a formal decision could be made as soon as this week, while other reports noted that Tokyo is seeking to declare a state of emergency between April 29th - May 9th and will request department stores close during the state or emergency. (Sankei/Mainichi)


Asian equity markets mostly slumped as the negative mood rolled over from the US where the major indices extended on declines led by underperformance in energy and financials amid lower oil prices and yields. In addition, earnings releases did little to spur risk appetite and Netflix shares slumped around 10% after hours despite beating on top and bottom lines, as its subscriber additions were significantly below forecasts and Q2 estimates also underwhelmed. ASX 200 (-0.7%) was negative with the energy sector the worst hit following the recent retreat in oil prices and as participants digested the latest quarterly updates including from BHP which reported a decline in iron ore output and lower than expected shipments. Nikkei 225 (-1.9%) was heavily pressured by a firmer currency and with the government reportedly to declare an emergency in Tokyo, Osaka and Hyogo due to COVID-19 whereby a formal decision could be made as soon as this week. Hang Seng (-1.7%) and Shanghai Comp. (+0.2%) conformed to the lacklustre mood amid concerns of a regulatory crackdown after MIIT noted that China is to strengthen its inspections of internet companies and although mainland bourses eventually showed resilience, the Hong Kong benchmark languished near its lows after having gapped below the 29k level amid notable losses in the oil majors and with Anta Sports the worst hit among the blue chips after reports its controlling shareholder will offload 88mln shares. Finally, 10yr JGBs were higher following the recent gains in T-notes and as the broad risk aversion spurred a flight to safety, with prices helped by the BoJ’s presence in the market for JPY 955bln of JGBs in mostly 1yr-3yr and 5yr-10yr maturities, while the central bank also offered to buy JPY 75bln in corporate bonds with 3yr-5yr maturities from April 26th.

PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.20% for a net neutral daily position. (Newswires) PBoC set USD/CNY mid-point at 6.5046 vs exp. 6.5039 (prev. 6.5103)

Chinese President Xi will attend the April 22nd climate summit at the invitation of US President Biden, with President Xi to attend through video and will also deliver a speech. (Xinhua)

China and the US are getting close to naming new envoys to both their capitals as the two world powers get locked into an increasingly heated competition for global leadership, according to WSJ. Furthermore, reports added that Beijing plans to appoint diplomat Qin Gang, who has acted as President Xi Jinping’s chief protocol officer, as the next ambassador to Washington, while Washington is widely expected to name R. Nicholas Burns, a veteran diplomat who has served in both Democratic and Republican administrations, as its ambassador to Beijing. (WSJ)

South Korea April 1st-20th Exports rose 45.4% Y/Y, Imports rose 31.3% Y/Y and Trade Balance at provisional deficit of USD 2.03bln. (Newswires)


UK government is planning new cyber security laws to protect smart devices and their users from cyberattacks. (Newswires)

Germany's Green party surged in a new poll by Forsa to overtake German Chancellor Merkel's CDU with support for the Greens at 28% vs. 21% support for the CDU/CSU and 13% for SPD. (Newswires)


In FX markets, the DXY consolidated after having recouped the lost ground from its brief foray beneath the 91.00 level with the currency gradually finding some consolation from the widespread negative risk tone. Aside from the weakness in stocks, there was little else in terms of pertinent drivers for the greenback amid a lack of data and with the Fed currently in the blackout period, although there were some remarks from Fed Chair Powell dated earlier in the month from a letter to Senator Scott that stated the Fed is buying bonds at a pace unrelated to the magnitude of fiscal deficits and he also reaffirmed expectations of transitory inflation. EUR/USD languished near the prior session’s lows with a recent bout of pressure in the single currency alongside a survey which showed the German Green Party overtook Chancellor Merkel's CDU, while GBP/USD was also lacklustre after yesterday’s one-way retreat from the 1.4000 territory despite the better-than-expected jobs and wages data. USD/JPY tested the 108.00 level again and JPY-crosses were hampered by the widespread risk aversion, which also kept antipodeans subdued due to their high-beta statuses and effectively nullified the firmer than expected Australian Retail Sales and New Zealand CPI data.

  • Australian Retail Sales (Mar P) M/M 1.4% vs. Exp. 1.0% (Prev. -0.8%)
  • New Zealand CPI (Q1) Q/Q 0.8% vs. Exp. 0.7% (Prev. 0.5%)
  • New Zealand CPI (Q1) Y/Y 1.5% vs. Exp. 1.4% (Prev. 1.4%)
  • New Zealand RBNZ Sectoral Factor Model Inflation (Q1) 1.9% (Prev. 1.8%)


Commodities were mixed with underperformance in WTI crude futures after the prior day's selling amid several bearish factors including the widespread negative risk tone and increased optimism of a return to the Iranian nuclear deal after Iranian President Rouhani said the talks in Vienna have progressed by about 60%-70% and that if Americans act within the framework of honesty, we will achieve results in a short time, while the product components of the latest private sector inventory report were mixed although headline crude stockpiles printed at a surprise build. Gold prices were steady overnight as the greenback consolidated and copper attempted to nurse some losses as markets in mainland China showed some resilience but with the recovery restricted by the broader losses across the Asia-Pac region.

US Private Inventory Data (w/e April 16th): Crude +0.4mln (exp. -3.0mln), Cushing -1.3mln, Gasoline -1.6mln (exp. +0.5mln), Distillate +0.7mln (exp. -1.0mln). (Newswires)


US State Department spokesman stated Iran talks in Vienna have been positive but there is still a long road ahead. The State Department also commented that they are definitely looking at and will not hesitate to use further policy tools linked to Kremlin critic Navalny going forward and that US Ambassador Sullivan has not been expelled nor ordered out of Russia. (Newswires)

Ukraine President Zelenskiy said he is ready to meet Russian President Putin in Eastern Ukraine and Russia was said to have refused to reconfirm resumption of ceasefire in Donbass. (Newswires)

Saudi Arabia reiterated its call for Iran to engage in ongoing negotiations, avoid escalation and not expose the region to more tension, according to a tweet by the state news agency. (Newswires/Twitter)


The TPLEX was well bid into the US session as the belly led the gains amid the broader risk asset pressure in another data-lite session. By settlement, 2s -0.8bps at 0.152%, 5s -3.2bps at 0.797%, 10s -3.7bps at 1.562%, 20s -2.9bps at 2.150%, 30s -3.3bps at 2.260%; TYM1 were average. TIPS little changed, seeing the BEI curve narrow and invert further. Fed bought USD 1.732bln 20-30yr Treasuries, O/C 2.77x (prev. 1.95x). US sold USD 38bln of 1-year bills at a record low yield of 6.5bps, covered 3.69x; USD 40bln of 42-day CMBs at a high rate of 1bps, covered 3.56x. SOFR unch. at 0.01%. NY Fed RRP demand at new MTD high of USD 67.747bln across 28 bidders (prev. USD 53.8bln across 23 bidders). Bonds were on the defensive in APAC trade, accentuated by Aussie bond yields surging and a big blocked steepener trade in USTs (+TYM1 and -USM1). Strength in bonds built out of Europe however, although as US players arrived, one desk noted hedge funds were better sellers, with additional rate-lock related selling amid another bubbling corporate/SSA issuance pipeline. But those selling pressures didn't last too long. A further rout in stocks saw UST shorts covered, and turned the tide bullish. The Fed stepping in the long-end helped today too, although on a separate note, it was quite interesting that 60% of the purchases were in the 30yr bucket given that the Fed has been recently concentrating the purchases in the 20yr area lately given that part of the curve's relative weakness. Later trade saw yields hug the lows. T-notes (M1) futures settled 10+ ticks higher at 132-18.

Fed Chair Powell stated in remarks dated April 8th from a letter to Senator Rick Scott, that the Fed is buying bonds at a pace unrelated to the magnitude of fiscal deficits and that low Treasury yields attest to strong global demand for safe and liquid assets. Furthermore, Powell reiterated the Fed does not seek inflation that substantially exceeds 2% or sits above 2% inflation for a prolonged period, while he also reaffirmed expectations of transitory inflation. (Newswires)

US GOP Senators reportedly floated a USD 600bln-800bln counteroffer for President Biden's infrastructure plan. Other reports also noted that a group of GOP Senators are looking at an infrastructure proposal valued around USD 600bln, according to Senators Capito and Wicker, who are working on the plan and could release a draft within days although they don’t expect all GOPs to get behind it. (Newswires/Twitter/CNN)

US Deputy Secretary of the Treasury Adeyemo met with bank CEOs and discussed a review of economic and financial sanctions, according to a statement. (Newswires)

Apple's Spring Loaded Event introduced the Apple Card Family in which the Apple Card will allow spouses and partners to share their credit lines, while it also introduced Apple Podcast subscriptions and introduction channels. Apple unveiled a purple iPhone 12 and iPhone 12 Mini which will be available for pre-order from April 23rd with availability from April 30th and it introduced a next-gen Apple TV 4K that is now built with A12 bionic. In addition, the Co. unveiled tracking tags to find lost items, a Mac built from Ground 1 with the M1 chip and stated the M1 chip is now in the iPad Pro, as well as added 5G and a 2TB version of the iPad Pro. (Newswires)